Millenials and Museum Fundraising

Many millennials are under-employed, financially constrained, and still living at home well into adulthood. From a museum fundraiser’s perspective, this may not sound like the ideal demographic. But there are very compelling reasons for fundraisers to engage this generation that will profoundly change museum fundraising. Here’s why museums should focus on millennials now, as well as ways to engage this distinct and powerful generation.

Why Should Museum Fundraisers Focus on Millennials Now?

With over 83 million millennials in the United States, the sheer size of this generation is difficult to ignore.[1] They are 10% larger than even the baby boomers, previously the largest generation, and twice the size of Generation X.[2] Millennials will make up half of the U.S. workforce by 2020 and 75% of the global workforce by 2030.[3] According to Colleen Dilenschneider, “no generation within the next four decades will have the size and potential buying power to influence your organization more [than millennials].” [2]

Additionally, millennials are likely to have more disposable income in the future as they advance in their careers and are the beneficiaries of generational wealth transfer. In fact, millennials could inherit approximately $40 trillion,[4] which is the most significant transfer ever experienced, and almost half of this amount is expected to go to charitable causes.[5] Millennials represent the largest segment of visitors to cultural institutions and they have demonstrated a willingness to support non-profits, as 84% of them made a donation in 2016.[6] This generation also has the highest propensity to ask others to support causes that they care about,[7] so museums can benefit from this millennial multiplier effect.

As baby boomers, who currently provide the backbone of museum donations, begin to move on, the future of museums clearly depends on the support of next-generation donors. Since it takes time to cultivate the types of relationships that will support the financial needs of museums in the future, fundraisers need to engage millennials now.

What Are Millennials’ Funding Priorities?

The marked shift in millennials’ priorities and expectations from those of prior generations will reshape society and its institutions, including museums. Overall, millennials support causes rather than organizations, and engage to support people, not institutions.[8] They are generally more interested in helping social rather than artistic organizations,[9] which could be in part because it’s easier for social organizations to demonstrate impact. And millennials want impact.

Millennials want to be able to measure this impact and the real difference that their contributions make today. According to the authors of Generation Impact, all donors want to make a difference, but for millennials “impact is everything”[10]  Prior generations give for a variety of reasons, including a sense of obligation, social status, or a feel good factor. But for millennials, impact is the top priority in making funding decisions. This generation values immediate changes and wants to see the tangible impact on beneficiaries in measurable terms. They are generally not as interested in the history of the organization, nor funding the organization in perpetuity, but are primarily focused on seeing how their donations will be put to use and make a difference now.

Millennials donors are also interested in collaboration and are more hands-on than previous generations. [10]  They want genuine involvement and not just writing checks. As they grew up in a highly connected world, they have greater expectations of information access and sharing and value transparency. Millennials want connection and care about the organization’s mission. They want to work in partnership with the organizations they support as engagement leads to more impact. The influence of millennials’ distinct priorities will affect their funding decisions and transform traditional donor relationships and fundraising strategies.

What are Millennials’ Responses to Traditional Fundraising Methods?

Given millennials’ funding priorities, they often respond differently to traditional fundraising methods than previous generations as described below:

Membership is often a precursor to other forms of support for museums. According to Dilenschneider, millennials are looking for connection through membership, whereas prior generations placed a higher value on membership perks, like priority access and advanced notice. As millennials prioritize an organization's social mission, and "mission-based members are more valuable members than transaction-based members," museums should be incentivized to revise their membership programs to engage mission-focused millennials.[11]

Annual Funds often ask for donations without telling people exactly how their money will be spent. Millennials are not as supportive of annual funds as they want to give to a specific cause with measurable impact. Prior generations are more willing to give to the institution overall and support general operating funds. Millennials would potentially be more supportive of annual funds if they offered the opportunity to select specific needs to fund and demonstrated greater transparency and measurable impact.

Capital Campaigns are less likely to attract contributions from millennials than prior generations. Millennials are not as interested in structures and organizations as in the people they help and the causes they support.[12] Museums could possibly increase millennial interest by focusing on shared goals and how capital projects will benefit people and communities.

Endowment fundraising generates funds for the museum to invest rather than spend and millennials prefer their donations to have more tangible results. They want to see their donations put to work for a specific need now so are generally less supportive of endowments than prior generations.[13] Museums could potentially heighten the appeal of endowments to millennials by educating prospective donors on the significant benefits of this type of funding, as well as by structuring contributions in a manner that is more consistent with their funding priorities. Museums could reframe the benefits of endowment giving to highlight the recurring impact of annual pay-out spending to support mission related activities, rather than focusing on the accumulation of assets for the long-term sustainability of the institution.

