How to give like a wise man in eight steps
It’s the peak time of year to give to charity. A little thought can make your money go further – and avoid problems later.
And it can be a useful way to give a present to a relative who has everything already!
Here’s my guide to Christmas gifting…
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1 Get a boost
However much or little you can afford to give to charity, you can get it boosted by 25% through Gift Aid. If you pay income tax, then a gift-aided donation means the charity can reclaim the tax you paid on the gift.
So if you give £100, the charity can get £25 back from the Treasury. Why £25 when the basic rate of tax is 20%? Well, the £25 is the tax you have already paid. You have earned £125 and 20% tax off that leaves you £100, which you give to charity. Gift Aid gets back the £25.
If you pay income tax, always say yes to Gift Aid. If you pay higher-rate tax, you can reclaim the extra through a self-assessment form.
2 Members with benefits
Some charities offer membership with benefits: the National Trust gives free entry to its properties; art galleries give free entry to special exhibitions.
These make great gifts: annual membership of the National Trust, for example, costs £69 or £114 for a couple.
And remember to Gift Aid it.
3 Anonymous donations
Charities rely on donations. One of the most effective ways of fundraising is to write to people who have already given. Anyone who has done so will be on what is called a ‘warm list’ and contacting them usually gets a good response.
If you don’t want to be on the list, when you donate make sure you tick or untick the box to let the charity know you don’t want to be contacted in future. If you still get a letter, write ‘do not contact me’ across it and send it back.
You can avoid any chance of being hounded by opening a CAF Charity Account with the Charities Aid Foundation. You pay money into it like a bank account and the Gift Aid is added. Then you can donate anonymously from your account using a voucher (like a cheque), standing order or direct payment via CAF’s online service. The CAF takes an admin fee of 4% of what you pay in.
Saga is proud to be supporting The Silver Line, the only free confidential helpline providing information, friendship and advice to older people. Open 24 hours a day, every day of the year, the charity has just taken its millionth call. For information about how you can help visit saga.co.uk/silverline
4 No tins
Never give money to anyone shaking a tin on the high street. It might seem mean, but sadly there are Christmas scammers about who pose as charity collectors.
Even if they are genuine it is usually impossible for the charity to collect the Gift Aid on the money you give. So if you see someone collecting for a charity you like the sound of, find its website and make a direct donation – with Gift Aid!
5 Gifts for others
As Christmas approaches, many relatives and friends say ‘No presents, please’ and mean it.
But we all like to give something. So how about a gift for someone who really needs it? A donation to Sightsavers can save someone’s sight, or to a homelessness charity can find a bed for a vulnerable young person. The long-established Charities Advisory Trust has a whole range of gifts for people who really need things at Good Gifts.
Raising money for a charity through sponsorship using an appeal website is easy. But some sites pass much less on to the charity. MyDonate by BT gives the most. It charges nothing except a card fee of a few pence.
One of the most expensive is the popular JustGiving – a commercial site that takes 63p for every £10 you raise, as well as card-processing fees.
7 Willing it
Half of us intend to leave money to charities in our wills. Any gift to a registered charity is free of inheritance tax. If you leave more than 10% of your estate to a charity then the rate of inheritance tax is reduced from 40% to 36%. That can be worthwhile. But you should not leave money to charity just to save tax. And don’t leave a charity either a percentage of your estate or what is called a ‘residuary amount’. Leave a fixed cash sum, which is less likely to be contested. For more information, see my free guide to Inheritance Tax.
One of the most precious things you can give to a charity doesn’t cost anything – your time. Charities always need volunteers. Find out how you could help man the phones for Saga’s chosen charity partner the Silver Line: The Silver Line: lifeline for the lonely
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