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Tailoring philanthropic strategies to new generational cohorts

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Tailoring philanthropic strategies to new generational cohorts

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Content Running Head: TAILORING PHILANTHROPIC STRATEGIES 1

Tailoring Philanthropic Strategies to New Generational Cohorts
USC Sol Price School of Public Policy
Tina Pakfar

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Table of Contents
Introduction………………………………………………………………………………………..5
Giving Pattern Shifts………………………………………………………………………7
Four Generational Cohorts………………………………………………………...7
Traditionalists.…………………………………………………………….7
Baby Boomers……………………………………………………………..8
Generation X…..…………………………………………………………..9
Millenials………………………………………………………………...10
Donor Engagement Strategies for the Next Generation…………………………………11
A Change in Philanthropic Communication Channels: Social Media…………………..12
A Change in Philanthropic Events: Socializing Before Fundraising……………………14
A Change in Philanthropic Giving: Giving Circles – A ―Social‖ Strategy……………...15
Giving Circle Typologies………………………………………………………..16
Linking Giving Circles to the Next Generation ………………………………………...18
Research Questions and Motivation…………………………………………………….19
Methods…………………………………………………………………………………………19
Data Collection………………………………………………………………………….20
Interviews with Nonprofit Professionals………………………………………………..21
Interviews with Giving Circle Representatives…………………………………………22
Findings…………………………………………………………………………………………24
Interview Results from Nonprofit Representatives……………………………………..24
Social Media…………………………………………………………………….25
Events…………………………………………………………………………...26
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Staff Generational Component………………………………………………….27
Interview Results from Giving Circle Representatives…………………………………29
Recruitment……………………………………………………………………..30
Activities Characteristic of Members…………………………………………..30
Social Meetings…………………………………………………………………31
Next Generation Members……………………………………………………...32
Discussion………………………………………………………………………………………33
Nonprofit Respondents…………………………………………………………………33
Nonprofit Respondents: Social Media………………………………………………….34
Nonprofit Respondents: Events………………………………………………………...35
Nonprofit Respondents: Giving Circles………………………………………………..36
GC Respondents………………………………………………………………………..36
GC Respondents: Recruitment and Engagement………………………………………37
GC Respondents: Engagement through Social Aspects of Meetings ………………….39
GC Respondents: Events……………………………………………………………….40
GC Respondents: Next Generation Strategies…………………………………………40
Next Generation: Reduced Membership Rates / Sponsorship…………………41
Next Generation: Targeted Events……………………………………………..41
Next Generation: Social Media………………………………………………...41
Conclusions and Recommendations…………………………………………………………...42
Further Research……………………………………………………………….………………47
References……………………………………………………………………………………...48
Giving Circle Interview Questions……………………………………………………………..56
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Abstract
Demographic changes are currently altering the philanthropic landscape. The traditional
generations of donors are aging and, as a consequence, development professionals will
have to reach out to the next generation of possible donors. The Next Generation,
comprised of individuals born between 1965 and 1980, referred to as Generation X, and
individuals born between 1981 and 2000, referred to as Millennials (also known as
Generation Y), need to be approached in ways that differ from previous generations. For
example, the next generation seeks greater personal involvement in their endeavors. This
article explores the utility of nonprofit organizations creating internal giving circles to
better recruit and engage the Next Generation. The paper concludes by discussing the
social implications that make giving circles a viable tool for development professionals
seeking to create and maintain sustainable philanthropic models.

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Introduction
The philanthropic landscape is in the midst of dramatic changes. Donors to nonprofits
born between 1922 and 1944, the Traditionalist generation, are now between the ages of 69 to
91. The coming intergenerational transfer of wealth has already begun as the children of
Traditionalists, the Baby Boomer generation, composed of individuals born between 1945 and
1964, begin to inherit the wealth that has been amassed by their parents. The other two
generations are often grouped as the Next Generation. The Next Generation group, comprised of
individuals born between 1965 and 1980, referred to as Generation X, and individuals born
between 1981 and 2000, referred to as Millennials (also known as Generation Y), are reaching
the crucial age in which habits of philanthropy start to form and coalesce. Additionally, this
impending transfer of wealth is expected to affect many women as beneficiaries in part because
women statistically live longer than their spouses (CDC, 2004). Women‘s leadership roles in
philanthropy are also advancing as a result of larger numbers of women entering the work force
and holding high-level positions, thus creating their own wealth.
These three developments promise to deeply affect the field of donor development. The
aging of the traditional generations of donors to nonprofits is already precipitating dramatic
intergenerational transfers of wealth. For example, as the Traditional generations age, the Next
Generation, by default, becomes more prominent. Because of demographic shifts, this
generation will have to be the principal source of private donations over the coming decades.
There is a particular urgency in reaching out to these generations as soon as possible. Based on
research by Bhagat, Loeb, and Rovner (2010), regardless of the generation, lifelong giving
begins in the thirties, and the younger Generation X and Millennials are in the midst of reaching
that important threshold.
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In order to create sustainable, forward-looking models, development professionals need
to formulate strategies specifically targeted at the next generation of philanthropists. These
generations require different approaches than what has characterized the field in the past.
Research has demonstrated younger generations are practicing a significantly more sophisticated
philanthropy (Hamilton, 2004), as well as exhibiting preferences for new ways of information
sharing (Johnson Grossnickle and Associates & Achieve, 2011). In this project, I investigate if
and how nonprofit organizations engage the Next Generation of donors. In particular, I
investigate the experiences of nonprofit professionals with giving circles and the potential for
giving circles to cultivate new donors. GCs are a part of the growing trend toward donor
controlled philanthropy and it is estimated that there are between 1,600 to 2,000 U.S. giving
circles today—an increase of more than 800% since 2004 (Forum of Regional Associations of
Grantmakers, 2013).
In the next section, I discuss the literature on the four generations in philanthropy by
defining the generations and their basic values and philanthropic preferences. I will then discuss
literature on donor engagement strategies followed by a discussion on a growing trend in
philanthropy, Giving Circles. This is followed by a section on my methods for building a
framework for sustainable and responsive donor development for the next generation. After
describing my methods section, I will discuss my findings from interviews and conversations
with respondents from nonprofit organizations. Additionally, I will discuss my findings from
interviews and conversations with respondents from Giving Circles. I will end with conclusions,
recommendations, and suggestions for future research.

