Millennial donors are becoming a powerful force in charitable giving. And those aged 32 to 40 (the "Oregon Trail" Millennials) are about to become your top major gift prospects.
While Baby Boomers and Gen X may give more in terms of dollars, 84% of Millennials give to charity, donating an average of $481 across 3.3 organizations each year. Considering that this generation is poised to inherit trillions in wealth, these numbers are significant. Gifts will likely continue to grow as these donors earn more over their lifetime, grow investments, and inherit their parents’ wealth. They’re also much less likely to marry or have children, making them ideal prospects for major gifts.
It’s critical to focus on Millennial giving as this generation grows in giving capacity. If you begin cultivating these prospects now, you’ll bring in more major gifts for years to come.
- 3 key insights about Millennial donors
- How to identify Millennial major donor prospects
- How to cultivate your first major gift from a Millennial donor
- Making the ask: How to solicit a major gift
- Millennial donor stewardship strategies
3 key insights about Millennial donors and Millennial giving
1. Millennials are about to become your wealthiest donors.
Over the next 25 years, Millennials will inherit about $68 trillion from the Baby Boomer generation. Dubbed the Great Wealth Transfer, it will be the largest of wealth transfer ever seen in history. And by 2030, Millennials will hold five times as much wealth as they hold today.
Additionally, the tech boom has created almost 650,000 Millennial millionaires, who are more charitable than millionaires in other generations — 56% give to charity, compared to 51% of older millionaires.
2. Millennials are investing in stocks more than ever before.
In 2020, Millennials accounted for nearly 20% of the stock market’s trades, up almost 5% from 2019. And investing apps saw record highs — Robinhood reported that daily trades were up 300%.
This is a huge opportunity for fundraisers as stocks are usually major gifts. By avoiding capital gains and state income taxes, donors can give more than they would by selling the stock and donating the cash.
Additionally, as part of the Great Wealth Transfer, many Millennials will inherit stock. This is significant, because when someone inherits stock, the cost basis (or value of the shares) becomes the value on the date the former owner died, instead of the value when originally purchased. Considering the S&P 500 has doubled since 2016 (and is a good gauge of overall stock market performance), it’s safe to assume that when an asset is passed on to a Millennial donor, its value will likely be more than what it was when the original owner acquired it.
3. High-earning Millennial donors are rapidly growing in giving capacity.
Incomes are rising quickly for Millennials working in competitive fields like tech, law, and consulting. These industries operate on a “tournament model,” which means there are less available positions with each promotion. This fosters competition and productivity, as each promotion typically comes with a huge pay increase.
So a $10,000 gift from a Millennial donor is much more valuable than a $10,000 gift from a Boomer, because they’ll be able to donate even more in the future. You want to build relationships with these major gift prospects now to inspire a habit of giving throughout their lifetimes.
How to identify your Millennial major donor prospects
When identifying potential Millennial major donors, first get clear on what amount would be a major gift to your organization, and which traits to look for.
Though wealthy Millennials will have many of the same characteristics as other major gift prospects, there are some differences to keep in mind. The following markers will clue you in to who has giving potential now, or likely will in the future:
- Job title: If a prospect works in tech, big law, consulting, or banking, they will likely have a higher salary. And their income will grow as they progress through different promotions.
Pro tip: Use LinkedIn to look up past donors and find out their job history or current title. On Glassdoor, you can also look up salaries for a specific position. Make sure to look at positions higher up as well to understand what these potential donors may be earning in a few years.
- Stock ownership: While assets owned by Millennial donors may not be worth much now, they will likely go up in value over time.
Pro tip: Use SEC.gov to uncover records of corporate filings, which can indicate if a prospect receives shares as part of their compensation. You can also use AssetDash to research which companies are publicly traded on the stock market. It's much easier to donate public shares versus those held in private companies. Another great resource is the TermSheet newsletter. It lists recent IPOs, or initial public offerings, of various startups. If a company has an IPO, they may soon be publicly traded.
- Geographic location: If a prospect resides in a city, it can show wealth and capacity to give because that’s where the majority of high-paying jobs are located. California is home to 44% of the nation's Millennial millionaires.
- Past giving: If a Millennial donor has given a large amount to your organization before, whether through a single donation or cumulatively, mark them down as a major gift prospect. If you cultivate them now, it can lead to larger gifts in the future.
- Political giving: The primary reason Millennial donors give to a nonprofit is because they want to have an impact. Charitable giving ties into their identity and their values. If you discover they’ve donated to a political campaign, this proves that they care about putting money behind their beliefs.
Pro tip: Campaigns are required to make their donations public. You can use FEC.gov to find out if a prospect has given to a political candidate.
