The Current State of Alumni Giving
Alumni giving has increased 6.3% since 2016. While this trend is certainly encouraging, it’d be foolish to assume this will continue into the future. With the incredible economic growth experienced over the past 10+ years, alumni have more disposable income available for charitable contributions. Introduction of new tax laws, and the potential for a severe market correction puts this growth at risk. In the absence of a crystal ball, let’s focus on the now, rather than the future. In the paragraphs below, we’ll take a deep dive into the current state of alumni giving, and what this means for you and your organization.
When looking at donor statistics, it’s helpful to break down the donor pool by generation. Looking at these generations by the numbers, we’re able to draw some important insights:
Gen Z - The youngest generation in the giving pool, representing only 2% of charitable contributions, Gen Z represents the new kids on the block. Digitally adept, this generation is extremely effective at influencing their peers on causes they’re passionate about.
Millennials - This much talked about generation has increased their giving by 3% since 2013, now representing 14% of all charitable contributions. This generation must balance financial demands associated with starting a career, building a family, and pursuing philanthropic endeavors.
Gen X - Rapidly approaching their prime giving years, Gen X’ers are on-deck to become the largest segment of the donor pool. More importantly, over 20% of Gen X’ers plan on increasing their charitable contributions in the coming year.
Baby Boomers - 41% of all charitable contributions were made from Baby Boomers. Let that sink in. While this generation is currently the largest player in higher education giving, the average annual charitable contribution per Baby Boomer has decreased by over 13% in the past few years. Over the next decade, expect their overall dominance to wane.
The “Silent Generation” - The most mature of the generations, this demographic is characterized by the highest average donation amount. However, their declining population size means that this once dominant force will continue to wane in the coming years.
Seeing an Impact
With information becoming increasingly available at our fingertips, consumers are more informed than ever when making purchases. Unfortunately, this transparency does not extend to the world of charitable giving. Too often we hear about non-profits and charitable organizations diverting funds away from the cause they are promoting, and instead, using donor funds to support administrative costs.
When it comes to how their contributions are being spent, the majority of donors say that they are concerned their contributions may be used to carry administrative costs, rather than the cause they are looking to support. However, only just over half of the donor pool actively performs due diligence to see how their donation is being used.
Further complicating matters, the majority of organizations do not disclose specifics on where donor dollars are being spent.
Using AlumTies, donors are able to make donations to a specific cause, project, or program, ensuring that their contributions are being spent as the donor intended.
With consumers rapidly shifting from brick and mortar purchasing to online purchasing, it should come as no surprise that donor giving habits are mirroring this trend.
In the past year, we’ve seen online contributions to higher education increase by over 13%, with online contributions now accounting for about 7% of total donation volume.
The majority of online donations are made by new, or first-time donors. Though typically smaller gifts, these donors are making their first step towards becoming habitual donors.
With this trend set to continue into the foreseeable future, institutions looking to maintain pace with their peers will need to prioritize online giving as a core component of their fundraising strategy. Those wishing to outpace their peers should look to mobile giving as the next frontier.