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Giving Pattern Shifts
In an attempt to understand how best to engage the next generation of philanthropists, it
is necessary to understand the philanthropy of prior generations, as well as look at today‘s
generational cohorts, and analyze their defining characteristics and traits. Cohort labels represent
individuals who have experienced similar external events based on the historical timeframe in
which they were born (Edmunds & Turner, 2005). Events experienced during the formative
rather than later years influence values, preferences, and beliefs which persist with individuals
throughout their life (D'Amato & Herzfeldt, 2008; Jurkiewicz & Brown, 1998; Schewe &
Meredith, 2004).
Four generational cohorts. I use the cohort model because it provides critical
information that can be used to tailor philanthropic strategies. Each cohort as donors brings a
particular set of values, skills, and life experiences to the philanthropic table. The Next
Generation, for example, needs to be understood in the context of prior generations; therefore,
awareness of donor preferences and motivations tied to their generational cohort is essential to
effectively engage and retain donors (Sargeant & Woodlife, 2007). In the following paragraphs I
describe the four major cohorts and their relation with philanthropy: Traditionalists, Baby
Boomers, Generation X, and Millennials.
Traditionalists. Traditionalists, also known as the World War II Generation, were born
between 1922 and 1945, as stated above. The economic and political uncertainty that they
experienced during the Great Depression led them to be hard working and financially
conservative. By the time this generation entered the workforce, the Great Depression and
World War II had ended, resulting in widespread economic prosperity. The middle class
emerged and while most families were able to thrive on a single income, many Traditionalists‘
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early financial hardships ruled their lifetime financial decision-making framework (Schewe &
Meredith, 2004). The majority of Traditionalist work environments were large bureaucratic top-
down organizations (Zemke, Raines, & Flipczak, 2000).
Traditionalists tend to be loyal, diligent, and compliant and have an enormous sense of
respect for hierarchy and authority (Kupperschmidt, 2000). Furthermore, the generational norm
was for Traditionalists to designate a portion their family‘s income to their chosen religion.
Many Traditionalists, motivated by religious beliefs and trust, made donations and were not
actively involved in determining how the donated funds would be spent (Powell & Steinberg,
2006). Traditionalists value recognition for their philanthropic activities and often give legacy
gifts to organizations as part of their estate planning (Davis, 2011).
Baby Boomers. Seventy-six million American children were born during the
demographic post-World War II baby boom (between 1945 and 1964). Considered the largest
living American generation, the Baby Boomers represent a cohort that is significant in its size
alone (Hayutin, Dietz, & Mitchell, 2010). Based on the size of the cohort and the impending
transfer of wealth, Baby Boomers‘ philanthropic inclinations will have a significant impact on
the future of philanthropy (Fixler, Eichberg, & Lorenz, 2003). The inclinations and orientations
of these individuals were shaped by the Civil Rights Movement, the Vietnam War, the
establishment of the Peace Corps by President John F. Kennedy, the sexual revolution, the
assassinations of both President John F. Kennedy and Martin Luther King, Jr., and Woodstock
(Smola & Sutton, 2002). Baby Boomers grew up in a time of dramatic social change: As
adolescents, they challenged the status quo in favor of optimistic ambition to change the world.
While financial prosperity is desired, Baby Boomers wish to make a significant
contribution to society and volunteerism is important. According to a recent American
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Association of Retired People (AARP) study, 50% of Americans over 50 years of age have plans
in place to volunteer (Bridgeland, Putnam, & Wofford, 2008). Baby Boomers are more involved
with their children than their aging parents and value time spent with their children and
grandchildren (Fingerman, Pillemer, Silverstein, & Suitor, 2012).
Generation X. Generation X defines individuals born between 1965 and 1980. AIDS,
the Internet, MTV, global competition, and handheld video games significantly shaped the
perceptions of Generation X (Kottasz, 2006; Smola & Sutton, 2002). This generation is
technologically savvy. In contrast to Baby Boomers, who, for the most part, grew up in two-
parent households, rising divorce rates resulted in ―latchkey kids‖ during this generation (Strauss
& Howe, 1991). Being left home alone a large portion of the time, these children became
increasingly reliant on friends (Kupperschmidt, 1998). Parents encouraged children of this
generation to voice their opinions. This encouragement resulted in these children feeling
comfortable expressing their point of view within group conversations (Weston, 2006).
The values associated as most important for GenXers are a sense of belonging, being part
of a team, autonomy, flexibility, learning, and entrepreneurism (Tulgan, 1995). Altering from
the traditional giving patterns modeled by their parents and grandparents, Generation X seeks
information about nonprofits before making gifts (Panepento, 2008). Some Generation Xers
who amassed wealth during the economic technology boom in the 1990s are practicing more
sophisticated philanthropy by funding social entrepreneurial ventures and choosing to treat
philanthropy as an investment (Cobb, 2002; Kramer, 2009). While some Generation Xers
benefitted financially during the tech boom, many of Generation X are paying off student loans
(O‘Shaughnessy, 2012) and credit card bills and are not in a position to make financial donations
to nonprofits (Panepento, 2008).
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Millennials. The Millennials, individuals born between 1981 and 2000, have grown up
communicating through technology. They are staying connected through social networking such
as Facebook, cell phones, text messaging, and email (Bernholz, Skloot & Varela, 2010). Similar
to the number of Baby Boomers, there are approximately 75 million Millennials; additionally,
Millennials are the first generation to come of age in this century (Davis, 2011).
Millennials have been described as giving ―to make the world a better place‖;
Millennials‘ philanthropy has been seen as highly altruistic in nature (Steinberg & Wilhelm,
2003). The Millennial Donors report found that Millennials are generous people who, while they
appreciate technological tools, prefer to make philanthropic decisions based on personal
connections rather than virtual ones and are most often motivated to give by a compelling
mission or cause. Trust is extremely important for Millennial donors and is factored into their
philanthropy. Nine out of ten Millennial donors surveyed said they would stop giving to an
organization if it for some reason lost their trust (Johnson Grossnickle and Associates &
Achieve, 2011).
Millennials value close relationships to the organizations they support. They prefer face-
to-face contact with organizations and their leaders, and they desire educational information
about organizations. They rely heavily on Internet search engines to gather information on
organizations. Once they learn about an organization, they want to understand the best way to
give and engage. As a requirement for high school graduation, most Millennials are expected to
complete mandatory community service or volunteer projects. As a result, volunteering is
important to this generation, more so than any other generation (Burns, Reid, Toncar, Anderson,
& Wells, 2008).
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Oftentimes, from an early age, they have been conditioned to view volunteering as a
positive way to connect with community, society, and the world and they have shared a desire to
volunteer in groups. This cohort, according to The Johnson Center for Philanthropy study
(2013), wants to get their hands dirty by getting involved with the nonprofits they support rather
than merely writing a check. They want to be involved in creating a greater impact and in
witnessing the impact their involvement created. They believe that greater donor impact can be
achieved through collaborations with peers (The Johnson Center, 2013).
Of the Millennials surveyed that belonged to a young professionals group, networking
and professional development were motivating factors for joining the group. Once involved in
the group, the majority of the respondents were willing to advocate for the cause, volunteer, and
organize educational events around the cause (Johnson Grossnickle and Associates & Achieve,
2011). Peer-to-peer relationships are a strong indicator of donor commitment and actions
(Johnson Grossnickle and Associates & Achieve, 2011).
Increasingly, the philanthropic literature is framed such that Generations X and Y are
grouped as the Next Generation. Similarities in the two cohorts have prompted philanthropic
professionals to propose that while longstanding strategies for Traditionalist and Boomers may
still be effective, the Next Generation requires a substantially different framework.
Donor Engagement Strategies for the Next Generation
Given this information, the question then is how to engage the Next Generation. The
Next Generation will benefit from the ongoing transfer of wealth between the generations.
Therefore, cultivating Next Generation donors is essential for nonprofit sustainability. As cited
by Andresen in her blog Katya‘s Nonprofit Marketing Blog (2013), Saratovsky and Feldmann
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summarize their book, Cause for Change: The Why and How of Nonprofit Millennial
Engagement (2013):
There‘s no silver bullet when developing your engagement strategy – we wish there was.
It will take time for your organization to change its current thinking and culture,
especially if your workforce like many includes all three generations in the workplace.
(Andreson, 2013).

