It’s coming – Black Thursday – Tax Deadline Drives Donation Activity on December 31 – are you ready? | npENGAGE

It’s coming – Black Thursday – Tax Deadline Drives Donation Activity on December 31 – are you ready?

By on Dec 17, 2009


Back in February there was a great deal of discussion and debate on the role of tax-deductions in charitable giving around proposed changes in the tax code. Some argued that giving is primarily altruistic and tax breaks play only a small role in the decision to give. Others argued it is very important and billions of dollars could be at risk if the government placed a limit on charitable giving deductions. Both the The Chronicle of Philanthropy and The NonProfit Times covered the story. Today, Stephanie Strom, Philanthropy reporter for The New York Times did a nice article around data from the Convio system that shows, at least behaviorally, the year-end tax deadline makes a big difference in online giving volume and revenue.

While the truth is probably somewhere in the middle, what is clear is that donor behavior in the last week of the year, particularly on the last day of the year, seems to suggest that getting that last gift in under the tax deadline is extremely important.

We looked back at online giving trends in the last week of the year, compared to the rest of the year and found that on 12/31 there was more than 13 times the number of donations and more than 22 times more funds raised than daily averages the rest of the year.

Here is some other interesting data that seems to confirm, at least behaviorally, that altruism and the tax-deduction go hand in hand (or hand in wallet).

  • In the last week of the year (from 12/25 – 12/31), clients processed 4.9x the number of donations that they did in an average week.

  • The amount raised was an even larger lift (7.7x the amount raised in an average week) indicating that the average gift size was also larger (57% larger).

  • While every day in the final week of the year (including Christmas) saw an increase in average donations, the last 3 days of the year showed the most dramatic increases:
         1. 12/29 = 5x donation count and 7.8x in funds raised,
         2. 12/30 = 7.5x in donation count and 11.5x in funds raised,
         3. 12/31 = 13.2x in donation count and 22.5x in funds raised).

  • In the last week, the top 10% of organization saw >10x increase in number of donations and >15x increase in funds raised.

Bottom line is that the last week of the year and in particular the last day of the year is huge for online fundraising.  About 90% of organizations take some advantage of this phenomenon with the top third of organizations raising 10x or more in the final week when compared to an average week. 

Dave Hart, our CTO offered me these observations about the data: The 10x lift would be a good target for an end of year fundraising campaign (a solid B grade), and an organization should not stop fundraising until the very end of the year.  An A grade for an end of year campaign would be 15x the normal weekly volume raised in the final week of the year.

This type of data is one of the many benefits of providing our nonprofit clients software and service through the SaaS model. It also can help provide insight into what your organization can and should be doing in the last week of the year. It also shows the need to have a donor database that allows you to segment based on the date of the gift, so that you can communicate, making sure you are top of mind on the last day.

It’s not too late – here are some tips from some of our experts that can help you make the most of the last week.

One final thought and question. I worked at an organization that was very active in water conservation.  One of our experts would always, and I mean always, get upset if people conserved water “for the wrong reasons.”  We had some deep and interesting discussions about that. My guess is that most people donate to your organization for more altruistic reasons over “just” the tax-deduction, but at the end of the day, does it matter if they give only for the deduction?


A little bit more about the data. This data excludes special events related (TeamRaiser) gifts and recurring donations and represents clients that: 
• were active fundraising prior to 1/1/2008
• averaged >1 donation/day in 2008 (ie. had more than 365 donations in 2008)



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