Donors give at year-end for a variety of reasons, some rational and some emotional. As the final day of the calendar year, December 31 presents donors with a natural and definite deadline for tax planning purposes. If a gift is not made by that date, the donor will not benefit from a tax deduction the following April. If the gift is postponed just one day and is made instead on January 1, the tax benefits will be delayed a full year.
Although donors rarely cite the charitable deduction as the primary motivation for making a gift, it nonetheless provides an important incentive for many of America’s most generous donors. In fact, Giving USA estimates that more than 80 percent of individual gifts are made by taxpayers who itemize deductions when filing their tax returns. For older donors who don’t itemize, a vehicle for giving that is particularly popular at the end of the year is the Charitable IRA provision.
The period between Thanksgiving and New Year’s Eve is also a special time for many. The spirit of the holidays and more time with family and friends create an environment that is conducive to giving and sharing. Many also choose this time to review their finances and share their good fortune with others, including the charitable interests they support.
Keep in mind also that many donors receive bonuses at the end of the year and simply have more resources from which to give during year-end.
Sharpe Group has several tools to help you make the most of year-end appeals this year, including brochures to send to potential donors and a strategic guide to encourage gifts at year-end, featuring a variety of helpful tips and tools including sample communications. For more information about encouraging year-end giving, including the Charitable IRA, click here. ■