There are a number of strategies in the literature that professionals use to engage the Next
Generation of philanthropists. I will present two Next Generation engagement strategies: social
media and events (Davis, 2011). Social media is important because organizations recognizing
the Next Generation‘s affinity to be digitally connected at all times are building strong social
media platforms. Additionally, many nonprofit organizations attempt to engage the Next
Generation by inviting them to events. Many nonprofits choose to engage the Next Generation
through invitations to events based on research findings that the Next Generation, especially the
Millennial Generation is highly social (Johnson Grossnickle and Associates & Achieve, 2011).
Giving Circles will also be discussed as a growing trend in donor-controlled philanthropy and as
a way for young donors to create impact through pooled funds (Davis, 2011). Two key
challenges and opportunities are communication channels and events where potential donors
interact and engage.
A Change in Philanthropic Communication Channels: Social Media
Development professionals predict that the philanthropic preferences of the Next
Generation may be quite different from that of past generations (Kunreuther, Kim, & Rodriguez,
2009). Previous nonprofit philanthropic fundraising practices were structured as a continuous
multigenerational approach to fundraising. An example of a traditional model of philanthropy is
the use of direct mail. Direct mail solicitations were and are the staple of many successful
annual giving programs for nonprofit organizations. The three most common communication
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strategies used by nonprofit organizations to solicit and engage donors prior to the Internet were
direct mail, telemarketing, and canvassing (Shaiko, 1999).
Today, nonprofits communicate with prospective and current donors across many
channels (McCarthy, Darrouzet, Beebe, & Mielcarek, 2011). Direct mail still remains the most
effective way to solicit the Traditionalist generational cohort (Bhagat, Loeb, & Rovner, 2010).
Nonprofit organizations recognize the continued success of direct mail efforts aimed at
Traditionalists and Baby Boomers and therefore continue to solicit potential supporters through
direct mail (McCarthy, Darrouzet, Beebe & Mielcarek, 2011). Nonprofits, recognizing that the
Next Generation views direct mail as antiquated and environmentally incorrect, often solicit
Generation X and Millennials via e-solicitations (Panepento, 2008). Today‘s donor solicitations
can be more effectively communicated to the Next Generation through social media and social
networks, platforms that are more likely to appeal to Generation X and Millennials (Sargeant &
Woodliffe, 2007).
Internet usage by the Baby Boomer and Traditionalist cohorts is increasing. In 2005, one
quarter of all 70 to 75-year-olds utilized the Internet and 4 years later in 2009, the number almost
doubled to close to 50% (Jones & Fox, 2009). Creating strong donor engagement strategies that
take advantage of social media and the Internet are necessary to be competitive and proactive.
Additionally, it is necessary to review direct mail, telemarketing, and face-to-face meetings as
potential strategies. Many of the Next Generation are accustomed to communicating through the
Internet (Saratovsky & Feldmann, 2013). Mobile giving, viral video campaigns, and online
incentivized giving allow for a variety of ways that nonprofit organizations can interact and
engage with current and potential donors (Saratovsky & Feldmann, 2013).
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Individuals today are exposed to a plethora of funding options via the Internet. Platforms
such as Twitter can spread philanthropic messages quickly on a mass scale. However, despite
the arguments of some that social media will completely revolutionize philanthropy, there has
yet to be any conclusive evidence of its overall effectiveness (Bernholz, Skloot & Varela, 2010).
The Millennial Donors report found that Millennials prefer making donations through online
websites but they also give based on a personal request (Johnson Grossnickle and Associates &
Achieve, 2011).
While the Internet can make the logistics of philanthropy easier, it should not be regarded
as taking the place of relationship building, which still remains at the heart of the industry (Hart,
2006). Hart (2006) argued that the Internet is best used to supplement rather than replace
existing strategies for interaction that builds engagement. Properly implemented, the Internet
can provide more frequent communication with donors and, thus, opportunities for a more
meaningful dialogue between professionals and donors (Hart, 2006). Specifically, social media,
such as Facebook, can foster social networking relationships that further drive donor
relationships (Waters, Burnett, Lamm, & Lucas, 2009). As a result, donors are better able to
identify with their chosen causes (Havens & Schervish, 2001). Further, Reddick and
Panolmarlow (2012) found that Internet users in outside social groups make online donations are
a result of engagement through the group. Furthermore, those authors suggest that frequent
Internet use does not increase online donations but rather serves as functional vehicle for social
group interaction.
A Change in Philanthropic Events: Socializing Before Fundraising
Many nonprofits hold events to attract Next Generation prospects and donors. The
Millennial Donors report found that Millennials are highly social (Johnson Grossnickle and
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Associates & Achieve, 2011). The report also found that Millennial donors do not like attending
events with a fundraising component, such as silent auctions and raffles (Johnson Grossnickle
and Associates & Achieve, 2011). When factoring in additional nonprofit staff time needed to
put on an event and the failure to form sustained relationships with attendees, nonprofit
organizations are beginning to question the value of holding these events (Schwinn, 2007).
Saratovsky and Feldmann (2013) refer to event-based engagement as ―an episodic, short term
level of involvement‖ (p. 110). Researchers found that Millennials enjoy dinner parties
featuring entertainment, social cocktail parties with peers, and attending a small private event or
gathering (Johnson Grossnickle and Associates & Achieve, 2011). However, Saratovsky and
Feldmann (2013) find nonprofits‘ attempts to engage Millennials through social activities held at
bars ―demeaning and disrespectful‖ (p. 114). Based on the above reports, nonprofits attempting
to engage the Next Generation through social events would benefit from considering the long
term benefits before committing staff time and resources to traditional fundraising events.
A Change in Philanthropic Giving: Giving Circles – A “Social” Strategy
One of the oldest and most effective methods for creating personal and group
empowerment as well as social change is through the formation of circles. One type of circle is a
giving circle—a group of individuals who pool their funds together in an effort to maximize their
financial, intellectual, and emotional resources (Eikenberry & Bearman, 2009). Giving Circles
(GCs) are considered a high engagement form of philanthropy. The Forum of Regional
Associations of Grantmakers (2013) estimates the number of GCs to be between 1,600 and
2,000—giving more than $100 million to charity and engaging more than 12,000 people
annually (Eikenberry & Bearman, 2009).
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Rutnik and Bearman, (2005) conducted one of the first expansive studies on GCs in 2005.
In the study, Rutnik and Bearman found that GCs generally begin with either a motivated
individual or core group and maximize informal social ties by introducing acquaintances to the
circle. Eikenberry (2005) found that through GC membership, members practiced more
thoughtful, focused, and strategic giving. She found GCs to be ―something different‖ (p. 3), a
much more engaged, proactive approach to philanthropy compared with more traditional
philanthropic mechanisms such as direct mail response check writing (Eikenberry 2007,
McCarthy, Darrouzet, Beebe, & Mielcarek, 2011).
Giving circle typologies. GCs vary in size and structure. Some GCs are comprised of a
few members, while others operate with hundreds of members. Thompson (2011) proposed four
characteristics that describe the purest forms of circle interactions: egalitarian participation,
shared leadership, group-determined purposes and processes, and voluntary membership.
Egalitarian participation promotes peer-oriented conversations in respectful settings. Shared
leadership through GCs promote connectedness and trusting relationships. Group determined
purposes allow for members to collectively make decisions. Voluntary membership promotes
participation based on choice rather than obligation (Thompson, 2011).
Eikenberry (2005) identified three major types of GCs that continue to be a meaningful
categorization of today‘s GCs: small groups, loose networks, and formal organizational GCs.
Small group GCs usually include thirty or fewer members. A minimum individual contribution
may vary anywhere from $50 to $5,000 per year, although there are several groups that leave the
donation amount to the discretion of the individual and consider a $1 donor an eligible circle
member. Run by volunteers, often leadership is shared and is represented in a flat hierarchical
nonbureaucratic organizational structure (Bearman, Beaudoin-Schwartz, & Rutnik, 2005).
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Social interaction of group members is an important component of a small GC as well as the
inclusion of educational activities.
Loose networks, as categorized by Eikenberry (2005), are primarily social groups that
typically consist of a core group of volunteers who do the majority of organizing, planning, and
grant decision-making. There is little or no support staff and while individual participants can be
included in funding discussions, for the most part, a core group of volunteers make funding
decisions. Funding decisions often occur in response to the core group of volunteers learning of
individuals in need and decisions occur in an ad-hoc manner. Loose groups fluctuate in the
number of members going in and out of the circle. Even more so than small group GCs, loose
networks have no established minimum participation fee; the amount is usually left up to
individual participants. Participants usually make donations at a social event coordinated with
the purpose to pool funds, such as a potluck dinner.
Formal organizations are the third type of GC (Eikenberry, 2005). Formal organizational
GCs appear most like traditional membership organizations, with a designated hierarchical
structure, including a board or lead group, established committees, and hired professional
support staff. Membership tends to be quite large, with membership modal amount being $5,000
(Eikenberry & Bearman, 2009). Generally, the major focus of formal organizational GCs is
education, philanthropic engagement, and opportunities for volunteering. The three types of
GCs all share commonalities; all circles consist of educating donors, pooling of funds together to
achieve a collective financial impact, and supporting mutually agreed upon organizations and/or
individuals.
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Linking Giving Circles to the Next Generation
Philanthropic advisers and development professionals predict that the philanthropic
expectations and practices of the Next Generation will be quite different from that of the
Traditionalists or Baby Boomers (Kunreuther, Kim, & Rodriguez, 2009). For instance,
Generation X is philanthropically savvy and interested in a donor-controlled approach to
charitable giving (Cobb, 2002; Kramer, 2009), which is a major shift from the traditional social
relations framework that has governed interactions between donors and recipient groups
(Ostrander & Schervish, 1990). Giving circles (GCs) are a part of the growing trend towards
donor-controlled philanthropy. Together, giving circle participants make internally valid
decisions regarding funding allocations and are viewed as a highly participative form of
philanthropy.
Ostrander and Schervish (1990) conceptualized philanthropy as a two way interactive
relationship between donors and recipient nonprofit organizations. Donors and nonprofits
engage together in commonly identified and jointly created projects of shared interest to elevate
the position of recipients and provide practical guidelines toward empowering recipient groups.
Ultimately, interaction between donor and recipient was traditionally seen as a ―give and get,‖
win-win type of relationship. Ostrander and Shervish (1990) argue that this framework of
mutuality makes for ―a better match between the resources and needs of donors, and the
resources and needs of recipients‖ and creates a ―philanthropy that is more responsive to social
need‖ (p. 68).
However, twenty-three years after Ostrander and Shervish initially proposed the
framework, trends toward donor-controlled philanthropy have shifted away from a donor and
recipient mutual framework (Ostrander, 2007). Today‘s donor-controlled philanthropy is being
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defined by new social relationships where the donor‘s preferences take precedence. One such
way is through GCs (Eikenbery, 2009). Young donors want to see the impact of their
philanthropy and one vehicle is through Next Generation donors joining GCs (Davis, 2012).
Research Questions and Motivation
A dramatic age shift is occurring in the United States. Traditional generations are aging
and the Next Generation is reaching the crucial age in which habits of philanthropy start to form
and coalesce. The Next Generation; Generation X (ages 33 to 48) and the Millennial Generation
(ages 13 to 32) will become increasingly important as donors to nonprofits. Additionally,
―Scholars, practitioners, and journalists claim a new era has begun in American philanthropy—
an era in which donors want to be more engaged through unconventional modes of giving and
volunteering.‖ (Eikenberry & Bearman, 2009, p. 10). This new era represents a shift from
traditional philanthropy donor controlled philanthropy. In the past, nonprofits controlled
donation designation. For example, Traditionalists would write a check and not be further
involved. In addition, the literature regarding a change in philanthropic communications
channels reveals that social media and the Internet have permanently altered traditional
philanthropic communication strategies.
Methods
Research by Saratovsky and Feldmann (2013) reveals that there are many ways that
nonprofits attempt to engage the Next Generation. While I found the idea of creating a GC an
intriguing way to engage the Next Generation of donors, it was important to obtain information
from nonprofits to learn how they were attempting to engage the Next Generation. It was also
important to discuss additional strategies they were aware of for Next Generation engagement.
Many of the philanthropic preferences the Next Generation desired were reported in literature
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regarding characteristics of GCs (Thompson, 2011). Based on the literature, it was important for
me to have conversations with GC representatives and learn about their strategies for recruiting,
engaging, and maintaining GC members in general, and more specifically, their Next Generation
members.
Data Collection
Prior to conducting interviews, I submitted my study (Next Generation Fundraising USC
Study #UP-12-00391) to the IRB committee for review and they found it to be a Non-Human
Subjects Exempt Research (NHSR). Upon the completion of this review, I began the interview
process. The data was collected over a 6-month period of time through qualitative interviews.
For the interviews with nonprofit and GC representatives, I formulated a series of questions
based upon a literature review presented earlier. The questions served to structure the
conversations.
The objectives for the interviews were three-fold:
 To ascertain strategies for engaging the Next Generation and any experiences
working with giving circles from the perspective of leaders in nonprofit
organizations, specifically Executive Directors and the affiliated development
professionals,
 To inquire about giving circle member recruitment and engagement from the
perspective of key informants,
 To determine if the GC model is seen as a viable internal strategy for engaging the
Next Generation based on input from the nonprofit leaders and giving circle key
informants.
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Prior to the interviews, I conducted background research online to educate myself on
each nonprofit and GC to be contacted. Conversations were held in person and ranged from 20
to 60 minutes with the average time being approximately 30 minutes. I took notes during the
informal conversations and additionally followed up any gaps via phone and email. The results
of these conversations will be described in the findings and the insight from these will be
explored/presented in the discussion section.
Interviews with Nonprofit Professionals
To explore how nonprofit organizations are engaging the next generation of
philanthropists and their experiences with GCs, I contacted 15 representatives of nonprofit
organizations: 11 development professionals and 4 Executive Directors. All agreed to speak
with me regarding Next Generation strategies and their experiences with GCs. In the interviews,
I asked if they were attempting to engage the Next Generation; who within the Next Generation
they were attempting to engage; and what the strategies of engagement entailed. I also asked if
they felt their current strategies were successful and if they knew of any successful strategies
other organizations were implementing. Next I asked them to list the generational cohorts
represented within the development staff of the organization. We also discussed their
experiences working with GCs, if they were currently being funded by GCs, and if so, what type.
For the purpose of this study, I categorized the nonprofits with which I had contact with
into three types of organizations based on the amount of philanthropic dollars disclosed by
participants during the interviews large, medium and small. Large nonprofits are categorized as
receiving $10 million or more, medium nonprofits categorized as receiving $1 to $10 million,
TAILORING PHILANTHROPIC STRATEGIES

