Courting Tomorrow’s Elderly

Charities revamp fund raising to reach baby boomers, but some groups are slow to make changes

Beech Acres in Cincinnati overcame one serious threat to its survival 20 years ago by transforming itself from an orphanage to a charity that helps abused kids. Now it is fighting hard again to insure that it will be able to reach donors in the new millennium.

The first sign that the charity’s fund raising was in jeopardy came when direct-mail returns started dropping a few years ago. More and more of the organization’s loyal donors — largely people born before World War II — were dying each year and weren’t being replaced by younger people born in the post-war baby boom. Beech Acres used to be able to send out mass direct-mail appeals stressing the dire needs of poor children and get a good response from people who remembered food and other shortages during the Depression and World War II. But baby boomers demanded proof that the charity was deserving of a gift.

The baby-boom generation, many charities are learning the hard way, is far more skeptical and demanding than their parents. Unlike the older generation, the highly educated boomers do not give to charity out of a sense of moral obligation or because an organization has a good reputation, fund-raising experts say. Instead, boomers tend to give to causes to which they have direct ties or those from which they or their friends and relatives have directly benefited.

So instead of simply changing its mailings, Beech Acres hired Roseann Hassey, a marketing expert, to head its development operations, and under her direction, it has adopted new strategies usually associated with corporate marketing.

After conducting “focus groups” to determine what potential donors wanted, the charity decided to expand its ability to help people in their 30s and 40s by offering them new products and services, such as a 400-page directory of child-care sources, businesses that specialize in children’s products, and other useful information. The charity will also offer classes on child rearing.

While it is too early to tell if such services will bring in more gifts from baby boomers either now or in later years, Ms. Hassey says she is confident that they will.

“I think we’ve cracked the case,” she says. “Boomers give to causes they are personally involved in, and we’re developing services that help them. We’re looking at philanthropy as a full-service program, rather than just asking for money or time and not providing anything in return.”

She adds, “This is a two-way street.”

Many fund raisers who have studied demographic trends and developed forecasts of what giving will be like when the more than 70 million boomers start reaching their retirement years predict other differences from the way fund raising is conducted today. The evidence suggests that some techniques, such as direct mail and special events, may go out of fashion or require big changes, while planned giving will grow even more popular than it is now.

A key reason fund-raising techniques and approaches need to change is that many of the boomers will not necessarily be in a position to give much money away when they reach their 60s and 70s. They have waited longer to start families, buy homes, and save for retirement than their parents did. What’s more, many boomers will still be supporting children and elderly parents for years to come, even after they retire. As a result, they will need to hold on to money and other assets well beyond age 60.

It is not just the demands on the boomers’ finances that worries charities, however. The Vietnam War and the cultural upheavals of the ‘60s and ‘70s made the baby boomers far more skeptical of all social institutions — including some charities — than their parents were, and they have demanded more personal attention before becoming willing donors.

A few charities are already acting in response to those challenges. To court baby boomers, The American Technion Society-Israel Institute of Technology, for example, is offering them substantial benefits now and not expecting much in the way of donations anytime soon. The New York society, which supports a scientific and technological university in Israel, raises some $100-million annually, but most of that money comes from donors in their 60s and 70s, notes Jerry Kleinman, director of campaign services.

One such effort is the HaMagal Leadership Development Program, which Mr. Kleinman helped found three years ago. The charity named the program after the Hebrew word for circle, to suggest the idea that young people were being brought into an unending cycle — with the baby boomers taking over for the older donors.

Leaders of the Technion society seek out successful people in their 30s, 40s, and 50s and offer to pay their expenses for a trip to Israel during which they learn about the charity’s work. In return, the potential leaders are asked to give to the charity’s fund-raising campaign.

Generally, they are asked for a commitment to give $5,000 each, but there is no requirement about when the money is due or how it should be paid. So far, 60 people under age 55 have pledged $5,000 or more.

Some charities have sought to attract baby boomers by redesigning special events that were once used primarily for fund raising and turning them into ways to show off their services.

The American Cancer Society started making changes after it held special meetings with people born after World War II and asked them what they wanted from the charity. The results of the meetings prompted changes in such events as the group’s annual walkathon in Boston, which has evolved from an event that raised money to fight all types of cancer to one that focuses solely on breast cancer. While other types of cancer are bigger killers, breast cancer is one of the most-feared diseases among boomers, the society learned. What’s more, many believe that it has not received enough attention from researchers.

The charity now uses the walkathon to impart information and offer other benefits to participants. Medical experts make presentations, breast-cancer survivors give speeches, and the charity sets up a spot along the course where people can place a message to remember a friend or family member who died of the disease.

