Gen Z Giving: Understanding Generation Z's Donation Habits

Donation habits vary from generation to generation and this is a topic that nonprofits must stay on top of. The Silent Generation prefer to send checks in the mail and are heavily influenced by personal communication. Baby Boomers have a habit of being generous donors but are more likely to contribute to established organizations. And Generation X values transparent and authentic nonprofits, and tends to research charitable causes before donating to them. From this small example it's clear to see the differences in donation habits between generations.

Each generation's donation habits are molded by the influences on their lives and their characteristics. The Silent Generation and Baby Boomers didn't grow up with much access to technology and this is reflected in their choice to donate through more rudimentary methods. Generation X is known for being resourceful and this skill is used by them to understand charitable causes before committing to donations.

Now comes Generation Z otherwise known as Gen Z or Zoomers. Gen Z encompasses anyone born between the mid-to-late 1990s and the early 2010s.

Gen Z is a generation that grew up with great access to technology and it continues to have a huge influence on their lives. With this comes immediate and, almost unlimited, access to information. Members of Gen Z are informed and educated about causes that they care about. This makes them susceptible to trends and issues that they face personally.

Furthermore they have grown up in an era that emphasizes, and continues to emphasize, the importance of inclusion and diversity. Therefore Gen Z donors like to see these values mirrored in the charities that they choose to contribute to. This applies both to the workforce of the organization and those that benefit from its work.

Generation Z's importance to the nonprofit industry is currently at an all-time high. Zoomers are beginning to join the workforce which results in disposable income. Individuals might choose to donate a portion of this disposable income to a charitable cause and nonprofits must be doing what they can to convince Gen Z that they're the right organization to receive a contribution.

Patterns in Gen Z Donations

Research from Abacus Cooperative indicated that, in 2022, adults from Gen Z made an average of 5.3 donations. This compares favorably to the 4.8 made by Millennials and the 4.7 made by Generation X. Additionally Classy’s Why America Gives concluded that next-gen donors, defined as Millennial or Gen Z contributors, “show a willingness to cut back in other areas to continue their charitable giving behavior and, in many cases, increase it. Next-gen donors are also more likely than [baby boomers and Gen X] to account for charitable donations in their financial planning.”

This research highlights a selfless trend in Gen Z giving. They are a generation of individuals that place value in supporting charitable causes. Once more this emphasizes the importance of Gen Z to the nonprofit industry.

As referenced earlier Gen Z is a generation that has grown up alongside technology. This has resulted in a generation of individuals equipped with an unprecedented level of technological literacy. The impact this has had on Gen Z's giving preferences and trends is remarkable. Here are some of the more notable examples:

1. Research Capabilities

The worldwide web allows for unlimited access to information. Gen Z are among the most efficient users of this tool when it comes to research. Nonprofits must be more careful than ever to maintain a squeaky clean image. Any misdemeanors or serious controversies are sure to make their way to the web where they'll be found by Gen Z donors.

Gen Z's capacity for research allows them to make careful and calculated decisions when choosing a charitable cause to support. They will opt to donate to causes that have a clean track record and a history of success.

2. Marketing Awareness

Growing up with the internet results in a shrewdness to marketing. Members of Gen Z can sniff out insincere marketing tactics from a mile away. While these strategies may have worked, and may still work, on Baby Boomers and Generation X, Gen Z has grown wise to them.

If Gen Z donors interpret nonprofit advertising as insincere or predatory they're unlikely to support the cause related to the campaign. Therefore it's encouraged to be truthful and transparent while marketing to Gen Z, and focus more on success stories and milestones rather than weak emotional appeals and guilt tripping.

3. The Power of Social Media

With technology and the internet comes social media. Anyone that tells you social media isn't a powerful tool is lying to you. It's an influential innovation in the technological landscape and one that appeals to Gen Z. This is a generation that spends a lot of time using social media to connect with their peers. Ideas and trends form on these platforms and spread like wildfire.

It's crucial for nonprofits to have a social media presence in order to identify trends, follow them, and connect with Gen Z. A large portion of fundraising is now carried out on these platforms and they offer an opportunity for growth that charitable causes cannot afford to miss.

4. Social Awareness

Due to their use of the internet and social media Gen Z are a socially aware generation. They have an understanding of issues facing the world, their local areas, and themselves. This heightened awareness results in an attraction to charitable causes that combat relevant problems. Gen Z donors are more likely to contribute to causes that reflect their level of social awareness.

What Motivates Generation Z Donors?

As with other generations Zoomers have their own motivations to donate. Baby Boomers often feel a responsibility to give back to their communities after having lived through major historical events. Similarly Gen X is tied to its communities and enjoys witnessing local improvements. And Millennials are motivated by their belief in their own ability to be a catalyst for social change. But what motivates Gen Z?

