Philanthropy is constantly evolving, and charities must adapt to stay relevant and successful in this ever-changing field. One of the significant trends that the philanthropic sector needs to address collectively, is the reduction in the number of donors offset to date by the increase in the average donation, mainly attributable to the generous contributions of the baby boom generation. In this article, we will explore the implications of this development. In addition, we will see eight (8) strategies to reverse the downward trend in the number of donors.
Decline in the number of donors: a concern for the philanthropic sector
Over the past few years, we have seen a gradual trend: a decline in the number of donors to charities.
According to the latest data published by Statistics Canada, the median donation increased from $300 to $360 between 2017 and 2021 while the rate of tax filers making a donation decreased from 20% to 17.7%.
The study 30 Years of Giving in Canada published by Imagine Canada and the Rideau Hall Foundation clearly illustrates an inverse evolution of the donor rate and the average amount in each region of the country:
According to this study :
Currently, the number of donors is declining in almost every age group. The start of this decline began among the youngest age groups (1987 for those under 30 and 2012 for those aged 50 to 59, in particular). The only increases were recorded among those aged 60 and over.
- The relative importance of donors aged 40 and over has increased, while that of donors under 40 has decreased. In 2014, those aged 40 and over accounted for 77.9% of donors, compared to only 58.4% in 1985. During the same period, the proportion of donors under 40 went from 41.6% to 22.1%.
- The absolute value of donations made by older donors has increased significantly since 1985. Currently, those aged 70 and over give 4.7 times more than in 1985 ($2.9 billion compared to $625 million). Those aged 60 to 69 give 2.9 times more and those aged 50 to 59 give 2.7 times more than in 1985.
- During the same period, the value of donations made by those aged 30 to 39 increased by just 7%, while donations from those under 30 fell by 16%.
- The relative importance of older donors has also increased significantly. Donors aged 50 and over currently give nearly three-quarters (74.3%) of all donations, compared to just over half (53.8%) in 1985. Just those aged 70 and over account for 30.4% of donations, up from 15.8% in 1985.
The increase in average donation thanks to the baby boom generation
Although the number of donors may be declining, there is a glimmer of hope for charities. People born during the baby boom, who have been loyal and generous donors, tend to give larger amounts when supporting a cause they care about. Their desire to leave a positive legacy in society drives them to contribute meaningfully.
Several factors contribute to this development. First, the baby boom generation, which has driven philanthropy for decades, has gradually reached retirement age and is making generous charitable donations, having grown from $2,500 per year on average to $3,310 between 2017 and 2021, allowing the sector to continue to grow despite the decrease in the rate and number of tax filers donating.
Their gradual departure will naturally lead to a decline in the number of donors and should encourage the philanthropic sector to double its efforts to replace these people with younger donors and retain their loyalty.
Use your imagination to facilitate contributions
Furthermore, philanthropy today faces increased competition. There are a multitude of charities and causes that potential donors can choose to contribute to. The rise of crowdfunding platforms and online fundraising campaigns also offer new options to people wanting to engage in philanthropy. Our organizations must demonstrate imagination in order to encourage these people to contribute through these platforms and facilitate their contributions.
Additionally, younger generations, such as Millennials and Gen Z, have different approaches to philanthropy. They often seek to actively engage with organizations whose missions deeply resonate with their values. These new generations sometimes prefer to make more targeted and one-off donations, which can lead to a dispersion of contributions.
Adapting to Thrive: 8 Strategies for Retaining and Recruiting Donors
To meet these challenges and to take advantage of opportunities, Canadian charities must adopt retention and recruitment strategies adapted to these developments:
1. Understand donor interests
Conducting in-depth research helps you understand the values and concerns of your current and potential donors. This will help you personalize your communications and drive deeper engagement.
2. Target the emerging generation
Although the baby boom generation remains essential, it is essential to also focus on younger generations. Understanding the values, concerns and interests of these groups is fundamental to establishing meaningful connections with them.
3. Use social media and digital
Social media platforms and online fundraising campaigns are powerful tools for reaching a wider audience and attracting new donors. You can optimize your online presence to increase the visibility of your initiatives and your cause
4. Offer personalized donation options
This means being transparent and flexible in how your organization solicits donations. You can offer donors the opportunity to choose how their money will be used while showing them the concrete impact of their contribution. Additionally, you can offer donation options that meet their preferences, such as recurring donations, legacies or donations to specific projects.
5. Tell inspiring and impactful stories
Why not focus on the stories of the people or communities benefiting from the donations? Emotional stories can spark a deep connection with potential donors.
6. Establish partnerships
You can collaborate with businesses, public figures and other organizations to increase your visibility and expand your reach.
7. Invest in retention
Neglecting existing donors is a common mistake. By devoting time and resources to strengthening relationships with your donors, you will encourage their continued support and help increase their level of contribution.
8. Transparency and accountability
Above all, it is essential to communicate clearly on how funds are used and the impact generated. Donors want to see concrete results from their support.
Adapt to prosper
Philanthropy is evolving, and charities must adapt to thrive in this changing environment. Anticipating the decline in the number of donors while capitalizing on the increase in the average donation thanks to the baby boom generation is essential to continue to make a positive difference in our society. By adopting donor retention and recruitment strategies adapted to current trends, Canada’s charities can ensure their success, make a positive difference in society and sustain their social impact. This is a challenge and a collective effort that we must meet together to ensure the growth of the sector and meet the needs of our communities.