Planned Giving is unlikely to appeal to millennials given their funding priorities. Unlike prior generations, they aren’t interested in accumulating wealth to give in their mature years, but want to give throughout their lives so they can see the impact. Museums could appeal to younger adults by focusing on vehicles that allow giving while living, as millennials prefer this to setting up perpetual foundations or waiting to make bequests. [10]

Recurring Gifts often support the annual fund or other non-specified organizational needs. Museums could make them more appealing to millennials by offering options to select specific and tangible needs to support on a regular basis. Museums could potentially elicit more millennial participation in these programs if they highlight how small gifts on a regular basis have meaningful impact.

Matching Gifts can be an effective method of motivating millennials to donate, as seeing measurable impact is so important to them. While this method can also incentivize other generations, a non-profit saying that their gift will be matched or multiplied is more likely to incentivize millennials than the average donor. [7]  Museums can also use alternative versions of matching gifts, such as challenge grants, where a donor agrees to match incoming gifts from other donors if they reach a certain amount.

Fundraising Events can be an effective method of bringing millennials into museums. Young adults prefer less formality than many of the typical fundraisers held by prior generations, like formal dinners and black tie galas. But events have to go beyond parties to make the meaningful connections that are important to millennials. Museums could provide younger adults with more casual social and mission-based opportunities to engage with like-minded peers.

Given millennials’ priorities, and their typical response to many traditional fundraising methods, it seems clear that museums will need to adapt their approach to attract, engage and retain millennial donors.

How Can Museums Increase Millennial Engagement?

Millennial donors want to be engaged in their giving. Engagement is more often a precursor to financial contributions for millennials than for prior generations. In order to increase engagement, museums must promote inclusiveness as non-traditional audiences often feel less welcome at cultural organizations ,[9] and millennials are the most racially and ethnically diverse generation in history.[14]

Effective use of technology is often a prerequisite for organizations seeking millennial engagement. Although technology has affected the giving behavior of all generations, it’s had the biggest impact on millennials. Millennials are the most likely generation to be motivated by an organization’s website and to make online donations. [7]  Smartphone usage and social media are pervasive among this generation and are used not only for communicating but also for giving. Museums should enhance their communications to facilitate the engagement of highly connected millennials.

In addition, museums can expand volunteer opportunities to offer real, meaningful experiences that are aligned with the organization’s mission, and the individual’s interests, allowing millennial supporters to have hands-on direct involvement with impact. For this generation, those who volunteer are more than twice as likely to support the organization financially as well. [4]  And when millennials form long-term volunteer relationships, they tend to give larger gifts, as well as encourage their friends and family to contribute too. [12]

Museums can also engage millennials as committee members and encourage them to serve as ambassadors. Millennials are best positioned to reach their own peers and can provide the museum with valuable insights, feedback and new ideas. Organizations can provide development programs and mentoring to strengthen relationships with this generation and cultivate future leadership. Promoting the board service of millennials is essential. This generation is currently under-represented on museum boards, and board members are often an organization’s most loyal supporters. [11] Millennials could provide long-term leadership and create a shared vision for the museum’s future, as well as lead a new generation of giving.

Millennials will have a Significant Impact on Museum Fundraising

Given their size and expected financial relevance, millennials will clearly have a significant impact on museum fundraising. As millennials become the dominant generation in the United States, their distinct characteristics and divergent views from previous generations will require museums to approach them differently. The influence of their funding priorities will result in more emphasis on social mission, greater focus on demonstrating impact and increased transparency. As millennial contributors want a higher level of involvement, museums and donors will increasingly work in partnership in a more collaborative environment.

Museums will need to adapt traditional fundraising methods or create new ones that focus on the present and have targeted, tangible, measurable results. By considering millennials’ personal interests and providing funding opportunities that are aligned with their priorities, museums will promote greater connection and engagement of this generation.

Engagement is essential for millennials and establishes a foundation for future giving. Technology can play an important role in fostering millennial engagement given their hyper-connectivity and reliance on digitally-based forms of communications. New technology based giving methods, such as crowdfunding, are popular with millennials and will continue to emerge and evolve.

In conclusion, museums should adapt their development efforts now to engage millennial supporters who will sustain the future of their organizations. Museums that successfully bridge the generational gap will benefit from millennials’ involvement today, maximize the effectiveness of fundraising efforts over time, and promote the organization’s financial viability in the future.