Consumerism as Philanthropy: The Generosity Crisis

I recently read The Generosity Crisis: The Case for Radical Connection to Solve Humanity’s Greatest Challenges, written by Nathan Chappelle, Brian Crimmins, and Michael Ashley. I’m always up for a good read about what’s happening in the philanthropic sector and this book did not disappoint.

The authors list several reasons we have all heard about the declining state of philanthropy: donor fatigue, decline of religion, lack of trust in organizations, lack of innovation, taking donors for granted, failure to stay true to the mission, a trend back to transactional giving (this is a big one), failure to engage in meaningful ways, and generally not knowing your donors. These are all valid and a reality for a lot of non-profit organizations.

Then I found it…the book’s golden nugget: that corporations are successfully connecting with consumers based on shared values while nonprofits are struggling to do the same.  This shift, my fellow fundraisers, will make all the difference to the future of fundraising.

Trust

According to the 2022 Edelman Trust Barometer, derived from the Annual Trust and Credibility Survey, businesses now hold a commanding lead as the most trusted source of information. They are ahead of non-profits in the trust factor. However, non-profits are still perceived to be more ethical than corporations, while trust in governments and media has declined for over a decade.

Corporations are succeeding because they can deploy targeted, consistent marketing that aligns their products with consumers’ values and passions. This has led to a cultural shift where people equate buying products that reflect their ideals, like an eco-friendly Tesla, with philanthropy. If this becomes the new definition of giving, nonprofits face a significant challenge.

The fact that companies are winning public trust and setting public agendas is directly related to our generosity crisis. People struggle with their discretionary spending in our consumer society already. Providing yet another way to spend money on ourselves and feel good about it is a win-win all day long for corporations.  But in this scenario, traditional philanthropy is also the loser.

What does that mean for non-profits? 

It means that the water just got murkier, and businesses just joined the competition for donor dollars.  Yes.  Read that again.   Businesses are competing with your non-profit for donor dollars.  Some are doing it outright, like Elon Musk and Tesla saving the environment, or OLG promoting that your gambling dollars are going back into the community, while others are more subtle.  

While some businesses have a long history of philanthropy and social responsibility, the difference now is that these values are becoming a central focus of their marketing and sales strategies. It’s no longer just an afterthought. For the average donor, the line between charitable giving and buying socially responsible products has blurred. And when it comes to marketing budgets, corporations typically have far greater resources than nonprofits.

Big Data is another Big Driver

Market research has a long history in business to drive sales, and that hasn’t changed. In fact, according to Chappell, Crimmins, and Ashley, it has reached new levels with the addition of Google tracking. Big data just collects our interests and habits without us even really thinking about it. Then, they use that data to market products (and content) specifically to you. Big Data has allowed Big Corp to personalize and create a perceived relationship with its customers and followers.

How Does This Concern My Non-Profit

The math says it all. Take the massive resources at corporations’ disposal and add to that growing public distrust. The result? The overshadowing of small and medium-sized nonprofits in their honourable work to improve our World.

More than ever, donors crave the knowledge and feeling that their support makes a difference. Emotions play a pivotal role in giving, and the act of generosity triggers the release of “feel-good” neurotransmitters in the brain. That feels good.  Big Corp is also doing this better than most non-profits are.  If you want to dig deeper into this, I would highly suggest reading Francesco Ambrogetti’s book, Hooked on a Feeling.

In addition, today’s young people are increasingly uncomfortable with face-to-face interactions, making it harder for nonprofits to build trust with them. In fact, a staggering 65% struggle with in-person conversations, and 30% of millennials avoid events for fear of social awkwardness. This shift away from traditional communication poses a challenge for nonprofits: if we can no longer rely on conversations to build trust, how can we cultivate lasting relationships with young donors? It’s clear that a new approach is needed.

At the root of philanthropy, one doesn’t find money but rather relationships. The light at the end of the tunnel is in the form of radical connection.

The Solution: Radical Connection

The concept of radical connection isn’t novel in fundraising; it’s a well-established practice, especially in major gift cultivation. The effectiveness of these principles has even caught the attention of the business world, with account-based marketing (ABM) adopting similar strategies, as mentioned earlier in this article. 

To cultivate long-term relationships with younger donors and maximize their contributions, it’s crucial to re-evaluate traditional fundraising strategies. A successful approach requires understanding these key insights:

1. Embrace Modern Communication: Younger donors expect personalized and efficient communication that resonates with their values and builds a sense of connection with the organization.
2. Understand Motivations: Younger donors are driven by a passion for the cause, a belief in the organization’s impact, or personal connections to the mission.

Chappelle, Crimmins, and Ashley suggest you can achieve radical connection by prioritizing these five essential factors:

• Precision at Scale: Target communications effectively to reach the right donors with the right message.
• Empathy for the Community: Demonstrate genuine understanding and care for the community your organization serves.
• Transparency and Trust: Build trust by being open and honest about your organization’s finances, operations, and impact.
• Individualization and Personalization: Tailor communications to individual donors’ interests and preferences.
• Buy-In to the Mission and Cause: Show donors how their contributions directly support the cause they care about. 

The future of fundraising lies in fostering radical connections.  Particularly with young people.

Many businesses are moving towards a triple bottom line that expands the traditional focus on financial performance to include social and environmental impacts.  By considering all three Ps, Profit, People, and Planet, corporations are creating a more sustainable and equitable business model that benefits not only their shareholders but also society and the environment.  And this is precisely why they are attracting people’s donor dollars to do good.

Conclusion

As the competition for donors’ money becomes fiercer than ever and people are increasingly unsure about the difference between charitable giving and corporate social responsibility, investing in truly understanding your donors and building authentic relationships with them is the solution. This means prioritizing meaningful engagement and shared values over solely focusing on wealth. By understanding what motivates younger donors and adapting your approach accordingly, you can cultivate lasting relationships and unlock their full potential for generosity.