In late December, many workers at the Fidelity Charitable Gift Fund drop whatever they are doing — whether developing a new web tool or working on marketing pitches — to help take calls from donors eager to make contributions before the end-of-year tax deadline.
“Most project work stops, and we’re very much focused on the donors,” says Matt Nash, Fidelity’s senior vice president of donor engagement. “It’s kind of an all-hands-on-deck approach.”
Mr. Nash also brings in temporary workers to help deal with the increased volume of donor emails and phone calls.
The extra hands are needed at Fidelity Charitable’s headquarters in Cary, N.C., because the fund receives about 60 percent of its contributions during the fourth quarter. Grants made from already-established funds to charities also increase as the year winds to a close. About 40 percent of annual grants are typically made in the final three months of the year.
“It really cranks up,” Mr. Nash says.
Fidelity Charitable, the nation’s second-largest nonprofit by private support raised, isn’t the only donor-advised fund organization that kicks into high gear as winter approaches. More than one-third of the contributions to Schwab Charitable accounts and one-quarter of the donations from those accounts to charities occur during December. During the last two years, November and December contributions to the Bank of America Charitable Gift Fund accounted for about two-thirds of the fund’s annual deposits.
It’s too early to predict year-end performance with any precision, but some donor-advised funds see some good early signs. Fidelity reports that after a sluggish third quarter, contributions “appear to be rebounding.” Officials at the Bank of America Charitable Gift Fund say end-of-year contributions have increased over last year.
Nudging Donors to Give
To ensure transactions are completed before the year’s end without a hitch, Fidelity updated its website in October to allow donors to use a single web form to indicate up to 100 grants to nonprofits they donated to previously, to avoid having to make separate donation requests.
The charitable fund also sends donors emails during the final months of the year, reminding them of giving deadlines. Assets held at Fidelity Investments, the financial-services firm that created the fund, or electronic payments from a checking account, for example, can be processed until midnight on New Year’s Eve. But to reduce the likelihood of a hiccup, wire transfers need to be placed by December 28. Other gifts that are less liquid, such as assets held in private companies, have an early-November deadline.
Reflecting the ties that many of the national donor-advised funds have with large financial-services firms, many funds nudge wealth advisers at those companies to remind clients about year-end giving.
In addition to sending a series of tweets on Giving Tuesday, the Tuesday after Thanksgiving when charities participate in an international day of philanthropy, Schwab sends an email to wealth advisers reminding them of giving deadlines and offering tips on how to initiate conversations with clients about charitable giving. “Discuss a long-term philanthropic strategy with clients to ensure a legacy of giving for years to come,” the email message reads.
Don Greene, managing director of national philanthropic strategy at U.S. Trust, Bank of America Private Wealth, began asking wealth advisers in August and September to keep charitable giving in mind.
“Once the summer ends, we want people to start thinking about year-end planning,” he says.
More Smaller Gifts
Though the pace of giving picks up during the holiday season, the grants made from Bank of America’s donor-advised fund accounts are generally smaller than they are at other times of the year. Gifts made to charities from January through September tend to be one-and-a-half times as large than those made in the year’s final three months, according to Mr. Greene.
During the final months of the year, a broader slate of donors decide to make grants, Mr. Greene says, including people who make a habit of supporting their favorite charities during the holidays.
At other times during the year, fewer donors elect to make grants. Often, those that do are trying to structure complicated gifts that Mr. Greene says require a lot of back-and-forth with the charities that benefit.
During the final three months of the year, the gifts are less complex, and the greatest challenge for Mr. Greene and his staff is volume: The flood of contributions and grant requests give operations at the Bank of America Charitable Gift Fund the “buzz” of a department store during the holidays.
Despite all the preparations and announcements, it always happens: A handful of donors call on New Year’s Eve to see if they can squeeze a donation of a complicated asset under the wire.
“Probably not” is Mr. Greene’s response.
“We’ll certainly do our best to accommodate their desire,” he says, “but we can’t always meet that need.”
Send an email to Alex Daniels.