22
and small nonprofits categorized as receiving less than $1 million in annual philanthropic
revenue.
The 15 nonprofits in my sample were categorized as 11 large, 2 medium, and 2 small
organizations. Of the 11 large nonprofit organizations, 6 were university affiliated. 10 large
nonprofit organizations focus on raising funds for cancer treatment and research and the
remaining large nonprofit focuses on the arts. Additionally, 1 of the 2 medium nonprofit
organizations funds cancer and the remaining medium sized nonprofit organization funds
community services. Of the 2 small nonprofit organizations, 1 funds affordable housing and the
remaining nonprofit funds education.
TABLE 1
Nonprofit Organizations by Size and Areas of support (N=15)
Area of
Support

Small Medium Large Autonomous University
Affiliated
Total

Cancer 1 10 5
a, b
6 11
Children 1 1

2
a
2
Art 1 1
a
1
Community 1
c
1
a
1
Education 1
c
1
a
1
Housing 1 1
a
1
Total Areas
of Support

2 4
c
11 11 6 17
c

Note.
a = Sponsorship not mentioned
b = Children cancer focus
c = Several organizations had more than one area of support

Interviews with Giving Circle Representatives
Qualitative interviews were conducted with 15 GCs. The GCs chosen were obtained
through Internet searches and word of mouth referrals for GCs that had been established a
minimum of 2 years or more. My Internet search protocol consisted of a Google search with the
TAILORING PHILANTHROPIC STRATEGIES

23
keyword ―Giving Circles.‖ The search returned a link to a Giving Circle Network Internet
website. The site listed a total of 400 Giving Circles and referenced data from 2006. Living in
Los Angeles, my original intent was to set up in person interviews with established Los Angeles
based GCs. On the first page of the Internet site, there were links to nine GCs that had members
serving on the Giving Circle network board. After reviewing the nine GCs, I determined that
none of the nine GCs were located in the Los Angeles area. I further explored the website and
found a link to California GCs. The link to California GCs listed one chapter of a large GC
located in Los Angeles. When I clicked on the Los Angeles link, it was not active. Additionally,
the site listed inconsistencies between pages.
Based on the lack of useful information, I returned to the Google web search page on
GCs and explored the second website in the search results: The Forum of Regional Associations
of Grantmakers. The Forum of Regional Associations of Grantmakers website had a tab on their
home page for ―Giving Trends.‖ I clicked on the Giving Trends tab and found a link for GCs.
The GC link had a link to the Giving Circles Knowledge Center. The link listed a directory of
GCs from 2008.
Three Los Angeles GCs were listed. One did not list contact information. I performed a
web search for the name of the GC but no results were displayed. I contacted the remaining two
groups via email and one group agreed to participate in the study. The other group did not reply
to my email. Additionally there were four GCs in suburbs of Los Angeles listed on the site.
Two did not list contact information. I contacted the remaining two GCs but did not get a
response.
Next, I performed an Internet search using keywords: Giving Circles, Los Angeles and
Philanthropy. My search results included many donor circles but some of them were not GCs
TAILORING PHILANTHROPIC STRATEGIES

24
but rather donor membership groups within nonprofit organizations that provided donor benefits
in return for unrestricted donations. After examining many donor circles and having word of
mouth recommendations for several GCs, I broadened my search to include established GCs
across the United States.
I contacted 34 GCs via telephone and email to request participation in my study. Several
GCs did not respond and I sent follow up emails until I reached my sample size of 15 GCs.
Interviews were conducted with 10 founders, 2 committee members, and 3 Executive Directors
of GCs. While a few groups I spoke with had male members, the majority of the circles I
interviewed were comprised of women. Additionally, two GC Executive Directors oversaw
multiple national chapters and were able to provide additional information about many of the
chapters.
The GCs included the three distinct types identified by Eikenberry (2005)—small group
GCs, loose networks, and formal organizations. According to Eikenberry‘s typology, my
interviews included 5 representatives of small groups, 1 representative of a loose network and 9
representatives of formal organizations.
Findings
Interview Results from Nonprofit Representatives
As noted in Table 2, all nonprofits sought to engage the Next Generation through the use
of social media and events. There were variations by area of support and size.

