Tech-savvy millennials are transforming philanthropy
Dale Pfeifer remembers logging on to Facebook nearly 10 years ago, when it was still in its infancy, and reading a post about a friend’s charity that provides health and educational services to women in Afghanistan. She was inspired and wanted to donate, but could not find a quick way to do that.
“I was like, ‘We should be able to just donate right here,’” she says. “So I started thinking about it and what I realized is, just like the Internet had a new wave of payment options — such as PayPal and others — what if we could put a whole new payment infrastructure on social media, so that every time a payment was made, something good would happen in the world? Social payment would equal social good.”
In 2014 the New Zealand native launched Goodworld, which allows people to donate to about 3,000 nonprofit organizations on Twitter and Facebook using the hashtag #donate. After signing up, users can simply type #donate and an amount into a Facebook comment or a Twitter RT or @reply. During the first 20 months of its beta launch, Goodworld has helped raise more than $5 million. The average donation is about $31 and the most active users are millennials.
“One of the things we really wanted to do is bring donations to millennials and people who have otherwise really been excluded,” says Pfeifer, who has received several honors, including being named one of Washington Business Journal’s “40 Under 40” business leaders. “The big issue that we’ve been focused on is turning slacktivism into activism — how to turn someone sharing something or adding a comment into taking meaningful action. We’re very determined that every payment should result in a positive action somewhere around the world.”
“Being mobile-friendly is no longer optional for nonprofits.”
— Charitable Giving Report (2017), Blackbaud Institute for Philanthropic Impact
The term “millennial” typically refers to those born between 1980 and 2000, but demographers use a range anywhere from the early 1980s up to the early 2000s. In just three years, millennials will make up half of the American workforce, and in less than 15 years, they are expected to outnumber non-millennials.
Millennials — also known as Generation Y — are a large and powerful demographic, the first to grow up in the age of cell phones and social media. They are used to harnessing the power of technology to make their lives easier and achieve their goals. With a few taps on their phones and iPads, they are donating to causes they care about, even if it’s just a dollar here or a dollar there. They are embracing tools that make giving frictionless, and relying on their online networks to amplify their impact.
Goodworld is only one example of how philanthropy now happens almost effortlessly. A growing number of apps, websites, and tools are making it easy, and often fun, to support nonprofit organizations.
Take Spotfund, an app relying on the power of storytelling that can be used to donate as little as $1 to more than 400 causes. Users post news articles or write about their favorite causes, whether it be protecting African elephants, supporting the Universal Hip Hop Museum, or contributing to large organizations such as the Bill & Melinda Gates Foundation. Spotfund, like Goodworld, encourages participants to get their contacts to donate. Nearly half the users are ages 25 to 34, says Mike Marian, who founded the company in 2015 along with his two Manhattan roommates and fellow millennials.
“If you have 1,000 Facebook followers — which pretty much most people under the age of 30 will have — and you donate $1 and share that to your network, and 10 percent of your friends match your donation, that’s now $101 that you have either given or inspired others to give to your cause,” Marian says. “It’s not about the size of your wallet, it’s about the power of your social network. We wanted an impulsive way for people to impact their world, to support their favorite causes and important nonprofits, whether it’s something tied to a news program or an incident they see, or they woke up one day and said, ‘Something happened to me and I want to support that cause and give a couple of bucks to make a difference.’”
Spotfund’s users have donated more than $50,000 to date. The most successful campaign followed Hurricane Harvey, when a user collected more than $11,000 for a local United Way chapter after sharing a video and a story about the devastation in her hometown of Orange, Texas. The average Spotfund donation is just under $23, but Marian says that figure is actually skewed by some of the larger donations to Harvey relief; many users donate less. Companies like Spotfund and Goodworld take a fee — usually around 5 percent of the donations — to cover their costs.
Big tech companies are also recognizing the power of microgiving. Google’s One Today app encourages people to give as little as $1 to various causes: for example, a recently featured project requests a $1 donation to World Vision to help a child access clean water for three months. Some apps ask for even less, such as the United Nations World Food Programme’s Share the Meal, which will feed one child for a day for every 50-cent donation.
There are some concerns about microgiving. One question is whether donating a little at a time prevents people from making a single larger and more impactful donation. And as with everything that spreads online, the most popular causes may not be the most urgent ones. Some experts in philanthropy point out that microgiving may be popular among millennials because they do not yet have the kind of disposable income that older generations have. But they agree that the more ways to give, and the more people involved, the better.
Technology has also made it easier to turn all kinds of skills, talents, and hobbies into charitable dollars. Johnson & Johnson’s Donate a Photo app converts every photo received into $1 for the participant’s chosen cause; more than 2.6 million photos have been collected. Charity Miles aims to turn movement like walking, running, or biking into purpose; miles clocked and donated through the app have brought in more than $2.5 million. And there are many apps that allow users to round up their purchases to the nearest dollar and donate the change.
