How Nonprofits Are Blowing It With Their Future Source of Revenue

Philanthropy & The Millennials

According to the U.S. Department of Labor, by the year 2015, Millennials will make up over 50% of the workforce in America. Work = Money. As an individual, money brings power and influence. As a collective group, money brings attention. Based on the way consumer brands market to their audience, they get this. Nonprofits, on the other hand, don’t.

A Little Background On Fundraising

Baby Boomers preferred method of giving to charity is via paper mail, aka: snail-mail. For the charity this is known as a direct mail campaign. The mailing is full of painfully boring, long winded facts about what the charity has accomplished in the last year and their goals going forward. This mailing will include a stamped and self address envelope for the Boomer to cut a check and mail back. This fundraising method sucks. In fact, I’m even boring myself writing about it.

Why Direct Mail Sucks

But wait, direct mail brings in lots of money! Of course it does. But not from Millennials. Direct Mail neither appeals to them nor empowers them. For one, Millennials don’t write checks. In fact - based on the current rate of decline — checks will be almost nonexistent by the year 2020. Millennials also like to engage with content they can share. Direct mail is the least engaging form of fundraising out there.

Direct mail doesn’t empower donors.

We have all received a nonprofit’s direct mail solicitation at some point in our lives. Now ask yourself this question: when is the last time you received one of these mailings, and were so moved by it, that you made 10 photocopies and forwarded it to 10 friends? I’m guessing never. This just doesn’t happen. Millennials are the most connected generation in history (e.g. Facebook, E-Mail, Twitter, etc). Doesn’t it naturally make sense to provide them with content that they can easily share within their own networks?

If It Ain’t Broken, It Soon Will Be

As a cofounder of WeDidIt, a fundraising platform for nonprofits, I speak to a lot of different organizations. We work with close to 200 nonprofits and I’ve spoken with thousands more. I hear a variation of the following more times than I like “well, we only fundraise through direct mail, and it works so we’re not going to change it”. Online fundraising and engaging Millennials is not a strategy for every organization. To help with determining if it’s right for an organization I created the below flow chart.

The fact of the matter is many nonprofits believe that just because what they’re currently doing is working, they should not try new things. This thought process is dangerous. We’ve seen how this narrow minded view has been the demise of big consumer brands (::cough cough:: Blockbuster ::cough cough::). Nonprofits are not immune to the changing times. Either you evolve or you die.

Flipping The Funnel

I was first introduced to “flipping the funnel” by Seth Godin. In fewer and less eloquent words; instead of using the “funnel” to stuff content down the throat of individual prospective donor, nonprofits should give their donors the power to spread you message within their own personal networks by “flipping the funnel” on it’s side and turning into a megaphone that they can give to their donors. The way to do this is with engaging content that you enable and empower your supporters to share.

Millennials want to use charities like a soapbox

According to the Millennial Impact Report, 72% of Millennials would share information about how a cause they support with friends and family. As a generalization, a Baby Boomers would rather cut a $500 check for their charity of choice where as a Millennials would prefer to get 10 friends to give $50 a piece. Though this may be seen as a more selfish form of philanthropy, it’s actually great for charities. What more could a nonprofit ask for than an additional channel for reaching new donors?!

The Future

The next 5 years are going to be really interesting in the nonprofit industry. We’re going to see a huge shift in the way nonprofits interact with their supporters. We’ll see the the painful fall of many older established nonprofits as well as the fast rise and success of a lot of new nonprofits that are run by younger and more savvy founding teams.