Charities in Turmoil - The New Face of Philanthropy

by Catherine Clark

Charities have long held an important and unique place in communities around the world. They provide support to those who live on the margins of society; they give money in situations where public funds have been cut or are unavailable; they provide services in times of natural or manmade disaster; and they advocate for those who cannot advocate for themselves. In short, good charities do their part to make the world a better, fairer place for all. And at a time when the world is moving in new and unpredictable directions, that’s a vital role.

However, the resilience of charities – locally, nationally and internationally – is being sorely tested. Statistics now show that the idea of giving as we currently know it is changing, and changing profoundly, and there are two major factors contributing to that seismic shift.

First, we have massive generational change. The so-called Greatest Generation – those who survived the depression and World War II – is almost entirely gone. Their children, the Baby Boomers, who remain, statistically, the single most generous generation to date, have reached their giving zenith. Gen X is giving, but not at the rates seen with Boomers, and the Millennials who follow them are just getting started and, what’s more, have been slapped with labels – fair or not – that define them as needy and narcissistic. This is not, on the face of it, good news for charities in the long term.

In fact, when speaking of changing demographics, David Coletto, the President of Abacus Data, offers a sobering analysis: “I think generational change will be the greatest threat to the future of giving and philanthropy over the next decade.”

The second factor contributing to change on the charitable front is that we live in an age of declining trust: in the traditional institutions which govern us, in the people who lead us, and even in the businesses and organizations which help shape our various communities. Charities are not immune to this; rather, they are dangerously vulnerable to it because people hold them to a higher standard.

So, what will be required for charities not just to survive, but to thrive?

First, charities will need to focus heavily on transparency, accountability and effective communication if they want to gain and maintain public trust.

Second, they will need to look for innovative ways of engaging Millennials – who are not content with the status quo when it comes to almost anything, including charities – while continuing to focus time and energy on Baby Boomers and Gen Xers, who still give the most and will for years to come.

Recently, the Rideau Hall Foundation (RHF) partnered with Imagine Canada to issue a report called 30 Years of Giving. It’s the most comprehensive long-range picture of individual giving in Canadian history, and their findings underscore the urgent need for a new approach.

“While the total dollar value of giving is still going up, the number of those giving is dwindling and aging, which means charities are more reliant on a smaller group of individuals,” says Teresa Marques, President and CEO of RHF. “It’s also not clear that the next generation of givers is being re-populated or encouraged to look for ways to give in similar ways. Some charities are focusing on this but many are not.”

how can charities do better?

First, smart charities should not be swayed by the negative labels sometimes applied to Millennials, and instead see that demographic as a major opportunity. Millennials are intelligent, educated, predisposed to give back – even if in non-traditional ways – and they have immense social clout. When they do give to charities, it’s often in response to a direct ask from someone they know, and they like to share the fact that they’ve given across their social media platforms.

“I think Millennials look at charities in a different way,” says Abacus’ David Coletto. “The duty to give is gone. They have to be asked and engaged and see a real need. The cause needs to align with their own personal brand and they need to be recognized and celebrated for their support.”

Millennials also encourage others in their social networks to give, and they actively advocate for causes they like – and against causes they don’t. This can be a phenomenal boon to a charity they support, but a very dangerous situation for one they see as breaking their trust.

While Millennials may currently give less, it’s important to remember that they are young, building careers, paying off debt, and raising young children – in other words, they are stretched for cash at this stage of their lives. But not forever.

Hilary Pearson, President of Philanthropic Foundations of Canada, underlines the challenge and opportunity this poses for traditional charities: “A charity has to work hard to demonstrate in a competitive world why its mission and work are worth supporting and also has to understand that there are many other organizations dedicated to social impact that are not basing their appeal simply on their charitable status. A social enterprise can appeal more to a Millennial than a charity if it appears to be ‘getting things done’ and changing the world.”

Interestingly, Art Taylor, CEO of the Better Business Bureau’s underscores this sense that Millennials are committed to ongoing positive change and direct impact – not just for themselves but also for their children. “Despite negative stereotypes about Millennials, our survey research shows that savvy Millennials are raising the most charity-conscious generation in history.”

According to, half of Millennial parents research charities before they make a donation, doing the legwork before they take the plunge. This is mostly because, according to the Blackbaud Institute’s Next Generation of Giving, they are highly invested in transparency, and expect the organizations to which they donate to show, rather than just tell them, where the money is going.

Teresa Marques underscores this fact: “For many young Canadians, giving is a personal interaction and requires a personal connection; they are not content to give and walk away and they welcome higher levels of interaction with those they are supporting. This in part explains the attractiveness of things like GoFundMe and similar platforms, where the connection is direct. Many charities have a lot of work to do to make this happen.”

And while Millennials are the future of philanthropy, there is a long way to go before charities and Millennials have a symbiotic relationship, because the current approach to philanthropy was developed not just for an entirely different generation, but for a completely different time: one without Internet, mobile phones and social media – the lifeblood of Millennials.

This is a generation which may never have mailed a letter, so tried and true methods like direct mail campaigns will have no effect on them. Mobile giving is essential, and the charities that can’t provide their Millennial – and other – donors with a quick way to ‘click and give’ simply won’t get the cash.

Finally, Millennials and charities don’t yet see eye to eye on the idea of capital. Whereas previously capital meant cash, Millennials are often in a better position to donate in other ways: by providing brand support, volunteer hours, area expertise, supply donation and more. “Charities need to find ways to improve their personal engagement with young donors, make sure the impact of donations is clear, and look for creative ways to encourage the giving of ‘time and talent’ and not just money,” says Teresa Marques.

In the end, how do charities find their footing in this changing environment that poses so many challenges? Hilary Pearson notes that there are several paths forward, but not all of them have happy endings.

“Building deeper relationships with fewer donors may be the key to successful and sustainable philanthropic revenue,” Pearson notes. “The baby boom generation is at the demographic point where building a relationship for legacy giving is crucial. And, for younger donors, it’s about building opportunities to engage with the donors through stories, interactions, sharing information about what the charity is accomplishing. All of this puts a premium on the capacity of charities to communicate and tell their story really effectively, and to build digital platforms. Many smaller charities don’t have the technical skills, technology platforms and communications and marketing strategies for this. So the real threat to their viability is their inability to respond to the generational shifts in expectations and behaviour around philanthropy.”

The next decade will be a fascinating and, at times, difficult and winding journey of discovery and reinvention for many charitable organizations worldwide. But those that emerge on the other side of that journey will be nimble and agile, ready for a new generation of givers who want to help make the world a better place.

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