Belief in an Organization's Mission: Gen Z has to believe in an organization's mission before they support it. This means that they're unlikely to contribute to causes that seem out of reach, unachievable, or misdirected. Nonprofits with a mission that's relatable and realistic are far more likely to receive support from Generation Z.

Trust in an Organization: This motivation ties back to technology and the research that Gen Z is able to perform on nonprofits. Due to their access to information Gen Z donors seek to contribute to trustworthy causes. They are uninterested in organizations that don't value their missions and are drawn to charities with proven track records.

Assurance that the Organization Gives back to the Community: Witnessing the positive impact of their contributions is valued by Gen Z. They are very motivated by nonprofits that have the ability to showcase the impact of their work, and share success stories and testimonials. According to research conducted by Blackbaud 70% of Gen Z respondents stated that they'd be motivated to donate by impact reporting. Of course the impact reporting in question must show a positive outcome to be effective.

In summary Gen Z is motivated to donate by organizations that set achievable goals, are transparent, and have the ability to prove the positive impact of their work. If these conditions can be met then nonprofits can expect to garner the support of Zoomers.

How Gen Z Donors Contribute

Generation Z's preferred donation methods are, like most other things they prefer, influenced by technology. While the majority of these methods are innovative and new, they tend to be open to more traditional donation methods if they're accommodating. Let's break down Gen Z's donation method preferences into two categories:

Traditional Donation Methods

1. Cash

Digital donation options are on the rise but, as they say, cash is king. While Gen Z leans toward credit card and online donations, they are open to making use of cash as long as they're informed. If your nonprofit is expecting to accept cash-only donations and Gen Z donors are likely to be involved, it's best to inform them ahead of time that cash is the preferred donation method.

2. Mail

This method of donation is extremely traditional and is likely to resonate more with older generations. It's not recommended to solicit donations from Gen Z contributors using a mail-in system. However Gen Z is an adaptable generation open to new ideas and they'll likely adopt this method of donation if absolutely necessary.

Innovative Donation Methods

1. Crowdfunding

Crowdfunding was birthed from the invention of the internet and allows individuals to run online campaigns that can be contributed to by anyone and everyone on the web. Zoomers are compelled by digital donation options and crowdfunding is a prime example of one.

2. Social Media

Fundraising campaigns benefit greatly from riding the wave of social media. Gen Z are among the heaviest users of these platforms. Social media campaigns make it straightforward for Gen Z donors to make contributions while partaking in their daily scroll of Facebook, Instagram, etc. With the advent of all-in-one solutions like Paybee, it's easier than ever to integrate social media into fundraising campaigns.

3. Subscription Models

Generation Z are frequent users of subscription-based platforms such as Netflix, Playstation Plus, and Spotify. This openness to subscription models translates into the nonprofit industry. An example of this is the World Wildlife Fund that offers an "Adopt a Tiger" subscription-based donation. Donors provide a recurring donation and receive a photograph of their adopted tiger, an adoption certificate, a tiger plush toy, and a bag of goodies.

4. Round Up at Checkout

Society's move from cash to digital payment options has opened the door for 'round up at checkout' donations. Gen Z are very familiar with digital payment options and tend to prefer them to traditional methods of transaction. Therefore Gen Z donors are exposed to and open to this method of contribution.

Impact of Generation Z Giving

Data from the US Census Bureau shows that Gen Z makes up roughly 20% of the US population, or 68.3 million people as of 2023. An informed and educated group this large is able to have a profound impact on the world around them through giving.

Zoomers are true drivers of social change. Through their use of the internet to research nonprofits and weed out the bad actors, Gen Z is able to channel their donations into organizations that are effectively making positive change. The heightened social awareness of Gen Z donors allows them to deliver favorable outcomes to current social issues.

The economic impact of Gen Z is just as huge as their social impact. The data shows that Gen Z donors are more generous than their counterparts from previous generations. This equates to more revenue being pumped into the nonprofit sector which translates to more social change. It's an important cycle that is heavily influenced by next-generation contributors.

The benefits of Gen Z's donation habits go both ways. While the nonprofit industry is receiving more funding it's also being held to a higher standard. We've highlighted Gen Z's, almost obsessive, use of technology to research organizations and verify their intentions. This results in a lack of contributions, from Generation Z, to disingenuous nonprofits. Charities that are unable to capture the support of the next generation are typically unable to continue sustaining operations. Therefore the consequences of malpractice in the nonprofit industry have become extreme due to the influence of Zoomers.

