Millennials and crowdfunding: Analyzing The Giving Patterns of Newer Generation
By: Jasmine Marfatia
Published On: August 14, 2018
Newer generations are deeply involved in charitable work, but their patterns of donation differ. In this article we explore the relationship between millennials and crowdfunding, and how they use technology to make an impact.
Millennials are broadly defined as the generation born between the early 80s, through the late 90s. In the past, the millennials, or Gen Y, have been accused of being the generation that ‘kills’. They’ve been accused of killing concepts like the 9 to 5 work day, the concept of income saving, marriage, and even philanthropy, among others.
But the truth is that millennials in fact, are greatly inclined towards charity and philanthropy, and there have been sufficient statistics that have revealed their charitable giving patterns. A Millennial Impact report suggested that 84% millennials made charitable donations in 2014.
What nonprofits need to understand about this generation is that they when they contribute to society, they do it a little differently. Surely that is understandable, given the era of connectivity we live in. A one off donation to a long standing NGO won’t cut it anymore. They need involvement and participation.
This era responds more to marathons for a cause and ice-bucket challenges. The digital revolution has encouraged and opened the world of online fundraising, which is why there is a connection between millennials and crowdfunding platforms, for it is the preferred pattern of new age activism.
Born at a time when the world is exploding with technologically innovations, this new generation has a different relationship with the philanthropic world. We make it simpler for you to get a glimpse into their ‘secret’ traits and how can these be leveraged to benefit your crowdfunding efforts. As a nonprofit, you need to understand their psyche in order to involve them in your fundraiser. So here are a few observations on millennials’ donating habits:
Millennials and crowdfunding: They have less disposable income, but they have numbers
One of the most pressing issues that millennials deal with today is the rate of unemployment. As a result of the state of unemployment, fewer people of this generations are able to save money, and hence have lower disposable income at hand. Doling out fat checks to large NGOs, then becomes a near impossibility.
This is why, millennials tend to donate smaller sums of money to multiple causes.
Back in the day, people relied on large contributions from sustainable investors or donors. Things have changed now, and while it may be difficult to keep a single donor engaged in a cause for a long time, it is much easier to rely on your ability to communicate your initiative to a large number of people.
So what motivates a youngster to donate to a cause even if he/she has nothing to do with it? Take the example of the ALS ice bucket challenge.
Even though most people weren’t aware of the disease this challenge was supporting, the sheer number that was turned into its virality made it a larger-than-life success. Moreover, nobody was asked to donate preposterous amounts of money, but rather just a small contribution. What they were instead asked to do was share the challenge with others, so that more people would be involved, and thus harnessing the power of numbers. This is the same concept that has made crowdfunding incredibly popular today, hence fostering a relationship between millennials and crowdfunding platforms.
Millennials and charity: They give, but they give differently
Whether you’re raising funds for a social cause or for a new start-up, what you need to understand is the behavioural traits of the generation. Millennials are considered impulsive in nature; impulsive with decisions related to spending or with establishing a connection. If they like something, they will get it, because they have a strong sense of individuality. They are social and connected, but at the same time individualistic.
The same impulsive behaviour of purchasing can be applied to their approach for giving. This behaviour has been further encouraged by online payments, or in this case, online donations. This report suggests that overall giving increased by a mere 1% in 2016, but online giving increased by 7.2% in the same year.
Additionally, the 2013 Millennial Impact Report suggested that 52% of the generation would be interested in a monthly donations pattern.
Image credit: Millennial Impact
This is partly because of lower amount of financial savings. This can give nonprofits an upper hand in ensuring financial stability, by gaining recurring donations from this generation. In the past, nonprofits have always struggled with getting recurring donations. It’s important to note that recurring donations wouldn’t be this easy a feat, had it not been for direct online payments, another important element in establishing a relationship between millennials and fundraising.
Tap into their power of tech
Giving back to the community is no more limited to just financial donations and volunteering programs. Gen Y has grown up with mobile phones and laptops, and they spend several hours each day on social networking sites. Even if they are unable to make a monetary contribution, the mere reach of an influential person on social media can mean so much for your initiative. A simple tweet or a shoutout can bring great traction to a cause or initiative.
It is a missed opportunity to underutilize their power of communication. In order to tap into the power of new- age communication, nonprofits must surely have an online presence in the form of a website, email IDs, and social media handles, but most importantly, a portal to make quick and convenient online donations. This is where millennials and crowdfunding come together once again.
Crowdfunding platforms do all the work- they conduct a due diligence process before running a campaign on their platform, and offer a safe payment gateway for the contributions to come in. The sheer convenience of the process of giving through crowdfunding platforms that do all the work for you is highly incentivizing to millennials.
Skilled volunteering: Gen Y’s broadened definition of philanthropy
Charity doesn’t necessarily have to mean giving money. Nonprofits need to find other ways to involve millennials in their social initiatives. Give them a chance to be hands on with your cause, and apply their skills and expertise in furthering your initiative. For example, a volunteer who specializes in social media communications, can take charge of managing social media accounts for a nonprofit. Skilled volunteership such as this is as beneficial as a donations. There are innumerable ways that millennials can contribute to society without shelling out money if it is beyond their means. Here are a few ideas:
Helping nonprofits spread awareness about their causes
Helping an individual or organization design a crowdfunding campaign
Offering legal assistance
Content writing and editing
Setting up websites
Signing online petitions to fight for a cause
Blogging, video testimonials, and podcasts
Corporate giving influence
Millennial employees are highly influenced by the giving patterns of their peers and coworkers. According to a 2015 Millennial Impact report, 46% would be more likely to do charity if a co-worker was also involved in it, and 27% would do it if a senior in the organization suggested it. In fact, 11% have opted to have donations cut from their paychecks itself. And 30% have been seen to donate on online platforms such as Impact Guru.
In the landscape of philanthropy, millennials have brought both, opportunities and challenges. Charities today should take efforts to tap into their habit of giving by effectively engaging them as they are the future of philanthropy. Hopefully, these observations will give you deeper insight into how they prefer to contribute to society.
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