Charitable giving isn’t what it used to be. According to the 2021 Giving Report, fewer Canadians are donating to charity. And there’s a “growing giving gap”: Canadians 55 and up give twice as much as those aged 25-54 year olds. Unfortunately, twice as much is still a smaller piece of the pie; the report shows giving is in decline for every demographic.
Despite the less-than-good news, there are positive trends, too. More people than ever are giving online. 2020 broke records for online giving to social services and health charities, especially in the first wave of the pandemic. The question is: will it last? And how do we make sense of the decline? What’s stopping young people from donating? And more importantly, what can we do about it?
Infāque has some ideas (and some expertise to back it up). Joining CSI after incubating through our SE101 program (now Impact Entrepreneurship 101), co-founders Omar A. Butt and Fahad Qureshi have long studied the challenges impacting the philanthropic sector (it’s what led them to create a centralized platform that enables what they call “frictionless giving”). For our latest Lunch and Learn, they, alongside Tristan Surman of My Media Creative, explained how the cultural shift to a ‘platform economy’ is impacting philanthropy and what nonprofits can do about it.
Diagnosing the Challenges Facing Philanthropy
So, when Infāque set out to diagnose some of the problems facing philanthropy, what did they find? “We saw that smaller nonprofits and charities are competing to get access to a limited pool of institutional funds (e.g. governments, corporations, foundations) and don’t have enough resources to engage individual donors,” they explain. “On the flip side, the individual donors are burnt out from unending requests. Donations among young people are low because the giving process is not facilitated by easy to use tech-platforms (like buying or banking is).”
Donor burnout. Lack of trust in the middleman. Overloaded with options. Lack of clarity around impact…These are some of the top challenges keeping donors across demographics from giving back. What’s stopping young people?
As Tristan explained, “young people are not necessarily looking at email in the same way.” In other words, the traditional nonprofit tactic of creating awareness campaigns to drive people to mailing lists to then solicit donations isn’t working. We’re living in a platform economy.
What does that mean? Increasingly, people are moving towards and favouring digital platforms to conduct business. Young people go to specific platforms to bank, socialize, purchase goods, and learn online. They are primed for platform experiences, which is why, as Omar noted, businesses like WealthSimple and Shopify have exploded onto the scene, by “empowering individuals to bypass institutional legacies.” Now, Infaque says, the nonprofit sector needs to catch up.
What Younger Generations Need In Order to Give Back
According to Tristan, “there hasn’t been a public-facing, well-branded and well-marketed platform that serves charitable giving in a way that reflects the experience young people want to have with the products they want to use.” On top of that, data indicates Facebook and Instagram followers don’t convert to donations at the rate that a newsletter subscriber does, further contributing to the decline. What the nonprofit sector needs, Infāque believes, is a centralized platform that creates a giving experience reflective of the online experiences young people are used to having.
According to Infāque, WealthSimple and Shopify grew so rapidly because they did three things right:
- They took a platform-based approach and made it frictionless
- They prioritized transparency
- They made the user experience empowering
Modelling this approach, Infāque is partnering with on-the-ground nonprofits to build a centralized platform with a cause-focused approach. Omar and Fahad’s research showed that what young people want is a giving experience that is experience-focused, cause-focused, and engagement-focused. “Instead of taking an entity-based view of a single nonprofit or charity and trying to approach individuals with a lot of information, we are trying to attract individuals at a cause-level,” Omar explains.
Young people expect easy, inclusive and transparent services. The platform empowers young people to choose the causes they care about and direct funds that way. Contributors can also review where their money is going through a tracking system, review the impact of each dollar they donate, and decide to make specific crowdfunding campaigns a priority based on urgency and need.