Australians are a generous bunch.

Four in five of us give financially to charities, according to a recent report by market researcher McCrindle.

The same report shows that in 2023, not-for-profit organisations received $13 billion in donations and bequests, while an estimated four million Australians volunteered their time.

But in recent years, the charity sector has been forced to reckon with the fact that their most devoted givers, Baby Boomers and the Silent Generation, are growing older and passing away.

And amid a cost-of-living crisis and as younger givers become increasingly hard to reach, there are fears the gap won't be filled.

So, will younger Australians step up to support those in need? And what will happen if they don't?

Who gives to charity in Australia?

It's no secret that older Australians are behind most of the charity sector's revenue.

McCrindle's research, as well as data from the Australian Institute of Health and Welfare, shows that the older you are, the more likely you are to donate. Older donors also tend to give more, on average.

The reasons why are fairly straightforward, explains Dan Wilson, director of fundraising consultancy The Data Collective.

"It doesn't matter what type of giving, the older the donor, the better the giving behavior," he says.

"For people who are over 55, they've paid off their mortgage, their kids are looking at moving out of home, they're well established financially — that's why we tend to see those older donors be more generous or more likely to give.

However, charities can't afford to ignore younger Australians.

"Charities have to make investments in future revenue," says Katherine Raskob, CEO of Fundraising Institute Australia.

"They have to engage younger donors in their causes, even though they know that the revenue is not going to come in the near future.

"And all the while, they've got to keep engaging their traditional older donors, because that's where the revenue is now."

The problem is that those two cohorts require radically different approaches.

"Younger donors really are cause-aligned, much more so than Baby Boomers," Ms Raskob says.

"They are very interested in world affairs and aligning their activities with their values.

"They are a bit more sceptical; they want to make sure that they're making a really big impact with their dollar."

Alexandra Catling, 28, has been supporting children's education charity The Smith Family for several years.

"I was a Smith Family-sponsored student from early primary school up to and including university," she says.

"[But] I'm not donating to the Smith family because they sponsored me; I'm donating because I really believe in the work that they do."

Dr Catling undertook a PhD in plant ecology and now works as a postdoctoral research fellow at the University of the Sunshine Coast. 

"As soon as I started working, I was eager to sponsor a child myself … It was a goal I set for myself; I was really looking forward to being able to do that," she says.

According to a report from fundraising consultancy More Strategic, younger donors are more likely to volunteer their time or take part in fundraising events.

Dr Catling fits into this category too. She volunteers once a week at a school to provide homework help and mentoring through The Smith Family's Learning Clubs, which she finds "incredibly rewarding". She says her friends, especially those who aren't able to contribute financially, support their chosen causes in similar ways.

"My friends will do some sort of running or push-up challenge, raising money by asking for one-off donations from friends, rather than committing to [donating] every single month."

Ms Raskob says most younger givers prefer to donate sporadically and to smaller charities or appeals on platforms like GoFundMe. 

"That's quite a different approach to giving than their parents and grandparents, who are mostly giving to well-established charities and who have that sort of regular-giving mentality," she says.

'A lot of competition for a dollar'

Australia has an incredibly competitive charity sector. There are 60,572 registered charities — that's one per 439 people.

If charities want to secure their future, they need to reach new donors early and effectively.

"There's a lot of competition for a dollar and also a reduction in government funding for charities. Those two things mean that they have to work even harder to tell the story of the impact that they're going to make with a donation," Ms Raskob says.

The latest data from the Australian Charities and Not-for-profits Commission shows the cost of living has taken a toll, as increased expenses have outpaced revenue and donation rates have slumped.

McCrindle's report also found that 45 per cent of survey respondents said cost-of-living and housing pressures had negatively affected their ability to give.

The trouble is, future givers are getting harder and harder to reach.

For decades, the charity sector has relied on mail, phone calls and face-to-face interactions like door-knocking or stalls in shopping centres. These methods, while expensive, have proven effective with older demographics.

But Dr Catling says they're unlikely to work on her age group.

"Me and all my friends, as far as I know, are terrified of those people who attack you asking for money at the mall … We will do anything to avoid them," she says.

"Cold calls as well — absolutely not. We're never going to give our details over the phone to a cold caller."

Statistics from More Strategic's study bear this out, showing that young Australians are "much less likely" to engage with mail or telemarketing from charities and respond far better to social media advertising.

Ms Raskob says this means charities have to pivot to different ways to connect with future givers.

"Charities need to have a two or three-track approach for younger donors. They have to start thinking about the causes that are really going to align with the Gen-Z values and principles … The communication style is different.

"It's quite obvious that Gen Z, especially, use all kinds of social channels that their parents or grandparents didn't use … A charity has to be omnipresent, which means they've got to be in every channel."

New fundraising frontiers

Digital outreach has its limitations, however.

Mr Wilson says that according to the data he works with, email tends to be less effective at generating cash donations than phone calls or mail.

"When you send one letter in an envelope, you might see response rates anywhere ranging from 5 to 25 per cent," he says.

"Things like email tend to be much lower. It would take seven or eight different emails across a period of time to solicit that same kind of response rate from an audience."

Plus, there's the problem of follow-through.

"It's easy to miss those things, whereas something like a letter in an envelope sits around on your kitchen table or on your fridge for a month, so there's this constant reminder that you don't get with email," Mr Wilson says.

Some charities have pivoted to social media to attract younger donors.

"The digital space is an area where I think there's still a lot of learning going on for a lot of charities," says Andrew Martin, co-founder of The Fundraising Agency, a not-for-profit consultancy that specialises in digital fundraising.

His work focuses mostly on using Facebook for lead generation — that is, engaging potential regular donors and then following up with a phone call to seal the deal.

And he says it's increasingly effective.

"Regular giving acquisition in Australia is still heavily driven by face-to-face door knocking — that's still where the major volume happens," he says.

"But the next level of volume comes from phone, and that's largely driven by digital driving phone leads for conversion."

Plus, Mr Martin says social media allows fundraisers to be "a little more granular in how you target" and to adapt advertising to what will resonate best with potential donors.

"You get real-time insights around what people are engaging with and you can react more quickly to it," he says.

The great wealth transfer

These existential questions about the future of charitable giving come ahead of a looming intergenerational wealth transfer. Australia's over-60s are expected to hand over $3.5 trillion to younger generations in the next 20 years via gifts and inheritances.

It will mark the largest wealth transfer in Australia's history.

But Ms Raskob says just because wealth is changing hands, "it doesn't mean charities will get a part of it".

"It's really important for charities to invest in gifts-in-will fundraising and a lot of charities can't afford to do it," she says.

"The ones that have been investing in that kind of fundraising, who engage with donors all along their life journey, can benefit from that wealth transfer. But charities who don't invest in that … will probably lose out."

Mr Wilson agrees, but says these conversations are sometimes "outside the scope of the charity sector".

"The conversations that individuals need to be having with their parents and the people they know of that generation [are], 'Do you need to hold on to all that wealth? Would you give it to causes that are going to benefit now, rather than waiting till you pass away?'" he says.

Despite the challenges facing the fundraising sector, he is optimistic for the future.

"Things move in cycles," he says.

"I think you'll have a new generation of people who choose and want to give."

Mr Martin agrees that while "the mechanics will shift", the act of giving will "never disappear".

"We increasingly struggle with everything that goes on in the world, there's always a crisis ... If [we] dwell on, it doesn't take very long to feel quite flat about it. 

"But that's where we're looking for ways to go, 'This is what I can do'.

"And every time one of us makes a decision to do that, to say, 'OK, I'm putting my shoulder to the wheel' … [our] world becomes better."