TAILORING PHILANTHROPIC STRATEGIES

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TABLE 2
How Is Your Nonprofit Organization Currently Attempting to Engage The Next Generation?

Next Generation
Strategies

Small
Nonprofit
N=2
Medium Nonprofit
N=2
Large Nonprofit
N=11
Total
N=15

Social Media 2 2 11 15
Events 2 2 11 15

Note.
Nonprofit Type:
Small Nonprofits = Less than $1M Philanthropic Dollars
Medium Nonprofits = $1-$10 Million Philanthropic Dollars
Large Nonprofits = Greater than $10 Million Philanthropic Dollars

Social media. When asked what social media they use, seven different social media
applications were mentioned. As noted in Table 3, the only differences in social media usage
among the organizations were the extent to which Pinterest, Twitter, and blogs were used. Both
of the small nonprofits did not mention using these three social media vehicles.

TAILORING PHILANTHROPIC STRATEGIES

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TABLE 3
Social Media Strategies by Nonprofit Organization Size (N=15)

Social Media

Small Nonprofit

N=2
Medium
Nonprofit
N=2
Large
Nonprofit
N=11
Total
N=15

Website 2 2 11 15
Facebook 2 2 11 15
Pinterest 10 10
Twitter 2 11 13
Email/e-
newsletters
2 2 11 15
Email/e-
solicitation
2 2 11 15
Blogs 2 11 13

Note. Nonprofit Type:
Small Nonprofits = Less than $1M Philanthropic Dollars
Medium Nonprofits = $1-$10 Million Philanthropic Dollars
Large Nonprofits = Greater than $10 Million Philanthropic Dollars
Pinterest was not mentioned by one of the two medium sized nonprofits.
Events. Since events play an important role in informing and engaging people,
respondents were asked how effective events were in engaging the Next Generation. As Table 4
indicates, most of the nonprofits did not feel their event strategies were effective in engaging the
Next Generation. This was particularly true for the large nonprofits.

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TABLE 4
Nonprofit Organization Ratings of Event Success by Size
Events

Small
Nonprofit
N=2
Medium
Nonprofit
N=2
Large
Nonprofit
N=11
Total
N=15
Very Successful 1 1 3 5
Somewhat
Successful
1 1
Not Very Successful 1 8 9

Note. Nonprofit Type:
Small Nonprofits = Less than $1M Philanthropic Dollars
Medium Nonprofits = $1-$10 Million Philanthropic Dollars
Large Nonprofits = Greater than $10 Million Philanthropic Dollars

Staff generational component. When asked about the generational make-up of their
development staff, with the exception of the medium nonprofit organizations, all four
generations was mentioned as being represented in the development staff. Not surprising, the
Traditionalist received the fewest mentions.

TAILORING PHILANTHROPIC STRATEGIES

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TABLE 5
Nonprofit Development Generational Representation by Size
Generational Cohort
of Staff by Birth
Year
Small
Nonprofit
N=2
Medium
Nonprofit
N=2
Large
Nonprofit
N=11
Total
N=15
Traditionalists
1922 -1944
1 1 2
Baby Boomers
1945 - 1964
2 2 11 15
Generation X
1965 – 1980
2 1 11 14
Millennials (GenY)
1981 - 2000
2 2 11 15

Note. Nonprofit Type:
Small Nonprofits = Less than $1M Philanthropic Dollars
Medium Nonprofits = $1-$10 Million Philanthropic Dollar
Large Nonprofits = Greater than $10 Million Philanthropic Dollars

The last question posed to the nonprofit respondents was whether they were currently
funded by giving circles and if so by what type. As Table 6 indicates nearly all organizations
leaders surveyed mentioned they had received funding from giving circles. There did not appear
to be any differences between the type of giving circle and the size of the nonprofits represented.

TAILORING PHILANTHROPIC STRATEGIES

29
TABLE 6
Nonprofits Organizations Currently Funded By Giving Circles by Type

Giving Circle Small
Nonprofit
N=2
Medium
Nonprofit
N=2
Large
Nonprofit
N=11
Total
N=15
No 1 1
Yes 1 2 11 14
Small 1 2 11 14
Loose 1 2 11 14
Formal 1 11 12

Note. Nonprofit Types:
Small Nonprofits = Less than $1M Philanthropic Dollars
Medium Nonprofits = $1-$10 Million Philanthropic Dollars
Large Nonprofits = Greater than $10 Million Philanthropic Dollars

Giving Circle Types: Eikenberry (2005)
Small Groups = Less than 30 Members – Volunteers
Loose Networks = Ad-hoc Members
Formal Organizational GCs = Large Membership – Professional Staff

Interview Results from Giving Circle Representatives
As summarized in Table 7, 10 of the respondents were founders of Giving Circles. Five
were founders of small Giving Circles and 5 were founders of large Giving Circles. Three of the
respondents were Executive Directors and all were associated with formal Giving Circles. Two
committee members, 1 from a loose Giving Circle and 1 from a formal Giving Circle, also
responded.

TAILORING PHILANTHROPIC STRATEGIES

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TABLE 7
Type of Giving Circle and the Person Interviewed
Respondent/Size Small Loose Formal
Founder 5 5
Executive Director 3
Committee Member 1 1

Recruitment. One of the questions of interest in this study was the methods Giving
Circles used to recruit their members. As summarized in Table 8, Word of Mouth was used by
all Giving Circles to recruit members. Informal coffees and Stewardship Committees were
mainly used by formal Giving Circles in their recruitment efforts.
TABLE 8
How Does Your Giving Circle Recruit Members?

Giving Circle Small
N=5
Loose
N=1
Formal
N=9
Total
N=15
Word of Mouth 5 1 9 15
Stewardship
Committee
5 5
Informal Coffees 1 6 7
Multimedia 2 2

Note. Giving Circle Types: Eikenberry (2005)
Small Groups = Less than 30 Members – Volunteers
Loose Networks = Ad-hoc Members
Formal Organizational GCs = Large Membership – Professional Staff

Activities characteristic of members. An important aspect associated with any
nonprofit is the engagement of their members in the activities of the organization. Table 9
describes the activities most frequently mentioned by respondents to engage their members.
Social meetings and Educational Sessions were most frequently mentioned by the participants in
this study. Grant Award Nights and Committee Services were more frequently used by the
formal Giving Circles than the other two organizational types.

TAILORING PHILANTHROPIC STRATEGIES

31
TABLE 9
How Does Your Giving Circle Engage Members?

Giving Circle Small
N=5
Loose
N=1
Formal
N=9
Total
N=15
Annual Grant Award
Night
2 7 9
Serving on Committees 1 6 7
Social Meetings 4 1 9 14
Education 5 9 14

Note. Giving Circle Types: Eikenberry (2005)
Small Groups = Less than 30 Members – Volunteers
Loose Networks = Ad-hoc Members
Formal Organizational GCs = Large Membership – Professional Staff

TABLE 10
How Much Of Your Meeting Is Social?

