Author: WealthEngine

Whether you’re in the non-profit or for-profit industry, millennials, those between the ages of 24 and 40, are likely not the last group you think of as being wealthy. While only 12% of the world’s population of ultra-high net worth individuals, those with a net worth of $30m and more, are under the age of 50.  Millennials are in fact a growing and influential proportion of the wealthy.  

Source 

It can take many years, if not decades, to build substantial wealth. Most of the ultra-wealthy are between the ages of 50 and 70 and it is those individuals over 70, who hold the highest percentage of wealth.  

With most of the ultra wealthy over the age of 50, why should your business or nonprofit invest in younger populations, including millennial millionaires?  

The millennial generation will continue to grow and become a larger proportion of the wealthy as the baby boomer generation continues to decrease. In the future, many of your wealthy patrons and donors will be those who are currently millennials.  

Despite the pandemic and its economic impact, the wealth of ultra high net worth individuals grew by 2% in 2020. With the heightened digitalization from remote working and online shopping in 2020, wealthy individuals under the age of 50 saw the most financial growth. The wealth of millennial millionaires contributed to two-thirds of the total ultra high net worth wealth growth, the largest of any age group.  

Source 

 Investing in millennial millionaires now has the potential to pay off big in the future. However, many organizations do not yet have this minority of wealthy on their radar as potential donors or investors. Taking the time to build relationships with them now will make them loyal donors or patrons later.   

When you become familiar with their passions and interests, valuable relationship-building forms. Over time, millennial millionaires will keep your organization at top of mind. This increases the likelihood of them supporting you when they accumulate more wealth.  

How do you engage with wealthy millennials? Like their non-high-net-worth counterparts, those between the ages of 25 and 40 have unique interests.   

Who Are Millennial Millionaires?  

Very high net worth millennials, those with a net worth between $5m and $30m and those with ultra-high-net-worth, $30M+ have a different makeup than the older wealth cohorts. Some key observations about the characteristics of wealthy millennials include:  

The wealthy millennial VHNW group features the highest concentration of women. 

Source  

For most millennial VHNW individuals, their wealth is self-made. 

Source 

Over a fifth of VHNW millionaires have gained their wealth through the banking and finance industry.  

Source 

The Interests of Millennial Millionaires 

The interests of very-high-net-worth and ultra-high net worth millennials vary from their older counterparts. The amount of wealth accumulated, and life stage are the two biggest reasons for this difference.  

Source 

 Despite the millennials’ modest share, examining their current interests provides an insight into emerging trends and the likely interests of the future wealthy. 

VHNW millennial interests differ significantly from those of the general VHNW population.  

These millennials’ top 10 interests include travel, music, food and animals, none of which feature among the leading pursuits of the general VHNW population.  

Sports, technology and travel come top.  

Sports, technology and travel are more important to VHNW millennials compared to the rest of the population, and there is a much higher degree of engagement.  This is likely a reflection of the group’s interests but also of the advantages of their age and relative health. Technology also ranks much higher with VHNW millennials than non-millennials, with younger individuals more likely to be involved with tech innovation in their leisure time and working lives.  

Millennial Millionaires are also expanding on their interest in travel and entering the world of private aviation.  A Wealth-X Spotlight on Private Jet Owners finds younger wealthy are more interested in owning very light and large private jets.  

Very light jets are typically the entry point for first-time plane owners. As one accumulates more wealth, they tend to buy larger planes. Some millennials (especially those with inherited wealth) go straight for the large jets if they can afford one.  

Philanthropy is important but comes lower down the list than for older VHNW individuals. 

Millennial Millionaires are likely to be focusing on their careers at this stage of their Lives. As their net worth rises with their age, and they choose to spend a greater proportion of time on more personal and emotive ambitions — such as creating a legacy and giving back to society — we find this interest tends to increase in popularity. 

Causes Millennials Care About 

Millennial millionaires are generous donors. According to a Wealth Engine report, 56% have donated to charities. This number is higher compared to the 35% of non-wealthy millennials who donate to causes.  

This growing populations is more likely to make significant donations to charity now, rather than waiting to accumulate more wealth. Some of the causes wealthy millennials care about include:  

• Education 
• Civil rights/racial discrimination  
• Employment/job creation 
• Healthcare reform  

• Climate change 
• Immigration  
• Wages 
• Poverty and homelessness 
• Mental health and social services 

• Women’s rights 
• Criminal justice reform 
• Early education 
• Sexual orientation-based rights 
• Literacy 

Wealthy millennials give to nonprofits that earn their trust by being transparent. For them, a sign of trust includes being informed as to how their contributions help make an impact. If they don’t know how their donations are being used to meet a need, 75% of millennials will stop giving.   

Besides making online monetary donations, millennial millionaires are more likely to be activists. Instead of using social media, millennials will participate in marches and contact their local representatives to bring about change. More than any other generation, wealthy millennials can put themselves into the shoes of others who are different from them.  

 Engage Millennial Millionaires Now  

While millennials make up the smallest segment of very-high and ultra-high-net-worth individuals, they should not be overlooked. Millennials will become the largest proportion of the wealthy, and their interests, the causes they care about, and their giving practices should not be overlooked. Businesses and nonprofit organizations who want to succeed must build relationships with these individuals now.   

Connecting with millennial millionaires can be a challenge for any for-profit or nonprofit organization. Wealth Intelligence solutions like Wealth Engine can help by providing valuable insight and expertise in building relationships with the wealthy.  

WealthEngine’s proprietary WE Search wealth screening platform makes it possible for you to personalize your donor targeting strategy by using advanced data analytics from 60 sources to search 300 million profiles and 122 million households. WealthEngine compiles the insights gathered from this data into its user-friendly Wealth Signal™ feature—a visual indicator that displays a prospective donor’s income, real estate holdings, net worth, estimated giving capacity, donation history, and personal network. The Propensity to Give (P2G) score is a proprietary tool that indicates the individual’s propensity for general philanthropic giving. 

Using WealthEngine’s wealth screening tools allows you to pinpoint prospects most aligned with the values and mission of your charitable organization and most likely to be willing to support its endeavors. Learn how WealthEngine can help take your fundraising initiatives to the next level by requesting a free demo today. 

Successful nonprofits should constantly look for new funding opportunities.  In recent years, venture philanthropy, a high engagement form of investing in nonprofits, has been on the rise.

Experts have rated venture philanthropy as the “fifth most promising trend” globally (45%). Venture philanthropy “ranks the highest in the United States (53%), where it comes in second.”

What is Venture Philanthropy?

Venture philanthropy has gained in popularity as an increasing number of business leaders seek to be more socially responsible. The desire for positive change combined with the financial needs of nonprofits makes this funding a win-win.

Venture philanthropy utilizes the same process venture capitalism uses when looking for companies to fund. The difference is that instead of investing in a promising up-and-coming business, a venture philanthropist invests in nonprofit organizations. In venture philanthropy, the investor focuses on maximizing social impact, helping charities to scale and make the most of their funding.

Instead of investing in institutions that promise personal financial rewards, philanthropists fund charities based on their potential to favorably impact the world. These funds come in the form of grants or start-up funding.  Venture philanthropy is typically practiced by large charitable foundations or venture philanthropy organizations.

Examples of venture philanthropy charitable foundations include:

• The Robin Hood Foundation
• The Cystic Fibrosis Foundation
• Tipping Point Community

Some venture philanthropy business organizations include:

•  The Asian Venture Philanthropy Network
• The Social Ventures Australia
• The European Venture Philanthropist Association

A philanthropic organization or philanthropist will research and vet the charities they choose to fund based on certain criteria. The Cystic Fibrosis Foundation, for example, has financially contributed to start-up medical research companies to develop, test, and market treatments. The Robin Hood Foundation funds charities in New York devoted to assisting low-income New Yorkers.

