Over the last week or so, your inbox and mailbox has been filling with requests for donations from non-profit organizations. Oxfam International, Doctors Without Borders, your local food bank and homeless shelter all depend on year-end generosity to meet their budgets.
This is the Giving Season. We give the most this time of year in part because we’re coming up on the holidays, when many religious faiths encourage charity – though for Muslims, the giving season centers around Ramadan, in the fall.
A 2012 Chronicle of Philanthropy study says that deeply religious states such as Utah and Mississippi give an average of 7 percent of their household incomes to charity. In other words — not to bring up horrors of elections gone by — traditionally red states are more generous than blue ones. (If you want to see how your zip code fares, the chronicle has a handy interactive guide here.)
New Englanders? We aren’t that religious. A Pew Research Study from 2014 said just 45 percent of people who live in the Northeast consider religion “very important.” We scored behind all other parts of the country, including the South, where 62 percent of people surveyed said religion was “very important.” We give an average of less than three percent of our household incomes to charity, compared to the national average of 4.7 percent.
Fortunately, non-profit enterprises are not dependent on just New Englanders. The 2015 Charitable Giving Report, from Blackbaud, a software company that specializes in nonprofits, includes donation data from nearly 5,400 U.S. nonprofits. Giving was up 1.6 percent between 2014 and 2015, with the largest growth (5.5 percent) in smaller nonprofits.
Online giving also rose, by 9.2 percent. And most donations — 17.4 percent – came in December. Compare that to the low month of February, with 6.3 percent of donations. Overall, different organizations see different boom times through the year, depending on their focus. After strong collections at the end of the year, faith-based groups, for example, see a lull in giving in January (6.3 percent), as do organizations that focus on K-12 education (5.7 percent). Donations to education-oriented groups rebound in June (10.5 percent).
December giving is even higher online. The Network for Good’s Digital Giving Index says that 29 percent of online givers did so in December – and 11 percent of donations came in the last three days of the year.
By most measures, easily half of all donations are made between October and December. But then, this year may set a new kind of charitable record. The unexpected win of Republican presidential candidate Donald J. Trump has fueled unprecedented donations to organizations such as the American Civil Liberties Union and Planned Parenthood.
So politics are a factor in donations, and religion even more so, but perhaps the biggest motivator for our year-end generosity is something far more temporal – taxes. Jim Klocke, chief executive officer of the Massachusetts Nonprofit Network, says tax law is the primary driver of seasonal giving.
He credits “a natural tendency most of us have to procrastinate, and the effectiveness of deadlines in kind of focusing us and helping us to do the things we want to do, and do the things we need to do.”
The original charitable deduction was created by the War Income Tax Revenue Act of 1917. In addition to raising taxes, the law set charitable contribution limit of 15 percent of a donor’s income, and required that the gift be made to organizations devoted exclusively to religious, charitable, scientific, or educational endeavors. Or to organizations that worked to prevent cruelty to children or animals. The code has changed significantly over the years, but the idea remains the same: There is a financial incentive to being generous.
And as with any unintended consequence, the tax code helps create the end-of-the-year rush for donations – and your crowded inbox. This time of year, nonprofits’ fundraising efforts are directed toward individual donors, not grants from foundations. Recipients of donations are looking for unrestricted donations – or money that can be used however the organization sees fit (within reason, law, and the organization’s bylaws).
“It does make things a bit difficult from a cash flow perspective,” said John B. Brooks, chief development officer at New Haven’s Columbus House, which works with people who are or at risk of homelessness.
In 2012, that year-end push gave rise to #GivingTuesday. Created by the folks at New York’s 92nd Street Y and the United Nations Foundation, #GivingTuesday encourages charitable giving on the Tuesday after Thanksgiving. The date – which this year falls on Nov. 29 — was chosen strategically to follow two consumerist holidays, Black Friday and Cyber Monday, said Klocke.
#GivingTuesday has been especially profitable for larger non-profits (who might have more resources to put the word out on social media), though in the last couple of years, medium nonprofits with budgets between $1 million and $10 million have seen more money coming their way. #GivingTuesday gift amounts to all nonprofits averaged about $150, according to a 2015 Blackbaud report.
Sara Capen Salomons is director of development and communications at Journey Home, a Connecticut-based non-profit that seeks to end homelessness. Last year, said Salomons, 90 percent of their unrestricted donations came from individual donors.
But homelessness – and hunger, and other social ills – exist all year.
Journey Home, in planning their annual gala for February 10, and that, says Salomons, may affect their end-of-the-year giving. Donors may wait until the gala to donate.