Redesigning the walkathon to provide such benefits has yielded an immediate payoff. Last month, the event netted $2-million, up from just $130,000 before the changes were made.

“We’re onto something here,” says Becky Burkett, national vice-president for income development at the Cancer Society. “And our results are bearing this out.”

Some charities have taken an opposite tack with special events, discarding them entirely out of concern that such activities do not do enough to woo baby boomers. The Arizona Children’s Foundation, which provides services to abused and neglected kids in Tucson, has canceled its walkathon altogether.

Leaders of the charity say that even though the event drew many baby boomers, it did not do enough to get them involved in a way that was likely to lead to future donations.

“Everybody can relate to cancer, because everybody knows someone with the disease and it affects them in their own lives, either directly or indirectly,” says Barbara Levy, executive director of the children’s foundation. “But few of the baby boomers we want to reach, those who have the ability to give, know an abused child. So it’s a remote, less-personal cause.”

For such causes, a big event for the public is often not the best way to find baby-boom donors, she says. “I want an event that’s going to engage someone and involve them in my organization,” she explains.

To replace the walk, the foundation has started holding an alternative event: a buffet dinner for couples who pay $300 to attend. Ms. Levy says that the dinners do a much better job of bringing in boomers who have the means to give. They also provide a setting in which the charity’s leaders can meet personally and talk about their work with a select group of potential supporters. An added benefit: The dinners are much less expensive than the walk and take less time to plan.

After the dinners, board members call couples who probably have enough money to make a large gift. The trustees thank them for attending, invite them to other functions, and, in some cases, ask them for money. So far, Ms. Levy says, about a quarter of the couples who have come to the dinners have given $1,000 or more.

Such personal attention may pay bigger dividends for the Arizona foundation as the boomers grow older, but charities may need to do much more to persuade tomorrow’s elderly to make gifts of substantial size.

While the baby boomers as a group are expected to inherit an estimated $10-trillion from their parents, experts say that many individuals won’t get much more than $10,000. That amount won’t go very far — especially with projections showing that many elderly boomers will spend as long as three decades in retirement after they leave the workforce.

“It will make things much more complicated,” says Jane Carlson Williams, a fund raiser at the Lakeside School, a private high school in Seattle. “You will need to be more patient, and that’s counter to our fast-paced way of fund raising.”

The financial constraints will probably cause bequests or planned gifts, which allow donors to part with their money slowly, to grow much more popular, she says.

Barbara Marion, a San Francisco fund-raising consultant, says that non-profit groups should look for ways to educate baby boomers about planned giving, even though some charities believe that it is a waste of time to focus planned-giving efforts on anyone younger than 70.

If nothing else, says Ms. Marion, baby boomers can influence their parents to make planned gifts, and that process, she says, may encourage them to start thinking ahead about their own estate plans.

One of Ms. Marion’s clients, St. Mary’s Chinese Schools and Center in San Francisco, which runs a bilingual day school, has had promising results from holding planned-giving seminars in both Cantonese and English. The meetings are designed for baby boomers who have students in the school and want to help their parents — many of whom are Chinese-speaking, first-generation American citizens — plan their estates.

While some school leaders thought it would be better to hold the meetings for elderly Chinese alone, “we’ve had much better representation from about 40 people in their mid-30s and 40s,” says Kathleen Kearney, a fund raiser at the school. Already two meetings held this fall have brought in one trust worth $107,000, from an elderly widow whose children attended and persuaded her to make the gift.

Such efforts are beginning to show charities what works best with young donors, but most organizations have not done what it takes to prepare for the aging of the boomers, says Judith Nichols, a consultant in Lake Oswego, Ore., who has written several books on population trends and how they affect fund raising.

Many charities have never thought of the people who use their services as potential “customers” or donors. Instead, they turn to outside sources of funds, such as foundations and government, for money to provide services. While needy clients at some charities may never be able to give, experts say, in many cases they or their families have enough money to make a donation.

Temple University’s Center for Intergenerational Learning may soon rethink its reluctance to seek money from its clients. The center runs a program called Time Out that offers people who are taking care of sick parents, relatives, or elderly friends a few hours of respite each week. The center has never asked for a donation from the people who get the time off — many of whom are baby boomers.

“We separate the people we give services to from the people we get money from,” says Nancy Henkin, executive director. “I’ve never seen our client base as possible donors. We probably should get into asking them for a small annual donation.”

Ms. Henkin’s problem is one that many charities will have to grapple with soon. While many are eager to seek out information about baby boomers, when they find out what the changes will mean for fund raising and other operations, “there’s a major disconnect,” says Karen Heller Key, a Nashville fund-raising consultant.

“Whenever there is a huge change coming, as we see with the baby boomers,” she says, “groups keep trying to do what they’ve done before, hoping it will work.