When donors give: The importance of year-end giving

It’s always a good time to give to charity. Nonprofits depend on donor support to pursue their charitable missions and make the world a better place. 

However, there is a time of year that is the most popular for charitable giving: the end of the year. 

Let’s explore how nonprofits depend on year-end giving for fundraising, and why November and December are so important for donors and their philanthropy. 

How nonprofits benefit from year-end giving 

Americans are incredibly generous. And while donations and grants are given to charities throughout the year, 30% of annual giving is done in December and 10% occurs in just the last 3 days of the year. 

Nonprofits know this, and they plan their fundraising goals accordingly. While a nonprofit will happily accept donations any day, they know that there’s only so much they can raise in July compared to December. Organizations rely on the end of the year to get the donations they need to run their programs. 

While giving increases in December, that doesn’t mean nonprofits can sit back and watch the funds come through. Nonprofits must communicate with donors to continue encouraging year-end giving and increase awareness of their mission. Some people might slow down toward the end of the year, but those at nonprofits will often be working even harder to maximize their outreach during this time period. 

So, if you’ve noticed an uptick in communications from your favorite charities in November and December, you now know why! December is their short window of time to best reach their fundraising goals, and they’re looking to their reliable donors like you to continue their support. 

Why donors tend to give at the end of the year 

Nonprofits respond to the increased giving of their donors in December, but they didn’t necessarily create this timeline. 

So why do donors give more in December? There are several reasons, and while everyone is different, these trends below are the most popular motivators for donors. 

Tax deduction deadlines 

Giving to a charity is a tax-deductible activity. In addition to supporting causes that they care about most, donors often have tax goals they’re trying to reach as well and enjoy the tax benefits of charitable giving. 

However, to achieve their tax goals for a specific year, they need to ensure all activities intended to affect the current year’s taxes must be completed before the new year. 

For example, if your goal is to give enough to charity that you can take a charitable tax deduction, you’ll need to give before January 1st in order for your donation to affect the current year’s tax deduction. 

A spirit of goodwill 

For many Americans, December is a special time of connecting with family and remembering what’s most important. It’s a time of reflection as we consider the state of the world and what we would like the next year to look like, whether that’s less hunger, more support for those affected by disasters, a cleaner environment, or any other cause that sparks the urge to give. 

As this spirit of goodwill stirs us to act, we might volunteer or give to a friend in need. And of course, people give to charities, contributing to the significant increase of giving during this time of year. 

A better sense of budget needs 

Perhaps a donor saved for a trip that didn’t happen or they received an unexpected bonus from their company. When giving is a priority, these types of scenarios can inspire a gift to charity. 

Whether you follow a tradition of giving 10% or just find a little extra in your savings at the end of the year, a donation to charity could make a significant difference for someone. And when you have a little extra, there’s nothing better than sharing it with those in need. 

This is particularly important when you have clear tax goals that a financial windfall could disrupt. By December, donors have a better idea of exactly what assets need to be given to charity to fulfill their financial plan and prepare for the upcoming tax season by giving before the end of the year. 

Should you wait until the end of the year to give? 

We’ve discussed some reasons why a donation in December might make more sense for a donor than another time of year. By December, you have a better sense of your budget and the year’s financial events. 

However, that doesn’t mean you should wait until the end of the year. Vanguard Charitable donors are strategic, thoughtful philanthropists, and they use their donor-advised funds (DAFs) to grant to charities year-round. 

With a DAF, donors can contribute to their philanthropic account when it makes the most sense financially to give. While funds are in their DAF account, they’re charitably invested, offering the potential to generate more dollars for charity. Then donors can recommend grants to charities when the funds are needed most. 

Because of this giving flexibility, Vanguard Charitable processes thousands of grants every week. This has resulted in tens of billions of dollars going to charity since our founding in 1997. 

So don’t feel limited to December. When the timing is right for you and your financial plan to respond to charitable need, you can act, no matter the time of year. 

And if you want to take advantage of the strategic tax benefits of giving while also having the flexibility to support charities year-round, consider opening a Vanguard Charitable DAF as your flexible giving account. 

Conclusion 

Most giving occurs at the end of the year as donors are inspired to support charities and motivated by year-end tax deadlines. However, nonprofits need your support, and you don’t need to wait until December to act. And with a donor-advised fund, you can maximize both the advantages and flexibility of giving.