Nicholas' reputation for gift giving comes partly from a story of three young women who were too poor to afford a dowry for their marriages: as each reached a marriageable age, Nicholas, being sneeky and stealthy, threw a bag of gold into the house at night. Some versions of the legend say that the girls' father, trying to discover their benefactor, kept watch on the third occasion, but Nicholas dropped the third bag down the chimney instead. When the father found out the truth, Nicholas begged him to keep the secret, but the news got out. After he died, people in the region continued to give to the poor anonymously, and such gifts were still often attributed to St. Nicholas.
But there's more to this story. . .
Supposedly, Nicholas was born to a wealthy family in Patara, Lycia. His parents died, and he inherited a considerable sum of money, but he kept none of it; which is where he got the money for his most famous story.
Nicholas was the bishop of Myra (near modern Finike, Turkey) sometime in the 300s. Around that time Emperors Diocletian and Maximian began their persecutions of Christians, and the new bishop was imprisoned. When Constantine became emperor, Nicholas was released with countless others and returned to his preaching only to find a new threat: Arianism (disbelief in the trinity). According to one biographer (writing five centuries after Nicholas's death), "Thanks to the teaching of St. Nicholas, the metropolis of Myra alone was untouched by the filth of the Arian heresy, which it firmly rejected as a death-dealing poison."
One account claims Nicholas attacked the heresy of Arius (who denied the full divinity of Christ and whom Arianism is named after) in a much more personal way—he traveled to the Council of Nicea and slapped Arius in the face!
By the reign of Justinian (d. 565), Nicholas was famous, and the emperor dedicated a church in Constantinople to him. By the 900s, a Greek wrote, "The West as well as the East acclaims and glorifies him. Wherever there are people, his name is revered and churches are built in his honor. All Christians reverence his memory and call upon his protection." He's said to have been represented by medieval artists more frequently than any saint but Mary, and nearly 400 churches were dedicated in his honor in England alone during the late Middle Ages.
It's interesting that Santa Claus, the guy is who supposed to have come from and named after Saint Nicholas, is more known as a giver of gifts, but the real St. Nick was more known as a defender of sound doctrine, a protector of Christianity.
Don't get me wrong; I'm not against Santa. I just thought you might find this bit of history interesting.