Source

The Venture Philanthropy Environment in Silicon Valley

Its historic concentration of innovative, high-tech start-ups has made Silicon Valley a long-time leader in securing funding from investors and venture capitalism firms. Entrepreneurs in this area are more likely to donate funds, time, resources, and expertise to charities. These self-proclaimed philanthropists embrace a strong commitment to giving back and are empathetic to the fundraising challenges nonprofits face.

Corporate backers of start-ups also have a powerful presence in Silicon Valley. With a number of these innovative companies led by socially conscious founders, many large organizations have been extremely receptive to venture philanthropy.

Silicon Valley philanthropists bring their start-up mindsets to their approach to venture philanthropy and are most likely to support nonprofits that meet the following criteria:

• Similar to start-ups and founded on big ideas and an impactful mission
• Replicable and scalable
• Advance fresh problem-solving strategies employing innovation to address ongoing issues

Source

• Silicon Valley Philanthropic Trends

Below are two Silicon Valley “giving code” philanthropic trends that nonprofits should watch to get tech leader funding:

1. Silicon Valley tech leaders and entrepreneurs want to be “bigger, better, and faster” in their giving, contributing large gifts to the causes they care about.
2. Tech entrepreneurs are more skeptical of nonprofits. These donors are interested in making an impact, and won’t donate to just any charity.

The Role of Organizations in Philanthropic Endeavors

In venture philanthropy, investors and organizations do more than just give financially to a charity. Venture philanthropists also come alongside the nonprofit, providing additional services to help it operate effectively and quickly get off the ground. Once a nonprofit is running efficiently, it will be successful and able to make a greater impact.

Nonprofits acknowledge the need for operational support that enables them to make donations go farther, increasing the potential for generating significant change. Here are some ways investor organizations can be involved in equipping nonprofits with the resources needed to achieve the greatest impact:

• Funding: Organizations give financially to charities. Unlike typical funds and grants, nonprofits have greater free reign in reporting and meeting requirements.  While venture philanthropists give charities more autonomy in deciding how to allocate funds, in turn, they expect their donations and support to have maximum impact.
• Marketing: Big business organizations have in-house marketing and advertising experts who can support nonprofit marketing teams. They can also serve as a charity’s outsourced marketing department.
• Leadership and Management: A leader who has support, is well-trained, and receives continual mentoring will thrive. Well-managed nonprofits are better equipped to achieve their mission and have a significant social impact. To ensure the nonprofit’s success, investors may fill executive and board positions with their own business experts.

Source

The Future of Venture Philanthropy

Venture philanthropy has proven to be a promising nonprofit fundraising source. But will it stick around? While there is growing support for social change within the business community, it may become more difficult to obtain venture philanthropy funds. This is in large part due to many start-ups and venture capitalists looking outside Silicon Valley.

Remote working and high costs have taken a toll on venture capitalism in the area. Many businesses and venture capitalists have left Silicon Valley for less-expensive cities like Los Angeles, Seattle, Boston, Miami, and Austin. PitchBook predicts that in 2021, the count of Silicon Valley venture capital businesses will fall below 20% for the first time in history.

Does this mean venture philanthropy is likely a short-lived fad? Not necessarily.

Venture philanthropists are interested in collaborating with nonprofits and helping them achieve their desired results. Donors want an interactive relationship with their chosen charity rather than a transactional one. As business leaders, there is an increased desire to be socially responsible and make a positive, lasting impact.

The emotional connection to making lasting change has grown in the last 10 to 15 years. This is good news for smaller nonprofits in need of funding.

Source

Venture philanthropy will continue to be an increasingly popular fundraising option for nonprofits due to the growing acceptance of social responsibility.  This method brings lasting change that benefits both the investor and the recipient charity.  When it’s time to start your research to identify potential Venture Philanthropists, wealth intelligence and relationship capital tools can help make the difference in securing the financial and organizational support needed to make a difference for your beneficiaries.

How can wealth intelligence and relationship capital platforms support my outreach?

Giving Capacity WealthEngine’s WeathScore™ provides a new dimension in wealth analytics, targeted fundraising and prospecting. The WealthScore™ is built upon WealthEngine’s Propensity to Give Score and Wealth Ratings, in order to combine the best parts of both worlds. The score incorporates traditional wealth and asset information while also adding additional key data points from the profile to provide a more complete picture when trying to identify a Venture Philanthropist with the right giving capacity. It even considers the strength and predictive value of specific data source matches, like a tie to a family foundation, as a way to identify potential major donors and clients.

Building Archetypes Leverage the Wealth-X Professional platform to build ideal archetypes that identify potential Venture Philanthropist partnerships and gather powerful insights into how to engage with the right wealthy prospects. Advanced Search filters allow you to refine your research and target prospects based on key outreach success indicators such as interests, passions and hobbies, historical philanthropic donation information and key geographical information.

Leveraging your Network BoardEx helps you unlock the best relationship paths to the people you would like to reach. Leverage BoardEx’s proprietary relationship mapping tools to identify existing relationships that can connect you to your potential donor. Once you have identified a Venture Philanthropist you’d like to engage with, BoardEx data provides a detailed look at their professional background to help support your approach. For example, knowing any historic philanthropic board seats they may have held can help indicate their affiliation to your particular cause.

Support for social justice nonprofits has been growing in recent years. This is due to conversations sparked by current events and generational shifts in attitudes. Studies suggest this increased interest is here to stay, which is good news for organizations dedicated to achieving lasting systemic change.

This guide takes a look at current top giving trends for social justice causes and explores what the donor landscape might look like in the future. This article also covers six data-driven methods for attracting new donors to your nonprofit. Even if you’re a small organization with limited resources, focused action can radically impact your fundraising efforts.

Top Giving Trends for Social Justice Issues

Following the senseless murders of Breonna Taylor, George Floyd, and other Black Americans, there has been a significant increase and sustained awareness of and passion for social justice issues. Organizations across the United States saw a dramatic increase in donations throughout 2020 and into 2021. This was especially true for grassroots nonprofits and crowdfunding campaigns, with both receiving record amounts of gifts.

While donations poured in for national organizations like Black Lives Matter, awareness also grew for local nonprofits such as Reclaim the Block and Black Visions Collective. Together, these two organizations received a combined $30 million in gifts as of June 2020.

The Minnesota Freedom Fund received an additional $30 million in donations, which is 300 times its annual budget. Meanwhile, the GoFundMe established for George Floyd received the most donations in the platform’s history. The fundraiser for the family of Breonna Taylor has raised over $6 million.

Calls demanding social justice reform have spanned across multiple generations. However, it is worth noting the impact of this movement has inspired younger generations to passionately advocate for the advancement of this cause in the form of ongoing efforts to support race-based causes and nonprofits dedicated to social justice.

A decade-long study conducted by the Case Foundation found civil rights and discrimination were among the top causes Millennials in the United States care about. Younger Americans also prioritize these concerns. Data collected by the Pew Research Institute shows that Generation Z and Millennials have similar viewpoints when it comes to racial issues.

8 Ways to Leverage Trends to Increase Donations

If your organization focuses on social justice issues, there are several ways to increase donations by leveraging trends in donor behavior.

1. Target Young Donors With an Annual Giving Campaign

Meet Generation Z and Millennials where they’re at financially. This is easily done by asking them for small gifts during your annual fund campaign. This type of fundraiser is vital because it keeps donors engaged from year to year while generating unrestricted dollars that help you achieve your core mission.