Challenges when Engaging Gen Z Donors

Learning about and understanding the challenges that nonprofits face when engaging Gen Z donors will help your organization to adapt to these hurdles and overcome them. Let's explore some of the common issues that arise:

1. Limited Disposable Income

Zoomers are typically at the early stages of their professional lives which means that it's common for them to have a limited amount of disposable income. Despite this they remain one of the most generous generations. Nonprofits should offer Gen Z donors a range of donation options that allow them to support the cause regardless of their financial situation.

2. Lack of Inclusion and Diversity

Charities that have failed to get on board with diversity and inclusion initiatives will be left behind by Gen Z. This is a generation that has grown to support these values. If this support isn't mirrored by an organization then it's unlikely to attract Gen Z donors.

3. Spuriousness

Generation Z emphasizes the importance of authenticity in the nonprofit space. Organizations that are spurious in nature won't resonate well with Zoomers. Charities must avoid deceitful practices to avoid this pitfall.

4. Limited Transparency

Information plays a vital role in the lives of Gen Z. When selecting a charity to support they'll conduct a vast amount of research to help make an educated decision. Organizations with limited transparency won't attract contributions from Gen Z donors because they won't have access to enough information to come to an informed conlcusion.

5. Political Affiliations

Gen Z are a politically active group of individuals. It's vital for organizations to understand how Gen Z donors will view any political affiliations that they may hold. Remaining politically neutral is the best route to take when possible. Leaning one way or another can determine the level of support that your organization receives from Zoomers.

6. No Passion for the Cause

Most importantly Gen Z is filled with passionate people. They expect this passion to be replicated by the nonprofits that they support. Showcasing a passion for your organization's cause will enable it to garner more support from Generation Z.

Case Study: Successful Gen Z Giving Campaign

To help understand why Gen Z giving campaigns are successful we'll take a brief look at an example. The campaign in question is the Justice and Equality Fund which is operated by RosaUK, an organization based in the United Kingdom.

Justice and Equality Fund

The Justice and Equality Fund is a fundraising campaign with the goal of supporting people and organizations that are focused on systemic reform and racial justice. Here's how the campaign appeals to Gen Z:

• Social Media Presence: The Justice and Equality Fund has a large presence on social media. There is a notable Instagram post made by Emma Watson, famous for her role as Hermione Granger in Harry Potter, to help spread awareness for the cause.
• Crowdfunding Campaign: GoFundMe is home to the Justice and Equality Fund's crowdfunding campaign. As mentioned earlier crowdfunding is a preferred donation method for Gen Z and hosting a campaign on GoFundMe helps to appeal to this group.
• Impact Reports: RosaUK, the organization behind the Justice and Equality Fund, releases impact reports related to the fund's progress. As we know Blackbaud research shows that 70% of Gen Z respondents stated that they'd be motivated to donate by impact reporting.
• Transparency: RosaUK's website contains a large majority of the information required by an individual to come to an informed decision about the organization. This level of transparency resonates well with Zoomers.
• Inclusion and Diversity: By definition this fundraising campaign is inclusive and diverse. One of its major goals is to create an equitable world for all.
• Social Awareness: The Justice and Equality Fund is at the pinnacle of social awareness. The very cause that it aims to support is one that is dear to the hearts of many members of Generation Z. Systemic reform and racial justice are two causes at the forefront of modern social justice initiatives.

FAQs

Q: What are the main characteristics and values that define Gen Z?

A: Gen Z is a generation defined by generosity, passion, and information. They are highly educated and knowledgeable, placing value on transparency, genuineness, and social awareness.

Q: How do digital platforms and social media influence Gen Z's giving behaviors?

A: Having grown up with technology Gen Z is extremely proficient in its use. Zoomers commonly use social media platforms to connect with their peers meaning that it plays an important role in their lives. Social media, and digital platforms in general, are of great value to nonprofits when soliciting donations from Gen Z.

Q: What are the key motivations behind Gen Z's charitable donations?

A: As discussed earlier in the article there are some common motivations for Gen Z donors: belief in an organization's mission, trust in an organization, assurance that the organization gives back to the community, and impact reporting.

Conclusion

To conclude Generation Z is a group of individuals that value information, technology, and social awareness. They expect transparency, authenticity, and passion from the nonprofits that they support. It's important for organizations to appeal to these preferences in order to capture the next generation of donors.

As Zoomers continue deeper into their professional careers they'll continue to have a profound impact on the nonprofit sector. The standards for charitable organizations are at an all-time high and they will continue to rise due to Gen Z influence. No longer can nonprofits hide behind a smile and false promises. With this also comes a generation of generous contributors who will funnel a large amount of revenue into the industry.

Social media will continue to be a major player in the game of connecting with Gen Z donors. Paybee is an all-in-one fundraising solution that can help your organization to integrate social media into its revenue generation practices. Furthermore it has a wide array of useful features that can amplify the impact of your nonprofit such as virtual fundraising events, analytical tools, secure payment processing, and much more.