How you can make a difference to charity without breaking the bank

NEWLY elected MPs Cathy Jamieson and Margaret Curran announced recently that their MSP salaries will be donated to charity while they carry out their dual role in London and Edinburgh.

Few people can afford to donate their entire salary but there are plenty of ways you can still make a difference. Mark Webster, director of communications at the Charities Aid Foundation, explains how.

1 STRAIGHT FROM SALARY

Like Jamieson and Curran you can donate to charity directly from your pay packet. With Give As You Earn, donations are taken directly from your pay before tax and benefit from full income tax-relief Effectively this means a 10 donation will only cost you 8 and if you're a higher-rate tax-payer it will only cost you 6. Your employer may also match any donation, meaning your 8 could result in up to 20 going to charity.

2 NAG YOUR EMPLOYER

If your employer doesn't run a Give As You Earn scheme, then encourage them to set one up. It's quick and easy, so get them to visit the Charities Aid Foundation website at www.cafonline.org. or call 03000 123 000 to find out how to establish a scheme.

3 GIFT AID

If you pay either income or capital gains tax in the UK then you can add Gift Aid to any donation you make to charity. This means that for every pound you give HM Revenue & Customs will give an extra 28p to the charity. If you are a higher rate tax-payer you can also claim the difference between the basic and higher-rates of tax on your donation. CAF estimates that around 750 million of Gift Aid goes unclaimed every year, so make sure you add it to every donation.

4 CHARITY ACCOUNTS

A CAF charity account is like a bank account but just for charitable donations. A charity account can be opened by setting up a direct debit for 10 a month or more, or a one-off donation of 100. You can also fund your account through Give As You Earn. All money held in a CAF charity account automatically receives Gift Aid and you can donate to any charity online through the CAF website, using your CAF charity card or chequebook.

5 SHARE DONATIONS

Giving shares to charity will minimise your tax bill as it is possible to claim full personal tax relief on listed shares, unit trusts and open-ended investment companies. There is also relief on capital gains tax, which is set to increase in the emergency Budget, increasing the savings made through share giving. These tax benefits means that if you donate 1,000 it could reduce your tax bill by 220, or 500 if you're a higher rate taxpayer.

6 DONATING THROUGH A WILL

Leaving money or other items of value such as jewellery, art or land to a charity in your will is another tax efficient way to give to charity. Legacies were worth 1.9bn to charities last year yet only 14 per cent of wills include a charitable legacy. All donations made to charity are exempt from inheritance tax.

7 HIGH STREET GIVING

Buying gifts for friends and family from charity shops not only mean bagging a bargain but you'll also be raising funds for charities. Many charity shops have undergone makeovers in the last few years and now specialise in selling designer clothes or quality second-hand books. To find charity shops close to you visit the Association of Charity Shops website at www.charityshops.org.uk.

8 CHARITY VOUCHERS

Charity gift vouchers come in denominations of 10 and 25 and can be used to give any recognised charity in the UK. The person you give the voucher to simply enters the name of a charity they would like to benefit and gives it to them like an ordinary donation. Visit www.cafonline.org to get yours.

9 CHARITABLE TRUSTS

If you want to give away 10,000 or more then you could think about setting up a CAF Charitable Trust. Trusts are a good way to provide long-term support for charitable causes that matter most to you but can be complex and complicated to set up and run yourself. CAF take care of the legal and financial responsibilities but you retain control and freedom over how to spend the money.

10 GIVING TIME

If money is tight but you can spare an hour or two a week of your time, then why not volunteer for one of your local charities. Most charities rely on volunteers to operate, from helping out in a charity shop to visiting elderly people in their homes. Whatever skills and experience you have a charity is sure to be able to put them to good use. Visit www.timebank.org.uk or www.do-it.org.uk for more information.