Money: Give to charity and the taxman tops it up

Schemes that add to donations may rouse us to make them, writes Faith Glasgow

You've probably seen Eddie Izzard on TV promoting Gift Aid 2000, the Government's campaign to boost education and anti-poverty work in the world's 80 poorest countries. The ads are aimed at the 18 to 34s: not a group known for their generosity to charity.

Under the Gift Aid 2000 scheme the Inland Revenue will boost individual donations of pounds 100 or more by adding basic-rate tax relief (plus a bit extra). So every pounds 100 you give is worth pounds 130 when it gets to the charity. And for those who don't have spare cash lying around, you can give from pounds 5 a month upwards and still qualify for the tax break.

The voluntary sector certainly needs a boost. Research from its umbrella organisation, the National Council for Voluntary Organisations (NCVO), published in January, indicates that nearly 90 per cent of those questioned considered it important to give both time and money to charity. But fewer than half had got as far as putting their hands in their pockets, and only 10 per cent had made any time commitment in the previous month.

These findings are set against an already depressing backdrop of falling financial support. Individual donations to charity have dropped by almost a third in the last five years. But the message is not all gloom. The research showed that 45 per cent of respondents in social classes A and B would give more to charity if the tax system added to their donation.

The Gift Aid 2000 scheme is one way to make your donations go further, and there are several tax-effective schemes already in existence, including setting up a deed of covenant, Payroll Giving, (the original) Gift Aid and the CharityCard.

Another recent step in the right direction is NatWest's Community Bond, available to investors with between pounds 500 and pounds 250,000 to tuck away. As far as the individual is concerned, it operates much like a fixed-rate savings bond with terms of either one or three years; but you choose an interest rate below the market rate and are paid at that lower level. The difference between the two rates is paid into a regional "community finance fund", where it is used to provide loans at near-market rates for charities and community groups.

It's a useful way of supporting a locality - but investors have no control over how the money will be allocated. And if interest rates continue to fall, the amount you give could be eroded as the market rate creeps nearer your chosen rate.

If you want to support in a focused way, it makes more sense to keep investment and giving separate. Make your money work harder for you in a conventional investment and then use your everyday bank account to target your giving through one of the routes below.

n The CharityCard, administered by the Charities Aid Foundation, is an extremely flexible way of giving to different causes. It's a simple idea: you open an account and put the amount you want to give to charity in it, then the CAF reclaims the tax you've paid on that sum and adds it to the pot. So if you put in pounds 100, for example, CAF will pay in another pounds 23 from the Government. With the account comes your CharityCard and "cheque book", which you can then use to write cheques or make payments by phone or on the CharityCard website whenever you want to make a donation. The scheme gives you complete control over how much and when you give, and to whom, which is especially valuable if you have diverse interests.

n Payroll Giving is an optional programme operated by employers. Participating employees give up to pounds 100 per month, which is deducted from their pay before tax, and passed to their chosen good causes via an agency charity. The Budget included plans to do away with the pounds 1,200 annual ceiling and for the Government to make an additional 10 per cent contribution to each donation for a limited period.

n If your employer doesn't offer the Payroll Giving option, your choice is dictated largely by whether you are prepared to sign up to a minimum of four years' support for one charity through a deed of covenant. A covenant has the great advantage to the charity of being a regular source of income, but it amounts to a long-standing commitment from you. It is a legally binding arrangement, which enables you to get tax relief on your gift. The charity can then reclaim this from the Inland Revenue. So if you want to give, say, pounds 100 to Oxfam, you make a covenant to it for pounds 77 and the Revenue will pay Oxfam the pounds 23 difference.

n A less committed route is the Gift Aid programme and its spin-off, Millennium Gift Aid. At the moment Gift Aid only enables charities to reclaim tax on one-off gifts to any UK charity of more than pounds 250. But the idea is to open it up to match Gift Aid 2000 once that project ends in 2001. Gift Aid will then be open for gifts of pounds 100 upwards, and will accommodate "drip feeding" payments over the year that total at least pounds 100.

n Contacts: Gift Aid 2000, 0845 075 2000 or www.gift- aid@2000.org.uk; Inland Revenue Covenant Helpline, 0151-472 6037; Inland Revenue Gift Aid Helpline, 0151-472 6038. To give under Gift Aid ask the charity for form R190(SD). CharityCard, 01732 520050 or www.charitycard.org/

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Graduate Recruitment Resourcer

£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...

Recruitment Genius: Telesales Executive - OTE £32,000+

£18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...

Ashdown Group: Marketing Manager - B2B, Corporate - City, London

£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...

Neil Pavier: Commercial Analyst

£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...

Day In a Page

War with Isis: Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria's capital

War with Isis

Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria
Scientists develop mechanical spring-loaded leg brace to improve walking

A spring in your step?

Scientists develop mechanical leg brace to help take a load off
Peter Ackroyd on Alfred Hitchcock: How London shaped the director's art and obsessions

Peter Ackroyd on Alfred Hitchcock

Ackroyd has devoted his literary career to chronicling the capital and its characters. He tells John Walsh why he chose the master of suspense as his latest subject
Ryan Reynolds interview: The actor is branching out with Nazi art-theft drama Woman in Gold

Ryan Reynolds branches out in Woman in Gold

For every box-office smash in Ryan Reynolds' Hollywood career, there's always been a misconceived let-down. It's time for a rethink and a reboot, the actor tells James Mottram
Why Robin Williams safeguarded himself against a morbid trend in advertising

Stars safeguard against morbid advertising

As film-makers and advertisers make increasing posthumous use of celebrities' images, some stars are finding new ways of ensuring that they rest in peace
The UK horticulture industry is facing a skills crisis - but Great Dixter aims to change all that

UK horticulture industry facing skills crisis

Great Dixter manor house in East Sussex is encouraging people to work in the industry by offering three scholarships a year to students, as well as generous placements
10 best compact cameras

A look through the lens: 10 best compact cameras

If your smartphone won’t quite cut it, it’s time to invest in a new portable gadget
General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?
How Tansy Davies turned 9/11 into her opera 'Between Worlds'

How a composer turned 9/11 into her opera 'Between Worlds'

Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
11 best bedside tables

11 best bedside tables

It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

Italy vs England player ratings

Did Townsend's goal see him beat Kane and Rooney to top marks?
Danny Higginbotham: An underdog's tale of making the most of it

An underdog's tale of making the most of it

Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

Steve Bunce: Inside Boxing

Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police