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
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

Guru Careers: Pricing Analyst

£30 - 35k: Guru Careers: We are seeking a Pricing Analyst to join a leading e-...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K YR1: SThree: At SThree, we like to be dif...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

Guru Careers: C# Project Team Lead

£55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

Day In a Page

Fifa corruption: The 161-page dossier that exposes the organisation's dark heart

The 161-page dossier that exposes Fifa's dark heart

How did a group of corrupt officials turn football’s governing body into what was, in essence, a criminal enterprise? Chris Green and David Connett reveal all
Mediterranean migrant crisis: 'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves,' says Tripoli PM

Exclusive interview with Tripoli PM Khalifa al-Ghweil

'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves'
Raymond Chandler's Los Angeles: How the author foretold the Californian water crisis

Raymond Chandler's Los Angeles

How the author foretold the Californian water crisis
Chinese artist who posted funny image of President Xi Jinping facing five years in prison as authorities crackdown on dissent in the arts

Art attack

Chinese artist who posted funny image of President Xi Jinping facing five years in prison
Marc Jacobs is putting Cher in the limelight as the face of his latest campaign

Cher is the new face of Marc Jacobs

Alexander Fury explains why designers are turning to august stars to front their lines
Parents of six-year-old who beat leukaemia plan to climb Ben Nevis for cancer charity

'I'm climbing Ben Nevis for my daughter'

Karen Attwood's young daughter Yasmin beat cancer. Now her family is about to take on a new challenge - scaling Ben Nevis to help other children
10 best wedding gift ideas

It's that time of year again... 10 best wedding gift ideas

Forget that fancy toaster, we've gone off-list to find memorable gifts that will last a lifetime
Paul Scholes column: With the Premier League over for another year, here are my end of season awards

Paul Scholes column

With the Premier League over for another year, here are my end of season awards
Heysel disaster 30th anniversary: Liverpool have seen too much tragedy to forget fateful day in Belgium

Liverpool have seen too much tragedy to forget Heysel

Thirty years ago, 39 fans waiting to watch a European Cup final died as a result of a fatal cocktail of circumstances. Ian Herbert looks at how a club dealt with this tragedy
Amir Khan vs Chris Algieri: Khan’s audition for Floyd Mayweather may turn into a no-win situation, says Frank Warren

Khan’s audition for Mayweather may turn into a no-win situation

The Bolton fighter could be damned if he dazzles and damned if he doesn’t against Algieri, the man last seen being decked six times by Pacquiao, says Frank Warren
Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Blundering Blair quits as Middle East peace envoy – only Israel will miss him

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
Fifa corruption arrests: All hail the Feds for riding to football's rescue

Fifa corruption arrests

All hail the Feds for riding to football's rescue, says Ian Herbert
Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

The Kurdish enclave still resisting the tyranny of Assad and Isis

In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

How I survived Cambodia's Killing Fields

Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

How Stephen Mangan got his range

Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor