“Are we all procrastinators?”

There are a lot of ways to answer the question of why ~30% of charitable giving in the U.S. happens in the last month of the year, starting with Giving Tuesday. Donors have good intentions. So do the people that support them – family office support and other advisors.

In general, life happens. Donors are busy, continue to build businesses, connect with their families or take on a variety of other commitments. They are usually not full-time philanthropists and don’t have big teams.

It goes something like this…

Families and their teams start the year with renewed focus and the best intentions for their charitable program: find the right charitable partners, support them, and make a positive impact! But there’s no pending deadline. It’s January 31^st, not December 31^st. Other needs and priorities surface. Good intentions merge into a long list of to-dos.

“Ok, we’ll do it after taxes are done. Let’s rebalance the portfolio first. We need a bit more time.”

They file the extension. Summer comes. Lots of activities.

“We’ll hunker down in the fall before busy season”.

It gets pushed again. Choppy markets. Collect all those K-1s. Tax extension deadline. Time flies.

The annual “December Mad Scramble”.

Before you know it, the family office team has to scramble to get gifts out the door, sometimes even on December 31^st to ensure deduction limits and tax planning opportunities are (potentially) optimized. It takes time from the family office team at a crucial time of the year, resulting in negative outcomes and lost opportunities.

Frustrations we hear from clients include: rushed giving, non-experts overburdened with compliance rules they may not understand fully (e.g., when does the tax deduction count – when the check is cashed or when it is sent, or something else?), and family goals and intentions from the beginning of the year may not be met.

Philanthropy is typically not a full-time job in many family offices, and it can wreak havoc on family office professionals who serve multiple roles. And when all of this is done manually and the inevitable questions or mistakes arise, it can quickly feel like "death by a thousand cuts”.

What are the causes of the “December Mad Scramble”?

Making decisions on charitable activity relies on having ready answers to basic questions but it’s surprising how often family offices are challenged to answer the fundamentals quickly and efficiently. These are the most common drivers.

• Donor/family goals aren’t captured and defined
  • Questions: What’s are the family’s giving goals for the year…tax, funding source, family member and cause areas?
• Easy answers are not readily available for early/quick decisions
  • Questions: What has the family already committed to? What‘s the status on that commitment?
• Poor visibility into the prior or current year’s “plan”, making it hard to identify those gifts that could be completed earlier
  • Questions: How much has the family given to XYZ organization? When was the last gift?

Who is doing this well?

For those family offices that have tamed the “December Mad Scramble”, we’ve seen technology remove many obstacles and change these dynamics by enabling:

• a simple plan with visibility for the team
• one easy place to answer simple questions
• automation to remove operational burdens on the team
• compliance guidance for non-experts
• reports to create insights and facilitate more delightful discussions with donors and families

What are the benefits?

It may not seem like a game changer, but the list of positive outcomes we’ve seen from taming the “December Mad Scramble” in charitable giving can be impactful to everyone involved:

Family office teams. Technology can more seamlessly track multi-year gifts and even create opportunities to offset quarterly tax payments when gifts are done earlier in the year. That can add up to meaningful funds for major donors. Avoiding the last-minute rush by giving throughout the year means family office teams are less stressed in December. That’s a win all around!

Charities. By spreading out payments throughout the year, families can put more thought into their giving, engage with potential grantees and benefit their charitable partners by getting them the funds they need earlier. Ensuring the year’s “giving plan” is visible makes it easier to follow through on intentions, with a lot more ease.

Families. Technology equips donors to find patterns, easily replicate plans, and extract themes. Better alignment means a more satisfied donor. Technology can also give donors and teams the tools to say “no” --with tact and grace -- in those cases where a request for funds doesn’t align with goals, values and donor intentions.

A better way

One might say technology is not a panacea. It cannot replace discussions with grantees, tell us what’s in our hearts or be the ultimate decision-maker. Those are all true.

Yet, a bit of specialized “infrastructure” can better equip family offices and advisors to have meaningful conversations with their client families.

There is a better way, and technology can help, a lot.