Over time, donors who contribute to your annual fund year in and year out will deepen their connection with your organization. Long-term nurturing builds trust between you and your supporters. This increases the likelihood they’ll contribute a major gift once they’re financially able.

If you don’t yet have many younger donors in your database, consider investing in a tool that searches for prospects by demographics. WealthEngine, a software platform for researching prospective donors, comes equipped with such a feature. It pulls data from 60 sources to analyze 300 million individuals.

Source

WealthEngine then creates ultra-targeted audience lists using the parameters of your choice. Filter by age, income, organizations, and causes they already donate to, and more. The software also provides up-to-date contact information for every individual on the list, so you can reach out to prospects with ease.

2. Focus Your Digital Marketing Strategy

No doubt you know the value of having an informative website for your nonprofit. An active online presence helps build trust between you and potential donors. It also facilitates communication between you and your community.

However, the number of potential digital marketing channels can often feel overwhelming, especially for smaller organizations. Are you really expected to have a website, email list, Facebook page, and keep up with the multitude of other social media platforms including Instagram, LinkedIn, Twitter, and TikTok?

Fortunately, recent data shows how you can focus your efforts for maximum impact. Abila, a fundraising software company, conducted a donor engagement survey that found younger generations prefer to donate online. The research also shows Millennials like brief forms of communication such as short emails or texts.

Source

These findings emphasize the necessity of maintaining a website that is easy to navigate and a donation page that is user-friendly. You should also plan to send weekly or biweekly emails updating supporters about the organization’s projects.

As for social media, small organizations with limited time should think strategically about who they want to reach. For example, if you already have a sizable Boomer donor base but want to attract more Millennials, consider focusing your outreach on Instagram, where Millennials are the largest group of users.

3. Tell Donors Exactly How Gifts Help

Transparency is vital for building trust between your organization and its supporters. One way to achieve this is to show donors what you can achieve with their dollars.

An abundance of research has found that maintaining a policy of transparency is essential for retaining your donor base. A Case Foundation study found that three-quarters of millennials would stop giving to an institution if it wasn’t clear how their contributions make an impact.

The solution is simple. Consider this example from the Network for Social Justice, an organization seeking to increase equity in Winchester, Massachusetts, and beyond. Their donation page includes a graphic describing the impact certain gift amounts can have.

Source

A graphic like this shows supporters how even the smallest gifts can make an immediate difference. It also gives people a better idea about what your organization does on a daily basis.

4. Offer a Membership Program

A nonprofit membership program incentivizes giving while also increasing engagement among donors. Benefits of being a member may include receiving gifts or attending events not available to non-members.

Membership programs are common among museums and other cultural organizations. For example, check out the National Museum of African American History and Culture:

Source

Even the smallest gift amount—$25 dollars—gives donors a 10% discount at all Smithsonian gift stores. Meanwhile, the largest gift amounts come with perks like a members-only breakfast with a museum curator.

Aside from creating a steady, recurring stream of funds for your organization, this also keeps supporters involved throughout the year. That way, when it’s time to renew their membership, they’ve already been sufficiently nurtured and have no problem recommitting their support.

This guide from WealthEngine goes into more detail about membership program strategies. One of the most crucial techniques is to conduct regular surveys asking members why they chose to renew their support or leave the program. This will help you refine your incentives and increase retention.

5. Encourage Growth Through Word-of-Mouth Marketing

Word-of-mouth marketing can’t be underestimated. Consumer brands know this well. Referrals from friends and family drive an estimated $6 trillion annually.

This marketing strategy is just as powerful for nonprofits. The Case Foundation study found that Millennials were more likely to get involved in an organization if their peers recommended it.

Many social justice groups experienced this firsthand in the wake of George Floyd’s death. Before national media outlets featured them, support for Minneapolis organizations like Reclaim the Block grew through social media networks.

There are several ways to encourage these kinds of referrals. The first is to simply ask. In a follow-up email thanking a supporter for their donation, write a line or two requesting they tell a friend about your organization.