How to cultivate your first major gift from a Millennial donor
Before you can make an ask and secure a major gift, you have to cultivate a relationship with your Millennial donor prospects. Donor cultivation refers to the process leading up to asking for a gift. Making the ask itself is solicitation.
If you’ve worked in major giving for a while, you know that cultivating a major gift can take anywhere from four to six meetings over six to 12 months, depending on the size of your organization and your relationship with the potential donor.
For Millennials, the major gift cultivation process is not much different from the practices you’d use with other prospects.
As always, you’ll need to:
- Introduce them to your organization,
- Set up in-person meetings,
- Invite them to volunteer or advocate for your mission;
- And get to know more about their interests.
But these practices need some fine-tuning to appeal to the habits of Millennial donors. Here are three strategies for success:
1. Send outreach that potential Millennial donors will open and read — like text messages.
Text messages have a nearly 100% open rate among Millennials. And click-through rates are double that of email, meaning this is by far the best way to reach and engage with these prospects.
If you’re worried that text messaging is too unprofessional — don’t be. Most Millennials won’t answer calls out of the blue, especially from unfamiliar numbers. And one-to-one texts are more personal than other forms of outreach, which is especially important when it comes to larger gifts.
All that said, you don’t want to start with major gift fundraising asks over text. You first need to build a relationship and understand what interests them most about your organization.
Start by sending impact updates, petitions, or advocacy initiatives. You can even send photos of different programs or events. As you learn more about how they engage, it will set you up for success when you eventually make appeals.
Pro tip: To avoid giving out your personal number, set up a free Google voice number to text prospects.
2. Invite Millennials to volunteer or advocate for your mission with their friends or colleagues.
Volunteering is incredibly important to your younger supporters. One in three Millennial donors said they give more to the nonprofit they volunteer with than they would if they didn’t volunteer.
Additionally, Millennial giving is heavily influenced by a prospect’s peers or workplace. 50% of Millennials have volunteered their time for a company-sponsored initiative. And 65% were more likely to volunteer if their co-workers participated.
Reach out to the companies your supporters work for and offer to host a "volunteer day" for their employees. Or invite them to be part of a skill-based program where they’ll have direct contact with those you serve, like mentorship or tutoring. This can be an opportunity for them to meet other volunteers who have similar interests. And you'll engage existing prospects while attracting new ones.
3. Host group events that focus on social connection and experiences.
A big part of major gift cultivation is hosting small, exclusive events for prospects, whether virtually or in-person. Your Millennial prospects tend to especially seek out and value experiences, and they crave social connection.
Rather than worrying about the size or exclusivity of an event, focus on creating events that are memorable and allow prospects to connect with other supporters. This also raises your visibility as Millennials are likely to share innovative experiences on social media.
Don’t know where to start? Here are some creative events other nonprofits have hosted for their younger donors:
- Northwestern University Dance Marathon: Northwestern hosts a 36-hour dance marathon each year. And it's wildly successful — they raise more than $1 million. Plus, donors can sign up in groups to raise even more money. Though you may not have the ability to host a 36-hour event, you can host a shorter marathon (or a virtual one). Encourage your Millennial donors and prospects to sign up as teams, or match each other’s contributions.
- The Birthday Party Project’s Costume Gala: Galas are the most common way to cultivate major gift prospects. But they can feel too stuffy and formal for Millennials. BPP turned their annual gala into a themed costume party to cater to their young base. They lowered the price of admission, and swapped a formal dinner for a casual cocktail party. They provided a true “experience,” by including games and a costume contest.
Even if you don’t have a large budget for an event, you can still create memorable experiences for your Millennial donors or prospects. Budget-friendly ideas include trivia nights, tours, or Q&As with your executive team. Plus, many nonprofits have learned over the past year that they can save money by hosting virtual events instead of in-person ones, and still be just as effective.
Making the ask: How to solicit a major gift
After a long cultivation process, you’re finally ready to make your ask. Even though you’ve built a solid foundation, it’s important to have a plan so that you can enter the conversation confidently.
As with any major gift solicitation, there are a few best practices to keep in mind:
- Map out an outline of the conversation before you go in, but leave room for open dialogue.
- Have a specific number in mind and make a tangible ask.
- Use social proof, which is the idea that donors are more likely to act in ways similar to their peers. These prospects are more likely to give to organizations if others like them are doing the same. Say things like: “Many supporters like you have been donating stock — would you like to learn more about that?”
- Bring up your prospect’s interests, or any initiatives they might be particularly interested in supporting.
- Listen more than you pitch — make sure your attention is on your donor and their needs.