Social Aspect of
Meeting
Small
N=5
Loose
N=1
Formal
N=9
Total
N=15
Highly Social 4 1 4 9
Moderately Social 1 1
Minimally Social 1 4 5

Note. Giving Circle Types: Eikenberry (2005)
Small Groups = Less than 30 Members – Volunteers
Loose Networks = Ad-hoc Members
Formal Organizational GCs = Large Membership – Professional Staff

Social Aspect of Meeting:
Highly Social = > 50% of the meeting is social
Moderately Social = 50% of the meeting is social
Minimally Social = <50% of the meeting is social

Social meetings. In answer to the question ―How Much of Your Meetings Are Social?‖
9 of the Giving Circle respondents mentioned their meetings were Highly Social. As highlighted
in Table 10, the Highly Social dimension of meetings was highest for the small Giving Circles.
TAILORING PHILANTHROPIC STRATEGIES

32
For large Giving Circles, 4 of the respondents mentioned that their meetings were Highly Social
and 4 of the respondents mentioned their meetings were Minimally Social.
One of the important challenges facing nonprofits as well as Giving Circles is strategies
for engaging the Next Generation. Table 11 summarizes the strategies these Giving Circles used
to recruit the Next Generation. Every one of the respondents mentioned the use of ―Outreach
Through Word of Mouth‖ to recruit the Next Generation. Reduced Membership Contributions
had the next highest mentions followed by Social Events and Parents Inviting Children to the
Giving Circle activities and events.
TABLE 11
How Is Your Nonprofit Organization Currently Attempting to Engage The Next Generation?

Next Generation
Strategy
Small
N=5
Loose
N=1
Formal
N=9
Total
N=15
Reduced
Membership Rates/
Sponsorships
3 4 7
Social Events 2 1 3 6
Parents Invite
Children
2 1 3 6
Outreach –Word of
Mouth
5 1 9 15

Note. Giving Circle Types: Eikenberry (2005)
Small Groups = Less than 30 Members – Volunteers
Loose Networks = Ad-hoc Members
Formal Organizational GCs = Large Membership – Professional Staff

Next Generation Members. One last question of interest focused on the extent to which
the different generations were part of the Giving Circle. The respondents indicated that all four
generations were part of the Giving Circle. All large Giving Circles reported having
membership representation from the Baby Boomer and Gen X generations. Nearly the small
Giving Circles reported having representation from these two generations as well. While the
TAILORING PHILANTHROPIC STRATEGIES

33
numbers are very small, it appears that small Giving Circles are slightly better than the large
Giving Circles in attracting Gen Y members.
TABLE 12
What Generations Are Represented In Your Giving Circle?

Generational
Cohort by Birth
Year

Small
Giving Circle
N=5
Loose
Giving Circle
N=1
Formal
Giving Circle
N=9
Total
N=15
Traditionalists
1922 -1944
3 1 8 12
Baby Boomers
1945 - 1964
4 1 9 14
Generation X
1965 - 1980
4 1 9 14
Millennials (GenY)
1981 - 2000
3 4 7

Note. Giving Circle Types: Eikenberry (2005)
Small Groups = Less than 30 Members – Volunteers
Loose Networks = Ad-hoc Members
Formal Organizational GCs = Large Membership – Professional Staff

Discussion
Nonprofit Respondents
Almost universally, development professionals and Executive Directors of the nonprofits
I spoke with agreed that the trajectory for philanthropy is greatly impacted by the Next
Generation merely by their quantitative influence on society. All nonprofit respondents cited the
increasing importance of the Next Generation as donors to nonprofits and the need for Next
Generation cultivation and engagement strategies to begin the process building the process of
life-long philanthropic relationships. It was also important to note that while nonprofit
respondents recognized the importance of building relationships with the Next Generation for
future philanthropic support, current support to meet organizational goals was a priority. Many
TAILORING PHILANTHROPIC STRATEGIES

34
of the nonprofit respondents I spoke with were in the midst of fundraising campaigns and were
under pressure to bring in current dollars.
Nonprofit Respondents: Social Media
Nonprofit respondents stressed the need to maintain a competitive social media platform.
Several respondents stressed the importance of having a powerful and engaging website to
provide a strong first impression for potential Next Generation donors. All nonprofits in my
study had a presence through websites, Facebook, email, e-solicitations, and e- newsletters. The
large and medium nonprofit organization had similar social media platforms and the respondents
stressed the need to continuously keep up with the latest trends in social media. They also noted
the importance of dedicated staff to manage the platform. Only one of the 11 large organizations
represented in the study did not have a Pinterest account. The two medium and small nonprofit
organizations represented in the study did not have Pineterest accounts. Additionally, the small
nonprofits did not have blogs or twitter accounts.
The Millennial Donors report found that the majority of Millennials, first learn about
nonprofit organizations through the web. This validates the responses from the nonprofit
respondents regarding the importance of having a strong website presence. Furthermore, 64% of
Millenials rely on email for information and 56% gather their information from peers (Johnson
Grossnickle and Associates & Achieve, 2011). Fifty-eight percent of Millennials in the
Millennial Donors report (2011) stated online giving as their preferred method for making a gift.
Of note, 48% of Millennials prefer to make a donation based on a personal request.
Additionally, the report revealed that only a small number of Millennials donated through text,
Facebook, phone or mobile apps (Johnson Grossnickle and Associates & Achieve, 2011).
TAILORING PHILANTHROPIC STRATEGIES

35
Reports show that the Millennial Generation primarily prefer to give through online vehicles.
Additionally search engines are reported as an important method for gathering information
(Johnson Grossnickle and Associates & Achieve, 2011).
Nonprofit Respondents: Events
All nonprofit respondents with whom I spoke primarily attempted to engage the Next
Generation through events. Most respondents spoke of the staff intensive efforts and related
expenses as prohibitive. Many events were seen as ―one off events‖ where attendees did not
choose to engage beyond attending the event. Many of the development professionals
commented that other organizations also holding events to attract the Next Generation create
pressure to come up with increasingly unusual events to attract younger attendees. Of the fifteen
nonprofit respondents I spoke with, five nonprofits saw a return on investment on Next
Generation targeted events and shared some commonalities. Three of the five nonprofit
organizations held and highlighted events that benefitted children and reported their events as
very successful. One respondent reported the funds raised through the event benefit a childcare
center serving low-income children in the community. The respondent believes this event
especially appeals to the Next Generation because most of the women, having children of their
own, can relate to the cause. When probing further, the events that centered around children
predominately attracted Generation X parents and not the Millennial Generation. All three
nonprofits, one small, one medium, and one large nonprofit organization mentioned that they
drew from the community to attract Next Generation X event attendees.
The remaining two of five nonprofits that saw a return on investment were distinguished
by their locations. One nonprofit has many wealthy Next Gen donors that benefitted from the
TAILORING PHILANTHROPIC STRATEGIES

36
tech boom and are already major donors to the organization. The additional nonprofit
respondent that engages Next Generation donors through events and sees a return on their
investment is a well established charity within a Metropolitan city with a very wealthy donor
base that enjoys society events.
Nonprofit Respondents: Giving Circles
Most of the nonprofit respondents had positive experiences with GCs and were grateful
for the funding. The positive benefits included funding difficult-to-fund pilot projects and
exposure to new potential donors. Most nonprofit respondents cited that occasionally GC
members additionally supported the nonprofit outside of the GC. Additionally most large
nonprofits received bequests made directly to the nonprofit organization by GC members outside
of their relationship with the GC.
Two of the respondents for the nonprofits, one small and one medium sized nonprofit
organization, stated that while they welcomed funding from GCs, they could not plan ahead for
multiyear projects because funding was not guaranteed. Most nonprofit organization
respondents also mentioned formal GC‘s professional staff often discouraged relationship
building between nonprofit staff and GC members even if the members sought enhanced
relationships. Interactions were limited to discourage additional personal funding to the
nonprofit even if the GC members sought enhanced relationships. Professional staff within the
GC wanted all donations to be routed thought the nonprofit. .
GC Respondents
TAILORING PHILANTHROPIC STRATEGIES

