Why Millennials Are the Ideal Target Market for Crowdfunding
When it comes to crowdfunding, “the more the merrier” is the principle characterizing most campaigns.
After all, it is relatively simple logic: the greater the amount of people who have viewed your crowdfunding page, the more potential donors you have, and the greater the likelihood that your page views will translate into actual donations.
Fortunately (or unfortunately), there is more science behind the art of crowdfunding than what first meets the eye. Although crowdfunding is a strategy that was created to cater to the masses, the masses are not all created equal. Inevitably, there are certain market segments that will be more responsive to crowdfunding than others – namely, the millennial population.
Accounting for roughly one fourth of the US population, millennials (individuals aged 18 – 35) may be the ideal target market for enterprising crowdfunders. Having grown up with technology, millennials have been bombarded with branded advertisements of every form since an early age. During that process, they have become quite jaded with the commercialization process, easily writing off cliché large scale marketing as insincere corporate strategies and artificial business schemes. That’s where the attraction of crowdfunding kicks in.
At the end of the day, crowdfunding is a relatively personal process that requires grassroots marketing and peer-to-peer communication (think social media sharing, word of mouth marketing, etc.). For millennials, it’s a refreshing change from overdone television commercials asking them to call a 1-800 number and “donate now.” Not to mention that millennials are constantly connected to the web, and prefer using online channels to make charitable donations.
With that said, how exactly does one go about creating a “millennial-focused” crowdfunding campaign? Research has shown that millennials are more likely to donate to nonprofit organizations and support corporate altruism than the preceding baby boom generation. In a social media age where the causes that millennials choose to support are increasingly visible to the public, those decisions are becoming part of how they shape their identity. The question millennials are asking themselves is, “What does my financial contribution to this cause say about me, my beliefs, and my values?”
When creating a crowdfunding campaign, consider carefully what you are asking donors to identify with. The most successful millennial-targeted campaign causes will be framed in a manner that millennials can easily relate to. In a survey of 2000 millennials conducted by Mintel, the social issues that millennials ranked highest in importance are education (38 percent), poverty (26 percent), and public safety (21 percent). Environmental issues and mental health issues followed closely behind in perceived importance at 21 percent each. Therefore, incorporating aspects of these issues in your crowdfunding campaign could be integral to attracting more donations from a millennial audience.
It is also important to remember that it is unrealistic to expect large donations when targeting millennials as campaign donors. According to data from the US Census Bureau, millennial households make up the largest percentage of Americans earning less than $25,000 annually, and the smallest percentage of households making over $150,000 annually. Additionally, millennials tend to give smaller donations to various organizations rather than contributing a single large sum to one cause or mission.
While this demographic sector may be more willing to donate than previous generations, their individual contributions will likely be limited by their financial capacity. It is their cumulative giving power that makes them an attractive market for crowdfunding.
Going forward, millennials will not only carry the crowdfunding movement, but also become a decisive market segment in the workforce as the baby boom generation slowly phases out. As that transition plays out, the question no longer becomes if they will be a good market to consider, but how and to what extent they should be part of your crowdfunding campaign.