Minnesota nonprofits ditch the annual gala to appeal to younger generation of givers

More Minnesota nonprofits are targeting younger donors as millennial giving increases nationally, surpassing Gen X for the first time as the second most generous generation.

While baby boomers still give the most money — nearly double what millennials and Gen X gives — Minnesota nonprofits are trying new tactics to tap into more millennial and Gen Z donors, especially as the largest transfer of generational wealth begins.

"We try to take a different approach," said Lauren Kramer, donor relations officer at the Native Governance Center and a millennial herself. "We're looking at content that appeals to Gen Z and millennials."

The nonprofit, which serves Indigenous leaders in Minnesota, South Dakota and North Dakota, skips a typical annual fundraiser and focuses instead on Instagram and TikTok videos and themed social media campaigns throughout the year to build visibility and draw new donors.

Telehealth clinic Just the Pill also skirts the traditional gala model, focusing on grassroots efforts — from social media campaigns to a fundraiser at a Minneapolis brewery last week, part of a growing trend of tapping into the state's brewery scene.

And in Minneapolis, affordable housing developer Urban Homeworks is trying new strategies to reach younger, more diverse donors, hosting a trivia night at a brewery for the first time this month and retooling its annual fundraiser to be more interactive than the typical dinner with a formal presentation.

"We've been working to make that event more appealing to younger donors ... to make it more like a party," said Paul Vliem, Urban Homeworks' development director.

The October event includes a private concert by a hip-hop artist and an improv comedy show, making it more of an experience, which younger donors value more than just writing a check, he said. That event and the trivia night help draw potential new donors who may not know anything about the organization, but learn more about its mission casually, not in a high-pressure fundraising environment, Vliem added.

"One of our goals just for stability is to create a more grassroots group of donors," he said. "We need to have a larger pipeline of individuals."

Tapping new donors

In a new report released earlier this year, millennials — adults in their 20s, 30s and 40s who were born between 1981 and 1996 — boosted their philanthropy significantly, giving an average of 40% more than in 2016. Millennials also volunteered the most of any generation.

Baby boomers and Gen X donors on average decreased their household giving from 2016 to 2022, according to a report by Giving USA and Dunham+Company.

In Minnesota, an estimated $48 billion is expected to pass from baby boomers to younger generations. Besides just engaging the next generation of philanthropists, many Minnesota nonprofits also urgently need new donors as they face increasingly dire finances.

In a new survey by the Minnesota Council of Nonprofits released this month, more nonprofits reported that they're boosting fundraising to offset rising costs and declining revenue.

After a spike in money from foundations, the federal government and donors at the start of the pandemic in 2020, many foundation grants have flatlined, extra federal aid has ended and donations have waned. Nationally, total giving declined in 2022 for only the fourth time in four decades, likely because of stagnant incomes, rising inflation and decreases in the stock market, according to a separate Giving USA report.

Before the pandemic, nonprofits were looking for ways to reinvent the typical black tie gala to combat "gala fatigue" and reach new donors. Galas aren't as relevant to many millennials who want more hands-on philanthropy, whether it's being intentional about where money goes, volunteering or being social media ambassadors promoting an organization online, said Sara Lueben, director of collective giving at the Minneapolis Foundation.

She works with Fourth Generation, a giving circle with about 35 members — mostly millennials — who pool their money to give grants and learn from experts about key issues.

"Millennials in particular ... are really about seeing an issue and getting involved and making an impact," Lueben said. "They're always looking for ways to engage beyond the dollars."

Giving circles are increasingly popular, she said, allowing younger generations who have less money than older generations to magnify their philanthropy and create a community of like-minded peers. Fourth Generation members, for instance, meet monthly and gave out $80,000 in grants collectively last year.

Kelsey Tyler, 30, of St. Anthony is one of the members. She's upped her donations to charities over the years as her wages have increased and she's gotten more involved with the community.

The increase in millennial giving nationally isn't surprising given that the generation is getting older and generally making more money. But the generation never recovered financially from the Great Recession in 2007-2009. Millennials have experienced slower economic growth since entering the workforce than any generation in U.S. history and their earnings never fully rebounded after the recession, according to a Washington Post analysis.

Tyler sees that uneven impact among her millennial friends — some of whom aren't able to donate as much or at all because of stagnant wages or student loan repayments.

"The millennials who are doing well are doing well. But there's a split," she said.

Reaching donors online

In the Giving USA report, a higher percentage of millennials donated online than any other generation, including Gen Z.

At the Native Governance Center, social media videos and campaigns have helped the organization reach new supporters and even helped draw a $50,000 gift from a millennial donor, Kramer said.

The videos are lighthearted, fun ways to talk about serious issues — from streaming with Indigenous gamers to mimicking a popular hot wings show where Indigenous leaders answer questions while sampling chicken wings.

"We really want to reach people where they're consuming information," Kramer said. "That's been a great way to reach folks who maybe aren't thought of in traditional fundraising campaigns."

At Urban Homeworks, about 20% of its revenue comes from donors, most of whom are suburban, white and older, Vliem said. The organization has tried to diversify its donor base to ensure it reflects the communities the nonprofit serves. And as larger donors decrease their giving, Vliem said the nonprofit needs to grow revenue in other ways.

The trivia night drew about 100 guests and only brought in about $1,000, but didn't cost Urban Homeworks much to put on and was an "acquisition" event to connect with potential new donors or volunteers, he added.

Just the Pill, which provides abortion medications by mail, has always focused on grassroots giving — from social media campaigns to online donations — since foundation grants can be sporadic, said Meg Sasse Stern, its outreach and operations coordinator.

Those efforts are easy ways to engage younger generations who could be future donors, patients or volunteers, she said, adding: "There's a shift in how we engage with philanthropy."