The Holiday Giving Surge: Why Philanthropy and Donations Peak in the Last 3 Months of the Year

As the calendar winds down, nonprofits and philanthropic causes see a significant surge in donations, with December 30th and 31st consistently ranking as the two biggest giving days of the year.

This phenomenon is driven by several key events and factors, each contributing to the heightened generosity witnessed at the year's end. Let's explore these in detail.

1. The influence of Giving Tuesday

Giving Tuesday, celebrated on the Tuesday following Thanksgiving and Black Friday, has become a global movement encouraging generosity. Initiated in 2012 by the 92nd Street Y and the United Nations Foundation, this day harnesses the collective power of social media and collaboration. Here’s why it’s impactful:

• Coordinated outreach: Nonprofits across the globe participate in well-coordinated campaigns, leveraging email marketing, social media, and other channels to reach potential donors.
• Matching gifts and challenges: Many organizations and corporations offer matching gifts or challenges, doubling or even tripling the impact of individual donations.
• Community Engagement: The spirit of community and giving is heightened as people share their giving stories and encourage others to participate.

MORE: A nonprofit’s guide to donor prospecting this Giving Season

2. The holiday spirit

The holiday season, stretching from Thanksgiving through New Year's, naturally inclines people towards generosity. Several factors contribute to this:

• Emotional connection: The holidays are a time of reflection, gratitude, and connection with family and friends. This emotional atmosphere often extends to a broader sense of compassion and a desire to help others.
• Cultural and religious traditions: Many cultures and religions emphasize giving during the holiday season. For instance, Christmas, Hanukkah, and Kwanzaa all have elements of charity and helping those in need.
• Gift-giving mindset: As people shop for holiday gifts, they are often more open to spending, including on charitable donations. The idea of giving back complements the overall spirit of the season.

MORE: How relationship mapping helps nonprofits find donors

3. End-of-year tax considerations

The end of the calendar year also marks the end of the fiscal tax year in the United States, which has significant implications for donors, especially those making substantial contributions.

• Tax deductions: Charitable donations can be deducted from taxable income, reducing the amount of taxes owed. This is a crucial incentive for many donors, particularly high-net-worth individuals and corporations.
• Financial planning: Donors often review their financial situation at year-end to maximize tax benefits. Making donations before December 31st allows them to claim the deduction on their current year's tax return. For some, this period is part of a broader strategy of managing their finances, ensuring that their philanthropy aligns with their financial goals.
• Year-end bonuses and windfalls: Many individuals and businesses receive year-end bonuses or experience windfalls that increase their taxable income. Donating a portion of these funds before the year's end can be an effective way to reduce overall tax liability while supporting meaningful causes.

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Leverage the year-end surge in your donation strategy

The confluence of Giving Tuesday, the holiday spirit, and tax considerations creates a perfect storm for charitable donations in the last three months of the year. For nonprofits, understanding these motivations is key to optimizing fundraising strategies and engaging donors effectively.

As individuals plan their year-end contributions, they not only benefit from financial incentives but also contribute to a culture of generosity that has a lasting impact on communities and causes worldwide.

By harnessing the power of these factors, nonprofits can continue to inspire and mobilize donors, ensuring that the season of giving truly makes a difference.

MORE: Why a nonprofit’s reputation can make a difference during Giving Season

Maximize Your Donation Potential with LexisNexis®

To ensure your nonprofit is ready to maximize your potential for donations this end-of-year giving season, be sure to check out Nexis® for Development Professionals. Our leading development and donor research solution helps you find new donors, validate donor and prospect contact information, and learn more about your existing donor database to create new opportunities for giving. Powered by over 86 billion public records and over 90 million Donor Profiles, Nexis for Development Professionals helps nonprofits everywhere move their mission forward with data that makes a difference.

For other nonprofit needs, check out all the offerings from LexisNexis that can help you this giving season on our Nexis® for Nonprofits page.