Pains Charities.
-
The median loss for nonprofits due to fraud is $100,000, which can be devastating for organizations with limited resources. Nonprofits often face fraud risks due to high trust levels, limited oversight, and cash-heavy operations, leading to financial and reputational damage.
-
Up to 49% of nonprofit leaders operate without a strategic plan, potentially leading to mismanagement. Mismanagement and corruption in the nonprofit sector result in wasted resources and unmet goals.
Increasing competition from other nonprofits and crowdfunding platforms creates donor fatigue. Makes it harder to stand out and secure sustainable funding. -
They value transparency and expect organizations to demonstrate measurable impact. As such, understanding the motivations and preferences of these younger generations is crucial for nonprofits aiming to cultivate lasting relationships with their donors.
-
Skeptical donors hesitate to give or demand proof of impact, adding pressure to provide detailed reporting.
73% of donors consider trust in a charitable organization very important before donating.
Charities have difficulty building and maintaining trust due to scandals, fraud concerns, or lack of transparency. -
28% of European nonprofits reporting a fall in donation income. In the US, declining donations and reduced government funding are straining nonprofit operations.
Charities are struggling to connect with younger donors, who demand digital-first approaches and measurable results.
High donor churn rates due to lack of engagement, impersonal outreach, or perceived lack of impact. Costly efforts to acquire new donors instead of retaining existing ones.
-
Navigating compliance rules and financial audits adds complexity, especially when managing international donations. Resulting in high administrative costs and reputational risks from errors.
Pains Charity Donors.
-
Uncertainty about how funds are used—"Where did my money go?"
Fear of mismanagement: concerns about fund misuse, overhead costs, or funds not reaching intended beneficiaries.
Worry that too much of their donation goes to administrative expenses (or worse) rather than programs. -
Scandals, fraud, and lack of accountability damage donor trust.
Perception gap: donors feel disconnected from organizations and suspect hidden agendas.
Fear that organizations may not align with their values (e.g., sustainability, inclusion). Concerns about hidden biases or exploitation in operations. -
Too many causes and organizations to choose from, leading to decision fatigue.
Feeling overwhelmed or pressured by frequent requests for donations. Many donors dislike aggressive marketing strategies.
Confusion: not knowing which organizations are genuine, effective, or aligned with their values.
Donors, especially younger ones, feel bombarded by frequent asks for donations, contributing to fatigue and disengagement.Preference for Impact Reporting – To combat fatigue, 70% of Gen Z and Millennials say impact reporting would motivate them to give more, emphasizing the need for meaningful updates instead of repeated requests.
-
Not knowing whether their donation actually made a difference.
Lack of feedback: missing follow-ups or impact updates after giving.
-
Feeling like a number, not a partner—donors often only hear from organizations during fundraising campaigns.
Disconnection: lack of personal acknowledgment or meaningful engagement.
Long-term commitment anxiety: worries about being locked into recurring donations without an easy opt-out. -
Many donors want to engage more deeply but don’t know how.
Lack of quick/short term volunteering, advocacy, or learning opportunities.
Pains Funders of Impact Projects.
-
Investment scams accounted for the highest reported losses in 2023, totaling more than $4.6 billion, a 21% increase from 2022.
-
74% of scam victims did not recover any of their investment from the most recent fraud they were involved in.
-
65% of repeat scam victims in an investment report strong trust in the person who introduced them to the fraudulent investment.
-
Backers lack accessible tools to verify how their contributions create tangible impact.
Gen Z and Millennials demand change.
-
Gen Z donors are particularly motivated by impact reporting (70%) and prefer a mix of personal stories (42%) and facts and figures (48%) to ensure their contributions make a difference. Gen Z donors value stories and statistics about their impact. About 42% prefer personal stories, while 48% want facts and figures showing how their support made a difference.
Distrust is also a concern, with some Gen Z participants stating that organizations sometimes abuse trust and mismanage funds.
Blackbaud Institute. (2024). Gen Z at the Table: A special edition of the next generation of giving. -
40% of Gen Z research how organizations spend their money and look for evidence of how their contributions are used.
Transparency is paramount for Gen Z, who are highly attuned to social and environmental issues. They want to know how their contributions make a difference and where their money goes. Charities that openly share information about their operations, finances, and impact build trust and credibility with Gen Z donors.
Blackbaud Institute. (2024). Gen Z at the Table: A special edition of the next generation of giving. -
Gen Z expects organizations to demonstrate measurable impact through transparent reporting and clear results. They value personal stories (42%) and data-driven insights (48%) to show how their contributions make a difference.
Understanding the motivations and preferences of these younger generations is crucial for nonprofits aiming to cultivate lasting relationships with their donors. -
Millennial donors prefer to give through online platforms. They demand authenticity, strong digital outreach, and compelling storytelling that resonates with their desire to make a difference.
Like Gen Z, Millennials are motivated by trust in organizations, a strong belief in missions, and impact transparency.
Millennials donated an average of $1,323 in 2022, which is higher than Gen Z's $747 but lower than Baby Boomers' $2,568.
Impact reporting and personlal thank-yous also resonate with Millennials, making them more likely to increase their giving.
Both generations show a tendency for spontaneous giving rather than long-term budgeting.
Blackbaud Institute. (2024). Gen Z at the Table: A special edition of the next generation of giving. Blackbaud Institute. -
In terms of what Gen Z is tracking in relation to donating, they are particularly interested in:
How their money is being used
The direct impact of their donations on communities or causes
Financial transparency of the organizations they support
Progress updates on specific projects or initiatives
The overall effectiveness and efficiency of the charities they donate to
This desire for tracking and tracing aligns with Gen Z's values of authenticity, transparency, and making a tangible difference through their charitable giving.