The season for giving is here and there’s more than one way you can help communities and tackle wider issues. The 5th December marks International Volunteer Day. It mobilises thousands of volunteers lending their support to charities and other organisations every year.
This year, supporting charities is more important than ever. Lockdown restrictions mean some charities have seen demand for their services rise, particularly those offering support to unemployed or low income workers. In May, 36% of charities told the Charities Aid Foundation that they’d seen an increase in demand due to the pandemic.
Rising demand has come at a time when donations are falling. One in five charities have concerns that there will be a shortfall in donations due to a lack of footfall and people carrying less cash.
Despite the challenges they face, charities are still delivering valuable support and there are things you can do to back them too.
Supporting a charity doesn’t have to mean donating money. And, in the spirit of International Volunteer Day, donating your time can be just as valuable. Many charities rely on volunteers to get things done, from admin to delivering services. From organising donations in retail outlets to getting in touch with vulnerable people to alleviate loneliness, your time can have a real impact on the work charities do.
Think about the skills and experience you can offer a charity which could have the biggest impact. If you have an existing DBS check, for instance, they may be able to use your skills to directly support people and communities that need help.
If your employers offer the option to donate through your salary, this can benefit both you and good causes. Donations are taken before your Income Tax is calculated, but after National Insurance contributions have been deducted. It’s tax-efficient for you and means your donation goes further.
This is a good option for setting up regular financial donations to your chosen charity. However, your employer must be part of a payroll giving scheme, it’s not something you can set up individually.
Gift Aid doesn’t cost you anything but can help make your financial donations go further. Gift Aid allows a charity to reclaim the basic rate Income Tax that you have already paid. So, for every £1 you donate, the charity can claim an extra 25p. All you need to do is sign a Gift Aid declaration when donating.
Sometimes having a clear out of your own home can lead to a pile of unwanted items that are still in good condition. Rather than throwing them away or selling them, handing them over to a charity can help them raise funds. Be sure to check which items a charity is seeking beforehand.
Some charities are also using online shops or auctions as a way to raise funds. You may be able to donate suitable items or hold your own online sale, with proceeds going to your chosen charity.
Fundraising events play a big part in securing money for charities. But it’s an area that’s badly affected by social distancing measures. The London Marathon, for example, raised over £66 million for a range of charities in 2019. Due to the limited number of runners this year, it fell to just £16.1 million.
Organising a fundraising event can get your family, friends and colleagues involved in raising money for a good cause. You may have to be a bit more creative than usual, but online events or undertaking a physical challenge could prove popular. Take inspiration from centenarian, Capitan Tom Moore who raised an incredible £32 million for the NHS by walking laps around his garden.
When we think of financial donations to charity, we usually think of putting our hand in our pocket or a bank transfer. But you can donate shares too. This type of gift can be just as valuable to charities.
It’s an option that can also have tax benefits. You don’t have to pay Capital Gains Tax on any growth of the shares gifted. You can also claim Income Tax relief on their value. As a result, you can reduce your tax bill through donating to charity.
While charities face challenges today, they need to think long term too. You may want to leave a charitable legacy by naming a charity in your will. You can choose to leave a lump sum, a portion of your estate or even certain items to charities that are close to your heart.
If you’re concerned about Inheritance Tax, a charitable donation in your will can also reduce liability. It may mean you’re able to leave more to loved ones while still benefitting a good cause.
If you’d like to discuss how you could support a charity close to your heart through financial donations, please get in touch.
Please note: This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
The Financial Conduct Authority does not regulate estate planning.
