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June 14, 2009

Changing Demographics Could Be More of a Challenge to Charities Than the Recession

Fund raisers might want to be more concerned about shifting demographics than economic swings, Judith E. Nichols, deputy director for external affairs at the Brooklyn Public Library, told fund raisers on Friday.

While charitable giving historically tends to be affected less significantly than other sectors of the economy either by recessions or by economic booms, it has undergone tremendous changes in response to new generations and their changing attitudes toward philanthropy, said Ms. Nichols at a session of the Fundraising Day in New York, a conference sponsored by the Greater New York chapter of the Association of Fundraising Professionals.

For example, she noted, by 1990 the average American donor was giving half of what the average donor gave in the 1920s. And since 1995, the wealthiest Americans have reduced the amounts they give to charity when measured either as a percentage of their incomes, or as a percentage of their estates upon death.

The rise of baby boomers as the dominant population in the work force has already forced charities to change some of their fund-raising methods and messages.

While direct-mail appeals worked well with donors born before World War II, who felt loyalty toward well-known charities, she says, they have proven less successful for soliciting baby boomers, who are more distrustful of authority.

And, said Ms. Nichols, fund raisers need to consider the fund-raising implications of an aging and more diverse population. Longer life expectancies for example, have made donors more reluctant to make large gifts, as many are afraid of outliving their assets. That — on top of the expectation that death rates will remain low for the next 15 years — means nonprofit groups need to step up efforts to seek bequests and other types of planned gifts, said Ms. Nichols.

“Nowadays, we can’t afford to be lazy and assume that even if we don’t have formal planned-giving programs, something will come in to our organization.”

Similarly, fund raisers should be mindful that minority populations, including African Americans, Hispanics, and Asian-Pacific Americans, which now make up 25 percent of the population, will by 2050 be the majority, said Ms. Nichols, and that all these populations have affluent segments that are often overlooked by nonprofit groups.

With that in mind, she said, the Brooklyn Public Library recently translated its marketing materials into five languages — Chinese, French-Creole, Polish, Russian, and Spanish — to better reach different constituencies within the local community.

Nonprofit group needs to start crafting fund-raising messages that appeal to specific parts of the population, says Ms. Nichols. “The homogeneous message misses everybody.”

— Paula Wasley

Sunday June 14, 2009 | Permalink

Comments

1. That last statement – “The homogeneous message misses everybody” – is really the key.

   Life is highly segmented and fragmented today. The typical TV viewer has 110 channels, not just ABC, CBS, NBC, and PBS. The typical information consumer has 10,000 blogs and websites to choose from, not just the evening paper or the morning paper – or Peter Jennings vs. Dan Rather.

   And we’re a much more heterogeneous society, with growing populations of minorities that soon won’t be minorities.

   Even so, many non-profits still want to be all things to all potential donors. Even when we get past demographics to things such as lifestyle or psychographics, shotgunning the same message out to everyone just isn’t going to cut it anymore. You’ve got to identify your target, really get to know your target, and speak to them in a way that is relevant (content, tone, and method).

   — Ron Sellers, Ellison Research    Jun 15, 03:43 PM    #

2. Thank heavens! Another voice out there saying you can’t just wait for planned gifts to show up – you need a formal program to solicit for them.

   — Lorri Greif, CFRE    Jun 15, 03:55 PM    #

3. Any organization that wants its message to be understood must be aware of how each audience group likes to receive messages, the language that will resonate, and what is important to that audience. The discipline of anthropology has a lot to offer in this area.

   — Stephanie Leibowitz, Cultural Insight    Jun 16, 07:04 AM    #

4. Fundraisers should become culturally educated and tuned into the needs of diverse populations….gender, cultural, age, etc. Who is in your data base and why?

   — Sue    Jun 19, 01:02 AM    #

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