Kat Banakis, Director of Strategic Implementation at GG+A Analytics, explores the giving behavior of five generations of donors, to better understand the way giving is changing and what we can expect in the future.
Giving Trends by Generation
GG+A analyzed the alumni giving at 11 higher education research institutions with mature fundraising programs in order to see what trends, if any, could be found in giving by generation (Greatest, Silent, Baby Boomers, Generation X, Millennial). In particular, we wanted to look at how the giving behavior of people of a set age – say 30 or 40 years old – compared over time in hopes of being able to shed some light onto planning considerations for development going forward. The results showed a likely increase in the need for major gift prospecting.
Methodology: We created standard definitions of gifts across the cohorts and adjusted the dollar values for inflation.
--Analyzed the median 95% of gifts
--Limited the population analyzed to living alumni donors where age was available.
--Included annualized commitments (outright gifts and pledges).
--Adjusted all gifts for inflation (CPI)
Findings: In short, we found that the participation rate of alumni giving seems to drop with each generation, but that those proportionally fewer individuals are giving more dollars.
Participation rates in alumni giving appear to decrease from one generation to the next. (Click on the image to see larger size)
The average size of gifts in inflation-adjusted dollars is increasing with each generation.
Cumulative is giving also increasing.
Implications: In some ways the data confirms what could have been hypothesized from broader economic and demographic trends. More people are attending college now than ever before. In 1940, 6% of 25-29 year olds had completed a bachelor’s degree; in 2010, 32% had completed a bachelor’s degree. It is reasonable that the sense of affinity and participation have gone down as both numbers and diversity (age, gender, class, religion, and race) of alumni have increased. As is widely discussed, the debt burden of alumni has increased, which likewise may contribute to proportionally fewer alumni to participate philanthropically in his/her alma mater. According to the College Board, the average debt per bachelor degree graduate increased by 12%, (from $10,600 to $11,900 in 2012 dollars) between 2001-02 and 2006-07, and by 20% (from $11,900 to $14,300) over the next five years. As of the first quarter of 2012, the average student loan balance for all age groups and all degrees was $24,301.
In terms of approaches to development in higher education, this raises some important issues about the even larger role that major and principal gifts may play in the future if the trend of a smaller percentage of the alumni population contributing ever larger gifts continues. In the area of prospect research, this may mean an even greater emphasis on pro-active prospect research to identify promising alumni prospects for a continual major gifts pipeline. The pool of alumni likely will continue to increase, while the donors within that pool proportionally decrease, making keen prospect research all the most important.
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