Per your comment:
he wants us to approach him and tell him directly that we will not be able to come
I would just go to him and say "I already made plans for Thanksgiving this year and I won't be able to attend the volunteer event." (Or you could state whatever your actual reason is, if you want to.)
If your boss has a problem with that, then you have several options.
- As you said, you can offer to donate money in lieu of volunteering. Depending on his level of involvement with the charity, he may know whether or not they need money, or whether they primarily need people.
- As Kate points out, you can offer to volunteer at a different time. It tells him that you're not against the idea of volunteering or the charity itself, just that the timing is bad. (Then again, the fact that you volunteered last year should already tell him this.)
- You could offer to break your plans. This should be totally up to you; depending on what you were planning, this may be easy or hard to do, but you should only offer to do this if you feel like it's a viable option. I don't know how your boss might feel about you breaking your plans; on the one hand, you're going to be volunteering again; on the other hand, perhaps he'll think "he didn't really have big plans if he was willing to drop them so easily". You may have a better idea how he'll react.
- If none of the above will work, just apologize again for already having plans, but tell him that they're already firm.
In any case, if your boss reacts badly to you not attending his event, you may want to consider searching for a different job. ("React badly" could be anything from "he's more abrupt with me at work now" to "I didn't get a bonus/raise we had been discussing" to "he switched me to a totally different project than I'd been working on", or something different.)
I know "you don't want to work at a place that makes you do X" is sort of cliche, but I personally would be offended if my boss had problems with the way I spend my time outside of work.
Perhaps your reason for being busy is that you're volunteering at a different charity. Perhaps you're driving several hours away to visit family. Perhaps work has been so hectic that you really just need time to take the phone off the hook and recuperate. Regardless of your reason, if your boss is requiring you to spend your holiday in a way that's causing you "pressure and guilt", then I would probably begin a job search so this doesn't happen again next Thanksgiving.
However, it sounds like (in general) you like working for him and don't have a problem most of the year. I would add this to the list of "things to deal with if you work at this company" and as long as the list isn't terribly long, I would completely understand just dealing with it when the holidays roll around each year.