Will the next generation donate differently?

With government aid cuts and fewer people giving to charity, how do NGOs engage younger donors to build sustainable income?

The Great Wealth Transfer is underway. Over the next five years, an estimated €3.5 trillion in Europe and $125 trillion in the US is expected to pass from one generation to the next. So much so, the most significant donors in history will be next generation donors.

Philanthropy is being rebooted. Generation Z (typically born between 1997 and 2012) is widely recognized as the first generation of digital natives. Whereas Millennials (typically born between 1981 and 1996) lean on their personal values when making decisions more than any other generation. This cannot but change what, how and why the next generation donates.

We examine the implications for NGOs.

Big picture, big squeeze

The humanitarian sector faces further challenging times ahead. NGOs are facing the triple whammy of reduced levels of income, climbing costs and greater demand.

Governments are cutting back on foreign aid spending. Record cuts began in 2024, reversing over a decade-long upward trend, with the largest cuts coming from the US (-$1.7 billion, -10%), Germany (-$0.8 billion, -23%) and EU institutions (-$426 million, -13%), the Global Humanitarian Assistance Report 2025 reveals.

The humanitarian sector is facing a significant funding shock in 2025, even before the aid cuts from major donors. Fewer people than ever are giving to charity with donations and sponsorship levels at the lowest level since 2019, a UK Giving Report 2025 published by the Charities Aid Foundation (CAF) finds.

With donor numbers declining yet operational costs rising, this impacts the value of funding. But unlike private sector organizations, NGOs cannot pass on increased costs, leading to a significant funding gap. Needs have grown on such a scale that the gap between what aid costs and what is available is five times more than it was a decade ago.

Affordability, apathy and action

Younger donors are feeling the squeeze. They are tightening their belts in the face of higher costs and potential job losses during a cost-of-living crisis. Affordability can be a barrier to giving when donors under significant financial pressure of their own.

Apathy is another. 34% of 16- to 24-year-olds surveyed in the UK, who had not donated gave a reason that indicated a lack of interest, rising to 38% of 25- to 34-year-olds. This included the answers: “There hasn’t been a charity that’s interested me enough”, “I just didn’t want to”, “It didnʼt occur to me”, “I forgot” and “I don’t particularly care about giving to charity”.

It’s difficult to generalize about any cohort. Especially one that stretches from school children to young people working, training or studying and mid-life adults in their 30s and early 40s. But summarizing for brevity, the next generation of donors want to achieve real impact with their giving.

Gen Z and Millennials are deeply issues-driven and prefer flexible approaches to philanthropy with fewer strings attached, an Indiana University report shows. They are more likely to use a range of tools and techniques when giving, such as social and impact investing, volunteering and sharing their networks. Plus engage with their peers and form networks to share ideas or pool their funds.

Why online awareness drives donations

Younger donors care about purpose and transparency, so NGOs are advised to communicate clearly how they use donations and their impact. Gen Z and Millennials lead all generations in online giving and rely on technology for many aspects of philanthropy.

Invest time in developing your online presence. Tech savvy donors are turning to online resources to inform themselves about charitable causes. Search engine results, social media and organizations’ own websites are the top sources for information gathering, but also for evaluating whether their donations are having the impact they intended.

Engage with younger donors on social media – Instagram, TikTok and YouTube – to explain your cause in creative ways. For example, with short videos, volunteer takeovers and behind-the-scenes looks. Social media can also drive donations; while crowdfunding platforms facilitate peer-to-peer charitable activity, which appeals to the collaborative nature of Gen Z and Millennials.

Donating goes digital

Donating trends mirror those in retail and e-commerce more broadly. Cash usage is declining, particularly after the Covid-19 pandemic. Meanwhile developments in technology and security have boosted digital payments through websites, apps and social media, as well as contactless card and mobile payments in stores.

There’s no global way to pay. We advise our retail, e-commerce and iGaming clients that payment habits are strongly national and contextual. This explains the growth of local or alternative payment methods (APMs). These tend to follow consumers wherever and however they shop – at home, abroad, online or in-store.

Younger donors are unlikely to do something different just to donate to your NGO, so it pays to localize the experience: offer popular local payment methods, display donation amounts in local currency, and support local languages. NGOs are also advised to offer different ways to donate, for example payroll giving, legacies, wills and sponsorships to create regular, recurring, sustainable revenue sources.

Micro-donations, though small, can add up when aggregated. They also reduce financial barriers for those with less disposable income or who prefer digital giving. NGOs should discuss the practicalities of making micro-donations pay with their payment partners, as acceptance costs for low-value payment can be high for cards and traditional methods.

Conclusion

Funding is the key challenge for NGOs everywhere. When asked about their top three challenges, 4-in-5 NGO leaders surveyed by CAF mentioned at least one finance-related challenge.

This highlights the need to build sustainable income generation and encourage not only more giving but more impactful giving. And requires a rethink into how NGOs operate, collaborate and advocate for change. That’s everything from how they harness innovation and digital transformation to how they collaborate and engage younger donors to sustain and grow impact.

1-in-4 donors worldwide supported humanitarian aid and disaster relief, which tends to involve cross-border money flows. Technical alternatives to SWIFT, money service businesses, hawala and cash couriers exist. These newer solutions are typically backed by cross-border expertise and customer focus, which improves the transparency and success rate of international payments.

At a time when the gap between humanitarian needs and available resources globally continues to widen. And when making more efficient and effective use of aid and increasing the amount of aid available has become critical for NGOs, it pays to consider the alternatives.