Giving USA has been tracking philanthropic giving in the United States for 60 years. According to its most recent report from June 2015, more than $358 billion (yes, with a “b”) was donated to charities – the highest in the report’s history.
Of that $358 billion, $258 billion was donated by individuals – or 72 percent of the whole enchilada. Slice that even further and you’ll see that religious organizations dominated, and were the largest single recipient of donations by category, netting $114 billion (or 44 percent of all individual donations) – nearly more than the next three categories combined.
However, look more closely at the Giving USA data and you’ll notice that “Religion” is one of the slowest growing verticals. Add to this a study from Pew Research on Millennials and religion which reported, “Millennials are much less likely than older Americans to pray or attend church regularly or to consider religion an important part of their lives.”
While religious organizations and institutions (churches, mosques, synagogues, etc.) are the prevailing beneficiaries of donor giving today, the trend is clearly on the decline. Which begs the question: Are religious organizations and institutions ignoring the warning signs when it comes to donors?
Michael Hout, a professor of sociology at New York University, characterized the shift away from religion in this way:
Most age differences at any given time are the legacy of the times people grew up in. Many Millennials have parents who are Baby Boomers, and Boomers expressed to their children that it’s important to think for themselves – that they find their own moral compass. Also, they rejected the idea that a good kid is an obedient kid. That’s at odds with organizations, like churches, that have a long tradition of official teaching and obedience. And, more than any other group, Millennials have been and are still being formed in this cultural context. As a result, they are more likely to have a “do-it-yourself” attitude toward religion.
Results from our own Donor Loyalty Study reflect this trend, as well. The donor habits of Millennials, and to some degree Gen Xers, support this notion, as more secular-focused, family/children-focused organizations replace faith-based religious institutions as recipients of donations from these generations.
So, where do religious organizations go from here when it comes to donors and donations? Especially considering $100+ billion is at stake as both Gen Xers and Millennials grow in financial influence and maturity.
One thing we know from our own research and multiple industry reports is that younger generations, particularly Millennials, are interested in results, transparency, impact, and causes. This is very different from older generations (Boomers and Matures) that tend to be more passive in their giving habits and attitudes. The younger generations want to know how their dollars are being spent and what difference they’re making.
Religious organizations and institutions need to adjust to stay relevant:
- Focus on impact to the community in real and meaningful ways, not just about saving souls and communing with a higher being.
- Create opportunities for Millennials and Gen Xers to get involved and volunteer; volunteering and hands-on experiences are one of the most powerful ways Millennials engage with organizations they support.
- Create bite-size, consumable content that shows the difference your organization is making.
To really understand how to build loyalty with donors across multiple age groups and generations, download the full Donor Loyalty Study.