Gen Z adults are the next big nonprofit donors. What can organizations do to stay relevant?

For nonprofits struggling with attracting and keeping donors, the solution may lie in how they reach Gen Z adults, who are poised to become the next big nonprofit donors. Marketing strategies grounded with data enable organizations to reach younger generations, and maintain those important connections to older donors, too.

New Epsilon nonprofit research from the Abacus Cooperative shows that in 2022, Gen Z adults eclipsed both millennials and Gen X in donations per donor. Gen Z donations stand at roughly 5.3 donations per donor, whereas millennials and Gen X donations stand at 4.8 and 4.7 per donor, respectively. This shows the younger generation has a strong drive to give.

Nonprofit organizations should think about how they can best reach audiences of varying generations. In order to maintain (or increase) funding, organizations need to continue to identify and reach older donors and implement stronger strategies to connect with younger adults too. With data, they can do all of that and personalize their marketing to reach real people with messages that resonate.

With Epsilon Data, nonprofits can know when to reach their donors and with what messages. This in seamless conjunction with Epsilon Digital helps drive better outcomes, stronger retention and ultimately empowers further positive change.

The decline of donor retention

People commonly donate when they feel financially secure, but with the current economy’s volatility and uncertainty, donor retention has taken a downward turn. While it's still difficult to pinpoint how much debt concerns will impact charitable giving in the future, trends show a persistent dip in donors, despite the Federal Reserve's attempts to curb inflation.

With the majority of nonprofit organizations already working on a slim margin, losing donors is, at best, not ideal for budgets and, at worst, fiscally distressing. Philanthropy in the U.S. has widely withstood economic turbulence in part by leaning on more aging donors. But as older populations decline, many nonprofits are asking: What now?

Epsilon’s Abacus Cooperative, the largest cooperative database in the U.S with over 3,000 contributing brands in key B2B and B2C categories, found that while overall donation revenue has increased, the number of households giving has actually decreased. Fewer households are simply giving larger gifts. Between 2020 and 2022, the number of households donating decreased year over year by 4%. 

In fact, the number of baby boomer households donating saw a 4% decrease in the past year and a 10% decrease in Silent Generation households. However, these older generations do still have the highest average gift size per donor, with the Silent Generation donating the most, at an average of $310 as compared to Gen Z donors donating the least monetarily, at an average of $149.

This may be why attracting younger donors is possibly being overlooked: although younger generations are giving more frequently, older generations still give more money, but the need to keep up donor momentum remains.

New donor opportunities on the horizon 

Despite giving the least amount monetarily, Gen Z adults are still primed to give. According to Abacus, Gen Z is on par with other generations when it comes to the number of organizations they give to: They gave to roughly 3.05 organizations on average in 2022, compared to the Silent Generation, who gave to the largest amount of organizations, standing at a marginally higher 3.83.

As they gain more money, Gen Z is expected to continue that charitable spirit. And that future isn’t too far off. An estimated $68 trillion will transfer to Gen Z and millennials during the next two decades, part of what experts are calling The Great Wealth Transfer.”

The problem many nonprofits face is how to capture and retain these donors now to foster meaningful and authentic relationships for lifetime value. And, if they’re using outdated, blanket strategies that can’t activate across multiple devices and channels, they may never create real connections that reach them at all. 

Identifying and reaching younger donors

Nonprofit organizations need to have a clear understanding of how to best identify and reach these newer generations of donors to avoid facing a donation crisis in the future. Part of that equation is developing and implementing a strong data strategy. Organizations need to know how and when to best reach audiences of varying generations to maximize their support, and Epsilon Data can help.

Epsilon Data's industry-leading consumer database, TotalSource Plus, helps organizations big and small get a full view of their current donors and prospects. These insights drive more strategic retention and acquisition, helping nonprofit organizations predict donor behavior on the individual level and personalize their efforts. For instance, using Abacus Cooperative and Epsilon Data's modeling capabilities, the American Society for the Prevention of Cruelty to Animals (ASPCA) saw a 5X increase in response rate and 2.5X lift in average gift amount.

With us, nonprofits can:  

  • Leverage new technology to optimize your data strategy: Identify the latest macro trends and campaign opportunities with AI-powered technology. With always-on optimization, AI Audiences provide the best performing audiences based on giving levels and profiles.
  • Complete donor profiles: Append age and generation data, adding phone numbers, emails and addresses to complete contacts.
  • Support loyal donors: Mark multi-year donors for cultivation and stewardship, appending giving indicators to mark valuable renewal prospects.
  • Prioritize foundational data: Dedupe and merge records, cleaning up source codes and attributes.
  • Reach new donors: find real people, unlock additional donor transactions and recognize your most valuable donors across all marketing channels   

Our consumer database gives nonprofit organizations insights into 250 million U.S. consumers and provides unparalleled coverage and breadth of consumer data all in a secure and privacy-designed framework. Our real data from real people delivers real outcomes and fosters real relationships. 

Organizations can further achieve performance-based, personalized digital media at scale with the help of Epsilon Digital, which can be seamlessly linked with Epsilon Data with no data loss. This enables personalized, 1:1 communication that can drive people to complete specific conversion events. Together, you can truly know your customer and deliver messages that are relevant to them across all their devices.

Nonprofits having a comprehensive understanding of their donors and their habits provides an advantage when it comes to navigating fiscal uncertainties. With Epsilon’s help, nonprofits can do just that and not leave money on the table, which means having an even greater positive impact on the livelihood of others.