Cody Switzer, business director at the Chronicle of Philanthropy, says the growing menu of options makes it easier for people without deep pockets to become philanthropic. “It’s gone from giving through your house of worship, or the United Way, or local charity, or through the mail, or at an event, to having these really global options of giving online, where you can, even for a small amount of money, give to any organization in a way that has not been available for lower-amount donors,” he says. “In the last few years there’s been a proliferation of apps that try to remove any friction from giving: apps that allow you to keep credit card info, remind you to give, or in some cases, apps that allow you to round up your most recent purchases and give change to charity. All of these individual acts may not be new, but the way they have spread to so many causes and types of organizations is. And so is the ease at which you can do this as a donor from your smartphone. The donor’s information is already saved and there’s no need to write a check. There are all these opportunities to give, wherever you are.”
Millennials have also helped propel the popularity of themed giving days, such as #GivingTuesday, the social-media fueled movement that encourages people to donate to causes on the Tuesday after Thanksgiving. Another increasingly popular way of giving is through crowdfunding sites like GoFundMe, Kickstarter, YouCaring, and Indiegogo, where people collect money for everything from their own cancer treatments to the latest innovation they are trying to bring to market. A giver can search through thousands of nonprofit and for-profit causes on these sites, but they all have a common thread: they rely on storytelling and online networks to generate money.
“In past generations, most people thought you supported an organization by donating, but we’ve seen a shift where millennials are giving and volunteering, but also advocating.”
— Una Osili, Associate Dean for Research and International Programs, Indiana University Lilly Family School of Philanthropy
Henry Timms, executive director of 92nd Street Y cultural and community center in New York and the founder of #GivingTuesday, says technology has helped make philanthropy frictionless and more communal.
“If you think about the ‘old school’ giver, he gets a lot of letters from different nonprofits at the end of the year and he keeps all the letters in a drawer in a desk in his parlor,” Timms explains. “And then he signs them, one by one. He’s on his own, he’s not really involved with anyone else, it’s just him and the organization. Contrast that user experience with someone whose best friend contacted him online and said, ‘There is a cause that’s deeply important to me and we have 24 hours to raise $100,000 and I want you to help me be a part of that cause.’ Think about that difference.”
Online giving grew by 7.9 percent in 2016 compared to the previous year, according to Blackbaud’s most recent report on charitable giving. Seventeen percent of online transactions were made on a mobile device, an increase of 21 percent from the previous year. The report points out: “Being mobile-friendly is no longer optional for nonprofits.”
The report — which counts those born between 1981 and 1997 as millennials — says this demographic makes up more than 30 percent of the U.S. population, but accounted for only 5.4 percent of giving in 2016, the lowest of five generations. Experts predict it will likely take decades to measure millennials’ full philanthropic impact.
Millennials understand that donating money is not the only way to make a difference. When it comes to causes they care about, they also exert influence as employees, consumers, and voters.
“You can actually achieve greater impact by looking at all the tools you have at your disposal, and that’s what they’ve done, in all areas of their lives,” says Eileen Heisman, president and CEO of the National Philanthropic Trust, a donor-advised fund.
Una Osili, professor of economics and associate dean for research and international programs at the Indiana University Lilly Family School of Philanthropy, agrees. She points out that millennials view philanthropic support in broad terms.
“In past generations, most people thought you supported an organization by donating,” Osili says, “but we’ve seen a shift where millennials are giving and volunteering, but also advocating. There is also this idea that how you solve a problem involves multiple strategies. For climate change, for example, it may not just be enough to donate. You may also want to help raise awareness in the community so individuals can take actions that are more sustainable. There is also a sense that millennials have grown up in an era where there is perhaps less trust in institutions, so there is the idea that individuals need to get involved and take actions themselves.”
The annual Millennial Impact Report found 84 percent of millennials made charitable donations in 2014, and 70 percent said they spent at least an hour volunteering. And a study by Cone Communications found that 64 percent of millennials consider a company’s social and environmental commitments when deciding where to work. The same percentage said they would not work for an employer that does not have strong corporate social responsibility values. Millennials often embrace companies built on socially conscious business models, such as Warby Parker, which distributes a pair of eyeglasses to someone in need for every pair sold.
Philanthropy may be about money, but millennials understand that it is first and foremost about making a difference and influencing change. As Jason Lee of the Association of Fundraising Professionals puts it, “Newer generations of donors view themselves as change agents who do not simply want to passively give charitable contributions.” Evolving technology ensures that this power to make good stuff happen is already in their hands.