37
The interview questions for GC respondents were tailored to assess whether a GC would
be a beneficial strategy that development professionals could use to build long-term relationships
with the Next Generation. Interviewees were asked questions regarding recruitment and
engagement to assist in determining if the GC model is a viable internal strategy for nonprofit
organizations attempting to engage the Next Generation.
Several common themes emerged from the interviews with GC respondents. Several
respondents stated that strong leadership and commitment by the founding members was crucial
from the very beginning. There were always one or two people who drove the efforts, usually
someone who was particularly passionate about a cause or simply wanted to make a difference.
Most of the women reported that the circles started on a small scale and grew based on peer-to-
peer referrals.
Another emerging theme was that regardless of the size of the membership of the GC,
members felt a strong sense of community and bonded to each other through their membership.
A challenge for many of the small volunteer driven GCs interviewed was the lack of
administrative help. Members not wanting take away from funds raised for charity did not want
to pay for much needed administrative help. Furthermore, many GC enjoyed onsite visits to the
nonprofit organizations that they were considering funding. The net effect was that not only
were the members deeply moved by the causes, they also became extremely knowledgeable
about the nonprofit organizations and/or causes that they supported.
GC Respondents: Recruitment and Engagement
First, in order to properly understand the attributes of GCs, it is necessary to understand
how initial members are recruited and maintained. Participants were asked, ―How do you recruit
TAILORING PHILANTHROPIC STRATEGIES

38
new members?‖ All GCs cited word of mouth as the number one method for recruiting members.
For example, one GC member noted in an interview, ―Our biggest tool is word of mouth. Our
new tagline is ‗everyone brings one‘‖ (2013).
The majority of the groups hold annual social events with grant-making ceremonies,
which were reported to assist in recruitment and engagement. Members are encouraged to bring
new friends to learn about the circle. From my interviews, I learned that several GCs have a
stewardship chair on the executive board whose assignment is to engage new members,
encourage existing members to invite people to events, and proactively recruit new members.
A common theme specifically pointed out by many GC respondents was that smaller
events are also held in individuals‘ homes and members invite their groups of friends as a way to
educate them about the circle.
According to many of the GC respondents with whom I spoke, engaging members
through involvement opportunities within the GC has proven to be a strong strategy. Six of the
large GCs and one small GC reported that serving on committees was an important engagement
component. Participation in committees, such as the Steering Committee, Executive Committee,
or Grant-Making Review Committee, which typically meet about once every 1-2 months, help
keep members engaged throughout their term and increase retention post committee. One GC
respondent stated that her GC encourages members to join committees and requites no specific
educational or professional background. Members are provided with training for each committee
and attribute part of their effectiveness to a diversity of experience, perspectives, and
backgrounds.
While increased engagement appears to result from members joining a committee,
several women I interviewed stressed that these are volunteer positions and the time commitment
TAILORING PHILANTHROPIC STRATEGIES

39
can be demanding. Two of the smaller GC groups reported that it was challenging to find
members to serve on the executive team and that people often served multiple back-to-back
terms out of necessity. This challenge has implications for sustainability.
GC Respondents: Engagement through Social Aspects of Meetings
Participants were asked, ―How important is the social component of your meetings?‖
Respondents for GCs interviewed concurred that the social aspect of GC meetings was a strong
component to member retention and engagement. Whether the GC was a small group, loose
network, or a formal organizational GC, respondents generally reported providing opportunities
for food, beverages, and social interaction. Following an agenda and structured discussions to
get through agenda items relevant to the meeting topic were stated as important, but catching up
and hearing about personal and professional lives appeared typical for most meetings. All GC
respondents, with the exception of one respondent for a GC, pointed to the strong social
component of the group as one of the main forces helping to retain and engage membership in
the circle.
Participants were asked, ―Do you feel your members become more engaged over time?‖
The member of one GC stated that once members pass the 2-year membership mark, they
generally continue their membership each year. The GC respondents with whom I spoke have
become adept at keeping membership socially engaged. It appears that once people join a group,
membership stays fairly consistent.
In the infrequent instances in which people decide not to rejoin, there are a variety of
reasons given. The two biggest reasons for people leaving the group are a change in their
personal ability to donate and moving out of town. Another reason may stem from
TAILORING PHILANTHROPIC STRATEGIES

40
dissatisfaction with the funding designation voted on by the group. For many GCs, it is
customary to have members propose organizations to be funded. Sometimes, when a member‘s
suggestion is declined, the member chooses not to rejoin.
GC Respondents: Events
Participants were asked, ―How important are events to your members?‖ Interestingly,
events held in the normal course of business were reported to be successful for GCs. However,
events outside of the normal course were reported by respondents to be less successful. The
majority of members of GCs saw value in holding events such as Grant Award Night. Nine of
the fifteen GCs listed Grant Award Events as an important method for GC member engagement
One GC respondent stated that they highlight their grantees and celebrate the year at an annual
summer event. The event is described as extremely social and GC members invite family,
friends, and community members. Another GC respondent mentioned her GC holds a Grant
Night but positions it a as a fundraiser open to members and nonmembers. One respondent for a
well established GC relayed that they attempted to hold local events, such as a comedy club
night, cocktail parties at bars, and a party at a boutique but were met with less overall
participation.
GC Respondents: Next Generation Strategies
Participants were asked, ―Do you have strategies in place to engage the next generation
of philanthropists?‖ GCs attempt a multitude of strategies to appeal to the Next Generation but
all of fifteen respondents for the GCs mentioned they engage the Next Generation through word
of mouth outreach.
TAILORING PHILANTHROPIC STRATEGIES

41
Next Generation: Reduced membership rates / sponsorship. Seven GCs offer
reduced rates to encourage Next Generation members. Another GC respondent spoke of how her
GC has initiated a sponsorship program in which members or someone else in the community
will donate money to the circle to partially sponsor a 1-year membership targeted at potential
Next Generation members. Partial sponsorship is offered because they see value in having
members add some of their own funds.
Next Generation: Targeted events. One GC respondent relayed that she encourages
people to bring their children to their annual event and sees this as modeling behavior or planting
the seeds for Next Generation members. One GC respondent has been very active in attracting
younger members. They believe that growing their membership and attracting younger members
is key to sustainability. Furthermore, part of their social responsibility is to educate the Next
Generation. The circle also wants to expand and make possible new models for meetings, such
as encouraging groups that meet at work to go to breakfast together or meet for cocktails. The
group sees more opportunities now to expand in colleges and workplaces where younger people
are spending their time.
Next Generation: Social media. One particular group is working on several fronts to
engage the Next Generation: heavy engagement in social media—Facebook, Twitter, and
moving into more Pinterest. Participants were asked, ―How do your members prefer to be
contacted—via email, snail mail, phone calls?‖ All circles have incorporated social media and
the majority of circle representatives stated that the circles almost exclusively communicate via
email. In some cases, particularly with new members, they may utilize phone calls and in-person
outreach when necessary. One GC consisting of Next Generation members uses Survey Monkey
for voting on grant recipients.
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42
Conclusions and Recommendations
This study set out to determine if the GC model is a viable internal strategy for engaging
Next Generation donors based on input from nonprofit leaders and giving circle key informants.
The need to develop a strategy to engage the Next Generation of philanthropists came from the
knowledge that demographic changes are currently altering the philanthropic landscape. The
traditional generations of donors are aging and nonprofit organizations are reaching out to the
next generation of possible donors. The Next Generation, comprised of individuals born
between 1965 and 1980, referred to as Generation X, and individuals born between 1981 and
2000, referred to as Millennials (also known as Generation Y), need to be approached in ways
that differ from previous generations. A paradigm shift in philanthropy is reflected by today‘s
donors seeking control and impact results (Hamilton, 2004). A GC is an example of donor
controlled philanthropy (Eikenberry, 2009) and is growing in popularity. GC respondents
reported and demonstrated that properly run GCs possess the power to recruit and engage the
Next Generation members. Because of the inherently social aspect of GCs, they can satisfy the
Next Generation‘s desire for networking and communal activities
Based on the literature, and my interviews, I have arrived at 15 recommendations. In
presenting these recommendations, I offer some contextual information or the thinking that
shaped each specific recommendation. This is followed by the recommendations associated with
those thoughts and ideas.
I learned from my interviews with nonprofit respondents that while the cultivation and
engagement of the Next Generation was stated as critical for future sustainability, the nonprofit
respondents expressed increased pressure to bring in current funding.
TAILORING PHILANTHROPIC STRATEGIES

