Carbon offsets is money donated to a company (in this case http://www.carbonfund.org/) which is then used to fund third-party offset projects. The company promises that a certain amount of carbon will be offset by your donation, which of course also depends on how much you donate. For every dollar you donate, a tenth of a ton of a carbon is offset.
Try something new this year during the holidays, and ask for carbon offsets! Let's do our best to keep our world green.