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How the Young Give

A new report from Giving USA Foundation and the Center on Philanthropy at Indiana University suggests that "Millennial" donors (adults born since 1981) have different approaches to giving, and suggests ways to adapt to a more connected and global-minded generation.

Right now, Millennial donors give markedly less than their Gen X and Boomer counterparts. And they give less frequently. The data below show the differences in giving.

Giving By Generation

(Data from the Center on Philanthropy Panel Study, in a nationally representative sample of U.S. households, based on contributions in 2006.)

  • 33 percent of households headed by a Millennial gave, and the average total contributions were $557.
  • 59 percent of households headed by a member of Gen X (born 1964 to 1980) gave, and the average total contributions were $1,488.
  • 69 percent of households headed by a Boomer gave, and the average total contributions were $2,613.
  • 77 percent of households headed by someone born before 1946 gave, and the average total contributions were slightly lower than Boomers' average, at $2,540.

However, researchers say it is important to note that some of the differences we observe now in giving by people of different generations could be related to their life stage rather than actual differences in perspective based on when they were born. For example, people who now do not own homes and have children might change their giving in the future, as they reach those stages, so that their giving in coming years will look like that of today's home-owning parents.

Millennials, then, as they complete their education and begin to earn higher income, are expected to give considerably more in the near future.

"A wise fundraiser might ask 'why should I target the younger generations at all, if they don't give at the same levels as other age groups?,'" said Edith Falk, chair of Giving USA Foundation. "The answer would be that Generation X is now entering its peak earning years and the Millennials are not far behind. Engaging people under 45 now as donors and volunteers using methods that appeal to their giving nature truly makes sense."

A New Approach

Studies find repeatedly that Millennials and Gen Xers differ from older people in the ways they see and connect with the world, and also their views of giving.

These two generations prefer more electronic communications and less paper in initial and ongoing communications from charities. They also express different values and preferences. Generation Xers are emphasizing giving in support or honor of their families, while Millennials are more focused on improving the world. For other generations, the emphasis is slightly more on giving to address issues in the local community, causes related to poverty, and the support of religion or religious causes.

Young donors want more hands-on, direct experiences with charities that they support before donating. They also like to have a voice in how the charity operates. They want board positions, committee positions where their work affects the organization's success, and opportunities to cast ballots or to complete polls about their preferences.

Finally, Millennials and Gen Xers are wired and connected. Evidence to support Millennials' diverse use of electronic media is included in the 2010 Pew Research Center's Internet & American Life Project and other reports:

Ninety-three percent of Millennials regularly go online, with 50 percent of this population using mobile Internet. Seventy-two percent of online Millennials reported using social networking sites, whereas only 40 percent of those older than this age group reported doing so.

The greatest majority of Millennials use Facebook (71 percent), and the majority (67 percent) of the technology experts surveyed in one study reported that the Millennial generation will continue to utilize social networking platforms as they age.

One-third of those under the age of 30 regularly post or read social networking updates-younger Millennials are the most likely to do so.

Reaching Out

Here are some things to consider in adapting to the new forms of giving brought about by younger generations.

  • Have you thought about and implemented ways to build trust between your organization and prospective donors in these age cohorts?
  • Can you give your donors and volunteers a way to build relationships with friends and to share their enthusiasm for your organization, whether face-to-face or through electronic media?
  • Are you using multiple communication channels for requests, sharing information and reporting results?
  • Is your organization focused on "high-touch" donor recognition and volunteer events so that people engaged in your work feel valued and special?

The report, "Charitable Giving and the Millennial Generation," is available at www.givingusareports.org.

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IRA Charitable Rollover Included in Final Tax Bill - Provision Could Boost Giving by Billions Annually

The Association of Fundraising Professionals (AFP) today applauded the inclusion of the IRA (Individual Retirement Account) Charitable Rollover in the tax bill recently signed into law by the President, noting that the provision has been proven to work and could increase giving by billions every year.

The IRA Charitable Rollover, a part of the Middle Class Tax Relief Act of 2010, would allow donors age 70½ to exclude from their taxable income any IRA funds up to $100,000 that have been withdrawn and transferred to a charity when filing a tax return.  
The IRA Charitable Rollover expired at the end of 2009, and AFP has been working to see the provision put back into law. Before it sunset, the provision was estimated to have raised hundreds of million for charities across the country despite being in effect since just 2006.

The provision is extended through Dec. 31, 2011, in the Middle Class Tax Relief Act of 2010.  This extension also is retroactive, meaning that the tax benefits of the provision apply to any qualified donations made after Dec. 31, 2009.  The extension of the IRA Charitable Rollover also includes a special provision that allows taxpayers who make any qualified donations between Dec. 31, 2010, and Feb. 1, 2011, to deem that those donations were made on Dec. 31, 2010, for tax filing purposes.

"These tough economic times have hit a lot of charities very hard, with giving either flat or dropping, while demand for services rises tremendously," said Paulette V. Maehara, CFRE, CAE, president and CEO of AFP. "Tax incentives such as the IRA Charitable Rollover provision play a vital role in encouraging donors to make gifts, especially as the contribution amounts become larger. The rollover provision is a powerful and unique way that donors can make support charitable causes in their communities."

While pleased at the rollover's inclusion in the tax bill, AFP is committed to making this giving incentive even more conducive to donors and the giving public. AFP will be working with members of Congress to remove the $100,000 cap on gifts from IRAs and lower the age threshold for all such gifts from 70½ to 59½.

"The IRA Charitable Rollover has worked very successfully over the last few years, but it could be enhanced to encourage additional giving," added Maehara. "We believe the provision's impact could reach billions of dollars annually once the public becomes more familiar with it."

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Blake Mycoskie of TOMS Shoes to Speak at International Conference

Upon learning that most children in developing countries grow up barefoot, Blake Mycoskie created TOMS Shoes with a simple promise: to give a pair of new shoes to children in need with every pair sold. The TOMS One for One movement harnesses the power of consumers to make positive social change. Hear Blake speak at Tuesday's general session at the International Conference on Fundraising in Chicago. Go to http://conference.afpnet.org/.

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