43
 I recommend the creation of a GC from within a nonprofit organization as a relatively
low maintenance way to engage the Next Generation of philanthropists as a long-term
donor strategy.
I learned though my interviews with GC respondents that ―word of mouth‖ has been an
important method of recruiting and engaging Next Generation members. Several GC
respondents stated that strong leadership and commitment by the founding members were crucial
from the very beginning. GC respondents reported that once GC leadership was formed,
membership grew by word of mouth
 Nonprofits should strategically select strong Next Generation leadership when internally
creating Giving Circles within their organizations. Ideally, Next Generation leadership
for an internally created GC should be chosen for the leaders' potential for future
philanthropy. Nonprofits should look within their network of Next Generation potential
candidates, such as children of board members, current donors, children within family
foundations, ―transfer of wealth‖ heirs, and young community leaders. GC members
should be encouraged to recruit peers.
Peer-to-peer relationships are a strong indicator of donor commitment and actions. The
Millennial study found that 36% of Americans reported increased involvement associated with a
cause based on the level of importance families and friends exhibited (Johnson Grossnickle and
Associates & Achieve, 2011). Additionally, 39% of respondents expressed that knowing
someone personally affected by a cause would increase motivation for involvement. Interviews
with GC respondents revealed that GC members were encouraged and often expected to ask
peers to join the group. The respondents found peer-to-peer asks successful for recruitment.
TAILORING PHILANTHROPIC STRATEGIES

44
 Nonprofit representatives creating internal GCs should encourage GC members to
introduce the organization to new contacts and donors though their networks outside of
the circle.
 Nonprofit organizations creating GCs from within their organizations should take
advantage of peer-to-peer relationships and assign Next Generation nonprofit staff to
Next Generation GC members.
The majority of the nonprofit respondents with whom I spoke indicated that high profile
events as a tool to recruit Next Generation members were not particularly successful. At the
same time, I learned from my interviews with GC respondents that events such as Grant Award
Night were successful in engaging and recruiting GC members. Next Generation donors have
the desire to personally create a greater impact. GCs have the ability to provide an impactful
experience for first time philanthropists by the growth of donations through pooled funds. Grant
Award Night events are successful because they demonstrate the impact of the GCs pooled funds
through a social and educational component.
 I recommend nonprofits create GCs from within the organization and follow the GC
model of holding events; demonstrating impact with a social and educational approach to
recruit and engage the Next Generation.
The introduction of social media has also increased the opportunity for nonprofit visibility
both nationally and globally. GCs connected to branded nonprofits can add prestige to a newly
formed GC. Properly implemented, the Internet can provide more frequent communication with
donors, and thus offer opportunities for a more meaningful dialogue between professionals and
donors (Hart, 2006).
TAILORING PHILANTHROPIC STRATEGIES

45
 Nonprofit social media platforms should be considered part of the overall philanthropic
strategy for hosted GCs.
While many of the Next Generation are not in a financial position to make a major gift,
based on research, many Next Generation future philanthropists are actively forming their
philanthropic identities (Davis, 2011).
 To encourage Next Generation participation, reasonable membership rates based on GC
leadership recommendations should be offered to younger members.
 Current board members and donors should be encouraged to sponsor younger members.
One GC, a formal organization has an admirable model whereby members of the
community sponsor the next generation of members.
Additionally, we know that Boomers enjoy time with family. Additionally, by further
engaging board members and existing donors, we know that increased engagement may result in
increased giving (Davis, 2011).
 Baby Boomer donors should especially be encouraged to join the GC and sponsor their
children or Next Gen members.
Most volunteer driven GCs respondents expressed the need for administrative help.
 Nonprofit organizations creating the GCs should offer administrative staffing assistance
including assistance for Grant Award Night event planning, legal oversight, mailings,
communication and marketing strategies..
GC respondents reported strong retention and engagement for GC members when members
were given positions of responsibility on committees.
TAILORING PHILANTHROPIC STRATEGIES

46
 Nonprofit organizations creating GCs should offer administrative assistance as possible
for committee members to encourage GC members to join committees.
Generation X and Y have stated that they would sever ties with organizations if trust was
ever lost. Trust can be built and maintained by relationships between people. Conceptually,
trust between a donor and a nonprofit can be built through forming communities. Giving Circles
have the ability to connect donors to a community though social, educational and engagement
components more so than other types of philanthropy (Eikenberry, 2008).
 Nonprofit organization leadership creating GCs should encourage trust through direct
access brought about through the forming of partnerships.
Nonprofits creating GCs from within the organization have the ability to manage
relationships with GC members. Literature as well as nonprofit respondent‘s interviews revealed
that often GC professional staff limits relations with the recipient group (Ostrander & Shervish,
1990).
 Nonprofit representatives creating internal GCs should develop relationships with GC
members. Additionally, nonprofits should maintain active dialogue with circle members
regarding specific funding needs and strategic priorities.
.
Additionally researchers found that by joining and actively participating in a Giving Circle,
members gave larger donations. They also found that each time donors give; they grow more
bonded to organizations (Eikenberry & Bearman, 2009).
 Nonprofit representatives should educate GC members of additional funding
opportunities as appropriate.
TAILORING PHILANTHROPIC STRATEGIES

47
Another key demographic factor is the growing influence of women. Women philanthropists
are becoming more prevalent as a result of a greater female presence in leadership positions in
the workforce. Women are also living longer than their spouses and thus coming to control
accrued finances. While not all Giving Circles are women only, Giving Circles appear to
especially attract women members.
 Nonprofits creating a Giving Circle from within the organization should encourage word
of mouth recruitment of women philanthropists resulting in new philanthropic
relationships.
Further Research
The potential for future philanthropic support from the Next Generation of philanthropists by
engaging the generation now will need to be evaluated in a long-term study. We do know that
Barlock and Joyce (2002) found involvement leads to commitment and commitment leads to
support. Further research segmenting the Next Generation based on various demographics is
needed to assist in nonprofit organizations in meeting the expectations and challenges of working
with these generations in the coming 10 to 20 years. Currently, the Next Generation
encompasses a large range of ages. The youngest Millennials are thirteen years old, and the
oldest Gen X is 48 years of age. This span of 35 years is a substantial amount, which should be
further segmented. Such segmentation can potentially help nonprofits develop the most strategic
philanthropic courses of action.

TAILORING PHILANTHROPIC STRATEGIES

48
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56
Giving Circle Interview Questions

1. How do you recruit new members?

2. Once members join do they generally continue their membership each year?

3. Do you feel your members become more engaged over time? If so, why do you think this
is the case?

4. How much of your meetings are social?

5. How important are events to your members?

6. Do you have strategies in place to engage the next generation of philanthropists?

7. How do your members prefer to be contacted? Via email, snail mail, phone calls?

8. Would you be willing to share any challenges you may have in sustaining the group?

Abstract (if available)

Abstract Demographic changes are currently altering the philanthropic landscape. The traditional generations of donors are aging and, as a consequence, development professionals will have to reach out to the next generation of possible donors. The Next Generation, comprised of individuals born between 1965 and 1980, referred to as Generation X, and individuals born between 1981 and 2000, referred to as Millennials (also known as Generation Y), need to be approached in ways that differ from previous generations. For example, the next generation seeks greater personal involvement in their endeavors. This article explores the utility of nonprofit organizations creating internal giving circles to better recruit and engage the Next Generation. The paper concludes by discussing the social implications that make giving circles a viable tool for development professionals seeking to create and maintain sustainable philanthropic models.

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Asset Metadata

Creator Pakfar, Tina M. (author)

Core Title Tailoring philanthropic strategies to new generational cohorts

School School of Policy, Planning and Development

Degree Doctor of Policy, Planning & Development

Degree Program Public Policy / Planning

Publication Date 05/16/2013

Defense Date 04/23/2013

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag giving circles,Next Generation,OAI-PMH Harvest,philanthropy

Format application/pdf (imt)

Language English

Contributor Electronically uploaded by the author (provenance)

Advisor Myrtle, Robert C. (committee chair), Esparza, Nicole (committee member), Jordan-Marsh, Maryalice (committee member)

Creator Email tpakfar@coh.org,tpakfar@gmail.com

Permanent Link (DOI) https://doi.org/10.25549/usctheses-c3-254846

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