Updated: Oct 29
Nonprofit organizations are always seeking new ways to engage with potential donors and secure support for their missions. As Millennials and Gen Z grow into a significant portion of the philanthropic landscape, nonprofits must adapt their strategies to capture the attention of these younger generations. One promising avenue is through the world of non-fungible tokens (NFTs), unique digital assets secured on blockchain networks that have the potential to revolutionize the way nonprofits connect with and appeal to younger donors. This article will explore the reasons why NFTs are the answer to reaching Millennial and Gen Z donors for nonprofits.
As Millennials and Gen Z grow into a significant portion of the philanthropic landscape (Millenials to make up 70% of the workforce by 2025 and Gen Z estimated at 27%), nonprofits must adapt their strategies to capture the attention of these younger generations. Statistics show that 84% of millennials already regularly give to charity and nonprofits, an average of $481 a year. They make up a large portion of today's donor base, and were the generation to contribute the most financial aid during the COVID-19 pandemic. Almost three out of four young adults have sent financial aid to family and friends, while 46% report personally donating to crowdfunding campaigns.
Source: Development Guild
Millennials and Gen Z, born between the years 1981 and 2012, are digital natives who have grown up with technology and the internet. They are comfortable with digital assets and the concept of digital ownership. NFTs resonate with these generations because they allow for the ownership and trading of digital art, collectibles, and other assets in a way that was not previously possible.
A Socially Conscious Generation
Millennials and Gen Z are well-known for their commitment to social issues and their passion for making a difference. By aligning NFT initiatives with the values and causes that these generations care about, nonprofits can attract their interest and support. For example, organizations could create limited-edition NFTs that raise awareness about pressing issues, such as climate change, social justice, or mental health, and donate the proceeds to relevant causes.
These younger generations are drawn to activism for personal reasons and know their futures rely on social justice. By taking them seriously and believing in their ability to change the world, nonprofits can engage them more effectively. People give to people, and people respond to peer interaction – this is particularly true for younger generations.
Millennials and Gen Z are the most racially and ethnically diverse generations in US history. They are also more educated and progressive than older generations, which influences their giving behavior. According to research by global management consulting firm McKinsey, while Generation X consumes to show social status, millennials consume for experience, and Generation Z consumes for uniqueness.
Fostering Community and Collaboration
NFTs can facilitate the formation of communities and collaborations around shared interests and passions. Millennials and Gen Z are known for their desire to connect with like-minded individuals and engage in collective experiences. By participating in NFT-related communities, these generations can forge new connections, share knowledge, and collaborate on creative projects that support nonprofit causes.
Gen Z and Millennials see the world in terms of connection, united by shared interests and values, not physical proximity. They understand the concept of a global community and are good at making connections with people they might never meet. The pandemic and the shift online have helped them connect with people who share their values and find diverse role models.
Instead of donating to large, faceless organizations, millennials and Gen Z-ers are more interested in supporting small, local charities that they can easily connect with. They are also more likely to donate to causes that their friends and family are passionate about. This trend towards collaboration is also being seen in the world of NFTs, where artists, collectors, and enthusiasts collaborate and support each other through various platforms and communities.
The Social Currency of NFTs
Millennials and Gen Z place great importance on social currency, using it for self-expression and online interactions. NFTs, showcased on social media platforms and virtual spaces, serve as a new form of social currency. Nonprofits can create NFTs that encourage sharing and discussion among supporters, fostering community and connection.
Like fashion and traditional art, Gen Z uses digital art to express their personalities. A study by Razofish and Vice Media Group found that 30% of Gen Z gamers are willing to buy branded skins or wearables for their avatars, indicating their desire to cultivate a virtual image. Through NFT collections, they create unique digital identities, allowing for self-expression and a sense of individuality.
The Potential for Financial Gains
While nonprofits primarily aim to create social impact, the potential financial gains from NFTs also attract younger donors. Millennials and Gen Z are often seeking wealth-building opportunities. By investing in NFTs associated with nonprofit initiatives, they can support causes they care about and potentially benefit from the appreciation of these digital assets.
The emerging Web3 economy enables individuals to profit from minimal assets through fractionalization, digital ownership, and voting rights. Gen Z communities actively participate in projects, seeking a more decentralized web where user data is not monopolized, and financial power is not centralized. This new economic model empowers them to co-construct a more equitable future.
The Gamification of Fundraising
NFTs have become an integral part of the gaming industry, with many games featuring NFTs as in-game items, collectibles, and characters. Nonprofits can leverage this trend by incorporating NFTs into gamified fundraising campaigns, offering unique digital rewards and experiences to donors. This approach appeals to Millennials and Gen Z, who are familiar with gaming and virtual goods.
The Desire for Authenticity and Trust
Raised with easy access to information, Millennials and Gen Z expect transparency and are unafraid to ask for it. In philanthropy, they want to know their donations are being used effectively and are not interested in supporting opaque or secretive organizations. Blockchain technology's ability to balance the distribution of wealth and power aligns with this generation's desire to create a better world.
Blockchain technology, which underlies NFTs, provides a transparent and secure way to verify digital asset ownership and provenance. Millennials and Gen Z value authenticity and trust, making blockchain technology an ideal framework for engaging with digital assets.
In summary, NFTs offer a unique and innovative way for nonprofits to engage with and appeal to Millennial and Gen Z donors. By leveraging the cultural relevance, social currency, and technological appeal of these digital assets, organizations can create new opportunities for fundraising, donor engagement, and community-building.
The next step would be to figure out how to go about building an NFT campaign to raise funds for your organization. Thats where Panxpan comes in. We help nonprofits, schools and businesses use NFTs to raise funds. We manage the NFT creation and distribution process, creating of the fundraiser page so donors can learn more about your cause & donate, and even enable you to create unique digital and offline experiences that are gated to the NFTs to make the NFTs more valuable. We'd love to help you tap into the Millenial and Gen Z audiences in your next fundraising campaign through NFTs. You can learn more about our NFT fundraising platform here or start your next NFT fundraiser here.