Why Gen Z Might Become One Of The Most Charitable Generations Yet

A new study uncovers the state of charitable giving in America—and how young people are being generous beyond expectation.

Inflation is high, financial optimism is low—and yet Americans of all generations are still committed to giving to the causes that matter to them. Just in time for #GivingTuesday, Classy released its ‘Why America Gives’ report to understand the state of charitable donations in America.

This year, almost half (49%) of respondents feel pessimistic about the economy and 77% have had to make changes to their financial habits. Yet despite all this, fully 90% plan to give the same or more to charitable causes—up from 84% in 2021. Overall, more than half (53%) of donors include donations in their budget, and 39% made sacrifices in their discretionary spending in order to have funds to give.

“We see that in times of economic uncertainty and pressure, people will delay unnecessary spending and make reductions and cost-conscious modifications on more critical spend,” says Soraya Alexander, Classy President & GoFundMe COO. “The encouraging survey data we received shows that people are categorizing charitable giving in that second bucket of critical spend.”

What spurs people to give

The study found that there were three main factors in the decision to give: an increase in donor passion, an increase in the need for donations and an increase in the relevance of the cause. Sixty percent of donors give to new causes when they see a pressing need in the news or in response to a timely appeal from an organization, cause, or individual.

In 2022, the top events motivating people to donate were:

1. International human rights crises

2. Climate change

3. Reproductive rights and women’s health

4. Disability rights

“Interestingly, a greater capacity to give did not come to the top of the list,” notes Alexander.

Two donor profiles

In this year’s report, Classy defined two types of donors:

1. Loyal donors: These individuals contributed to the same charitable organization at least three times over the past five years or make a recurring financial donation to a charitable organization.

2. Passive donors: These individuals contributed to charitable organizations through one-off donations but have not shown any consistent pattern of donating in the past five years.

“This year, loyal donors are twice as likely to increase donations in 2022 compared to passive donors and will give, on average, 4x the donation amount,” says Alexander. And apparently the habit of giving grows on you: loyal donors tend to be more open to supporting various causes, not only those they have supported in the past.

Passive donors may not give regularly, but they’re still an important part of the charitable giving landscape. “They are more likely to give directly to an individual who needs direct assistance, but when they do, 59% say they are likely to do their research after giving to learn more about charitable organizations that support that cause,” says Alexander.

Who gives the most?

The study defines two main generational demographics in the realm of charitable giving: traditional donors (Gen X and Baby Boomers) and next-gen donors (Gen Z and Millennials).

Traditional donors, established in their careers and with more discretionary spending capacity, are giving higher amounts to nonprofits. But what’s exciting, says Alexander, is that next-gen donors reported being almost two and a half times as likely to increase their donations this year compared to 2021. “While elder generations are leveling out on their giving levels, we are just seeing the next generation of donors come into their own,” she says.

This is especially true for Gen Zers, who are the most likely to say they donate because they feel it’s just the right thing to do, Alexander says. “The top causes that inspire their giving are the environment and animals, health and disaster relief.” They’re also giving in less traditional ways, e.g., to individuals and grassroots-type movements rather than just established charities. As of September, nearly half (43%) have given to an individual’s personal cause on GoFundMe or a similar platform this past year.

While older generations are giving higher amounts, younger donors are 38% more likely to have made significant changes to their lifestyle due to the economy. “They are feeling the effects of inflation and a potential recession more than older generations,” observes Alexander. “They are willing to cut back in other areas to continue their charitable giving behavior and, in many cases, increase it. They are also more likely than older donors to account for charitable donations in their financial planning. ”

Overall, Gen Z might just become one of the most charitable generations yet. “While they aren’t giving the same amounts older generations are, they have the largest growth potential,” says Alexander. “This shows just how important giving back is to younger generations. They vote with their dollars and are willing to make sacrifices to give to the causes they believe in.”

What giving gives back

Giving of course benefits the charitable cause, but there are significant advantages to the giver as well. In addition to feeling gratitude for the work nonprofits do, donors feel like they’re part of a greater solution. They also report feeling good about themselves as a result of giving.

But what if you can’t give much? Are you excluded from the gift of giving until your financial situation improves? Not necessarily, says Alexander. “Just like Netflix doesn’t ask you to pay annually, regularly giving in small amounts is a great way to have a big impact on the world,” she says. “By setting up a recurring gift, similar to a subscription-type model, you can better budget your expenses and ensure part of that includes giving back to a nonprofit you believe in.”

And of course, giving isn’t just about the money. “You can also get involved with organizations by giving your time and talent, sharing more about the organization and using your influence on social media, and checking with your employer on any matching gift perks they might offer,” says Alexander.

In an uncertain economy, Americans are still coming through for the causes they believe in. “People are unsure of what is to come but they want to help and are very cognizant of increased societal need,” says Alexander. “The survey data validates what we have seen over years of giving behavior: people are incredibly generous.”

Whatever amount you give, giving gives back. And that’s something we can all feel good about.