Push the boat out: give extra to good causes
Donations from this year's London Marathon look set to top £35m. But our gifts go further if they're tax efficient
Sunday 23 April 2006
Some do it privately, quietly setting up a direct debit from their bank accounts, while others prefer to do it with a splash at a gala event.
Still others - some 34,500 people - are willing to pound the streets for 26.2 miles to do their bit for charity. Today, these hardy runners - myself among them - will be snaking their way through London in the capital's 25th marathon, raising an estimated £35m, £1m more than last year.
No matter how you do it, charities large and small are the real winners. Nearly two-thirds of us give to good causes in some form, according to the most recent figures from the Charities Aid Foundation (CAF).
Britons donate more than £8.2bn a year to charity, via the chuggers who approach us on the high street, volunteers shaking collecting tins, direct debits and one-off corporate donations.
One in five adults gives in a planned way, usually by direct debit. The average donation for those who do is currently £18 a month.
However, many believe the size of the donation is a distraction. "Whether £2 a month or £20 - it really doesn't matter. It goes towards everything from paying staff to pick up the phone to carrying out research," says Jo Swinhoe, the director of fundraising at the Alzheimer's Society, which raised £18.7m from the public last year - up by 9 per cent on 2004.
Yet we're still not doing as much as we could.
Despite a six-year government drive to promote the benefits of tax-efficient giving, not enough of us tick the Gift Aid box on the forms we use when we donate. This would allow our preferred charity to receive extra cash from Revenue & Customs for free.
Although two-thirds of high-level donors (people who give more than £100 a month) tick the box, only a third of all donors do so. And of those who give less than £5 a month, only one in six made their gift tax-efficient. But donors shouldn't worry too much if they're not making the absolute most of their gift.
"Giving to charity is often a matter of the heart instead of the head," Ms Swinhoe says. "We don't want people not to donate because they're not being tax-efficient."
Donating to good causes will be all the more satisfying, however, if you make the effort to make your gift go further. Some of the most popular ways to do this are outlined below.
Tick the box when you donate, and for every pound you give to your chosen charity the taxman will add another 28p.
Always look for the Gift Aid box, whether in magazines, newspapers or special charity leaflets. If there isn't one, you can ask the charity for a form or download one from the Inland Revenue's website and print it off. See www.hmrc.gov.uk/charities
However, you must be a taxpayer to take advantage.
And if you're a higher-rate taxpayer, you can claim an extra 18 per cent relief on your original donation when filling in your self-assessment form.
Making a will
Any donations made under the terms of a will won't count as part of an estate for the purposes of inheritance tax - levied at 40 per cent on anything over £285,000.
In most cases, individuals leave specific sums directly to their favourite charities. Alternatively, you can opt to donate the residue of an estate - any money left after everything else has been settled.
Giving via a payroll
Donating through your payslip is an easy way to make regular, tax-efficient contributions.
Every month, a sum is deducted from your pre-tax pay packet by your employer, which must be signed up to a payroll charity scheme such as the CAF's Give As You Earn.
You choose the charity and determine how much you want to give. In most cases, you can change the charities you donate to whenever you want.
Today, some six million workers use the payroll giving scheme, and the average sum they donate is £11 a month. In the 1999-2000 tax year, £27m was gifted this way; by 2004-05, the figure had risen to £95m.
If your company is not enrolled, ask your personnel department about signing up. See www.payrollgiving.co.uk
Giving away shares
Donating unwanted small holdings of shares to charity is another way of giving to have been more widely adopted in recent years. Sharegift, a charity share donation scheme, was set up in 1996. In that year it gave £16,000 to six different charities. Last year, it passed £2.1m to 471 organisations.
Although anybody can give unwanted shares directly to a charity, the cost of dealing with them can be prohibitive - particularly for smaller charities. If a broker is used to sell your shares, a dealing fee will be payable, and while this probably won't be more than £10, that's still a high price if the value of the transaction is small.
The Sharegift scheme was set up to get around this problem. It pools all share donations and, at least twice a year, cashes them in and spreads the money across the major charities.
There are tax advantages too for donors who give in this way. For example, basic-rate taxpayers donating £6,000 worth of listed shares could deduct that sum from their overall income tax bills.
The website justgiving.com, which lets you design your own site for charitable fundraising, has helped boost online donations. Note, however, that it levies a 5 per cent transaction fee to cover running costs.
Simon Read: Frozen in time - the expat British pensioners who deserve a better deal
Donald MacInnes: My wasted hours in the retail deserts of Dixons-Carphone
Bargain Hunter: From The Outsider to 1984, catch a cut-price classic, read it in the rye
Money Insider: Smart alternatives to the pensioner bond
Bank-beating exchange rates on your international payments
- 1 Paris attacks: Do not call Charlie Hebdo killers 'terrorists', BBC says
- 2 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 3 UK weather: Snow to fall in the coming week with sub-zero temperatures to last until early February
- 4 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 5 The enemy within: People who hear voices in their heads are being encouraged to talk back
Nigel Farage: NHS might have to be replaced by private health insurance
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
George Galloway condemns 'racist, Islamophobic, hypocritical rag' Charlie Hebdo at freedom of speech rally
British Muslim school children suffering a backlash of abuse following Paris attacks
iJobs Money & Business
£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...
£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...
£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...
Day In a Page
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village