Additionally, here are four strategies specific to Millennial donors and their giving habits:
1. In one-on-one conversations, lead with impact to inspire Millennial donors to give non-cash assets.
Millennials want to make a bigger impact at the organizations they care about. And many have appreciated assets, but don’t know they can donate them. When making your ask, mention how they could make a bigger difference at your nonprofit with non-cash gifts.
For example, let’s say you’re a major gift officer at a food pantry. You have been cultivating a Millennial prospect who owns $100,000 in stocks, and regularly volunteers at the pantry.
To effectively solicit a stock gift, you’ll want to include an action-oriented example of the impact their donation could make, by explaining exactly what their gift would fund.
You can say: “I know you've been heavily involved in the food pantry, and thought you might be interested in learning how you can support our efforts to build a new one in a much-needed area. Many supporters like you have given stock to make a bigger impact than they ever thought possible. Your investment will support 100% of the development, the first six months of food provisions, and delivery costs. Would you consider a $7,000 stock gift to support this project?”
Though this example focuses on stocks, they’re not the only asset growing in popularity for Millennial donors. The amount of Millennials opening Donor Advised Funds (or DAFs) has doubled since 2014. If they have a DAF, you can use the same language to ask prospects to grant funds to your organization.
2. Have a lower donation amount for giving circles and naming opportunities for Millennial donors under 45.
By lowering the gift amount needed to enter giving circles, you can encourage younger supporters to give, and help them feel connected to your mission.
For example, let’s say that to get into “The President's Circle” at your organization, a donor has to give $10,000 a year. Lower the amount for donors under 45 to something more manageable, such as$3,000 to $5,000. This will encourage them to give again by ensuring they’re constantly engaged with your organization with access to exclusive events or other stewardship outreach.
And since Millennials are much more likely to give if their peers are, another option is to invite them to endow a chair, create a scholarship, or sponsor a park bench with their friends. This lowers the individual donation amount to something more manageable, and can turn regular donors into major givers.
3. Make it easy to give stock gifts on your website.
Through our work with nonprofits who use our Stock Tool, we’ve found that 80% of stock gifts come directly through a website link rather than a link off an email.
And stock gifts are key to major gift fundraising — organizations who focus on them grow six times faster than those who don’t. If you don’t make the process accessible and easy to understand for your Millennial donor prospects, you’ll lose the gift.
To be most effective, provide options on your donation page where donors are already planning to give.
The Southern Poverty Law Center does this really well. On their donation page, they list various giving vehicles before donors even select the amount they’d like to give.
From there, they link out to separate web pages that provide more information different vehicles, like this one about stock gifts:
4. Have a plan in place to follow up with your Millennial major donor prospects.
Depending on your donor’s response, you may need to confirm a donation, send a gift agreement, or send more information about a giving vehicle. Be sure you have reliable contact information.
If you need help drafting these, we have a sample gift agreement in our follow-up email templates.
If your organization uses a tool, you’ll also want to link to it in your follow-up. If you accept stock gifts manually, you should include a link to a web page or attach instructions on how to make a gift in your email.
Millennial donor stewardship strategies
Donor stewardship is about building a long, thoughtful, and engaged relationship with your donors so they give again. For Millennials, this step is especially important — feeling like their gift “didn’t matter” is the number one reason these supporters stop giving to nonprofits where they’ve previously donated.
For your Millennial major donors, make sure you follow three key steps:
- Once your donor has made a major gift, immediately thank and acknowledge their gift and its impact.
2. Give your donor some sort of public or private recognition. Based on their donation amount, your organization may place these donors in a certain tier. Remember, even if their gift is on the lower end of your major gift threshold, this generation is more likely to make major gifts in the future. Make sure there is something in your lower tier recognition levels in order to keep these donors engaged.
3. Make your interactions super personal. Knowing what drives a specific donor can help you cultivate more gifts in the future. Things to keep in mind include:
- Events attended
- Volunteer activities
- Communication preferences
- Social media engagement
- Inbound interactions — calls, texts, or emails sent by the donor
- Type of gift made — you can even follow up around the same time each year to see if they’d like to continue their impact
Another effective stewardship tactic for Millennial major giving is a “thinking of you” message. You can send a quick note over email or text, and note something specific this person helped to fund, or share something you saw “in the moment” or in action. And keep it short so it feels spontaneous.
For example, you might write:
“Sean — I walked by Sam on campus today, and she was explaining a geometry concept to another student (and I think doing a pretty good job!). I know you know that the scholarship you, Sarah, & Will funded is making a big difference to Sam, but I thought you’d like to know that it seems to be helping the other kids, too! Have a great day!”
If it’s not a text message, make sure the email is mobile-friendly, since most Millennials read emails on their phone.
If you want even more insights and strategies for fundraising major gifts from Millennial donors, watch our webinar on Millennial giving.