Pelzel analyzes trends in non-profit donations

By Rachel Aragon

Published on Wednesday, May 11, 2011

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The biggest challenges non-profits face today are “earning trust and investment,” Senior Vice President for Advancement Carolyn Pelzel said in a lecture in Silsby Hall on Tuesday evening.

Speaking to an audience of trustees for non-profit organizations in the Upper Valley, Pelzel said she believes that non-profit organizations could be doing a better job of impressing donors. “We have to work harder than ever to earn people’s trust in these turbulent times if we want to see results,” she said.

Pelzel questioned why annual giving to charities in the United States has increased from $1.7 billion to approximately $304 billion over the past 90 years, but the percentage of individuals’ disposable incomes going toward annual giving has recently declined. “Because we are passionate about the mission, it’s OK to execute poorly,” she said, quoting College President Jim Yong Kim on the shortcomings in the non-profit sector’s outlook. Pelzel also argued that philanthropy is becoming more strategic than ever and said that “the common aim for the non-profit sector must be to mobilize resources towards a specific goal.”

The highest motivation for giving to educational institutions is primarily a belief in the cause, Pelzel said. The second most influential factor is loyalty to the institution, but colleges and universities cannot solely rely on alumni donations motivated by nostalgia, she said.

“Educating leaders for the next generation prepares people to give back and gives people the capacity to think broadly about human issues,” she said.

Tax incentives are not the driving motivation for individuals to make donations, but they do determine the amount donors give, according to Pelzel.

Institutions like Dartmouth also have to overcome the challenging notion of “perceived wealth,” Pelzel said. Dartmouth receives fewer donations than local charities due to the perception that Ivy League schools are less in need of funds than other non-profits, she said.

Donors may also be concerned that their gift to colleges will not be as productive as donations towards charities that feed impoverished children or shelter domestic abuse victims, Pelzel said.

“People would give more if they could measure the impact of their annual gift,” Pelzel said. “We need to make the case that we are a good investment, and we need to think about how do we give donors a sense that a few thousand dollars really makes a difference.”

Being transparent with the organization’s support base, setting tangible goals and articulating an approach for reaching those goals is imperative for all trustees in the non-profit sector, she said.

With over 1.2 million non-profit organizations in the United States, “every non-profit needs to have clear objectives where they can ultimately measure their results,” Pelzel said.