It’s possible to automate this process for your donors, too. Many online donation platforms, such as JustGiving, automatically prompt users to share a campaign on social media after they make a gift.

Source

Another low-tech method is to put a button at the bottom of your e-newsletter encouraging subscribers to forward the email to a friend. The key is to make the action effortless for donors.

6. Plan Ahead for Year-End Giving

Nearly one-third of all giving happens during December. Not only that, but 12% of giving occurs in the last three days of the year. However, this doesn’t mean you can put off planning for the holiday season. More than half of all nonprofits start prepping for year-end giving as early as October.

Having this head start lets you remind donors a few times about holiday season gifts. You can also leverage Giving Tuesday in November to build momentum. For help designing a year-end giving campaign, take a look at this guide.

7. Connect With High-Quality Leads

High-quality leads are potential donors who have an interest in your cause, the means to donate, and a history of participation with similar organizations. In addition to making donations to your nonprofit, they may also be vocal supporters who attract more people through word-of-mouth.

However, finding and attracting these leads can be challenging. A tool like the BoardEx Diversity Network can help. BoardEx tracks senior leaders and decision makers across the globe who are part of 2,600 ethnicity-based membership associations. That’s over 18,000 executives, board members and senior managers who are or have been active in efforts to champion diversity and social justice causes.

As for getting in touch with these leads, forget about cold calling. Through BoardEx’s relationship mapping tool, you can see exactly how you’re already connected to these business leaders. Using your existing contacts and relationships, setting up warm introductions is simple.

BoardEx can also help diversify the executive team or board of your nonprofit. By selecting leaders who are already involved in ethnicity-based organizations, you gain access to their network of potential donors. BoardEx includes profiles of more than 1.5 million people across more than 2 million different organizations.

8. Nurture Planned Giving

Planned giving is a gift made during a donor’s lifetime or after their death. This is usually a large gift or portion of an estate given to a cause with which the donor had developed a long-standing relationship. Combine this with the fact that people usually begin thinking about planned giving when they near retirement age, and you’ll see that nurturing these prospects is a long-term endeavor.

The first step is to create a profile of your ideal planned giving donor. If you’ve received planned gifts before, you can use those supporters to create a look-alike model with WealthEngine.

Source

Look-alike modeling uses characteristics of your current donors to search for prospects with similar traits. Even if your database has spotty data, WealthEngine can draw on its sources to fill in the gaps.

Once you have a list of prospects, make it a priority to schedule one-on-one interactions with them. Annual events like galas are great for cultivating these sorts of relationships. For a comprehensive look at how to nurture planned giving donors, check out this guide.

If developing this process seems overwhelming, it’s helpful to remember that things you already do are likely nurturing planned giving. Even your youngest donors may be future planned giving candidates, which is why retaining them is essential.

The greatest wealth transfer in history is currently happening, with Baby Boomers and older Americans giving $30 trillion to their children, many of whom are Millennials. At the same time, Generation Z—the best education generation —is graduating college and entering the workforce.

Final Thoughts: The Right Data and Tools Pave the Way Forward

Don’t expect gifts for social justice issues to taper off any time soon. While events in 2020 and 2021 have galvanized support for diversity and race-based organizations, studies show there is long-term interest in these causes. Millennials and Generation Z are committed to supporting social justice nonprofits and are gaining access to wealth that makes their donations possible.

To attract this donor cohort, focus on making online donations easy and sending short, regular emails. Keeping younger supporters apprised of your organization’s activities is crucial for retaining their support.

You also need to develop a plan for nurturing planned giving donors. Gifts made at the end of life often depend on a long-term relationship with the donor.

WealthEngine makes it possible to attract more donations, no matter the size of your organization. Its prospect research tool simplifies the process of finding new supporters, whether they’re in Generation Z or nearing retirement.

To see how WealthEngine can help your social justice organization, get in touch for a free demo.