Personal finance: Maximise your charity giving

It’s worth doing some research before donating and thinking about the causes you really want to support.

Research your causes

It can be really rewarding to build up a long-term relationship with a charity close to your heart, especially if you can give some time to help as well as money. There are more than 160,000 charities in Britain covering a massive range of different issues, from small local organisations to the huge international charities, so there is something for everyone.

Gift Aid it

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Always tick the Gift Aid box when making a donation. A charity can then enhance this sum by reclaiming the tax you have already paid on it. This means a £1 donation is worth £1.25 to the charity. It may sound pretty simple, but a surprising number of donors forget to use Gift Aid. Just 39 per cent of donors used the relief in 2011-12, meaning charities lost out on millions of pounds. Look out for the Gift Aid sign whenever you’re about to donate.

Workplace giving

Giving directly through your salary is another very effective way of giving to charity. Your employer may offer a payroll giving scheme such as the Charities Aid Foundation’s (CAF’s) Give As You Earn programme, which means you can sign up and give directly to nominated charities out of your pay before tax is deducted. Giving £1 in this way would only cost a basic rate taxpayer 80p. In 2011-12 there were 735,000 employees giving through this method, raising a total of £118m, according to HMRC. Not only is it tax effective to give in this way, but some employers also offer matching schemes as part of their benefits package, meaning they’ll add to every donation you make.

Charity accounts

A number of organisations, like CAF, offer charity accounts which help donors better organise their giving. Gift Aid is automatically added to these accounts and you can plan your giving, easily split donations across causes and transfer money directly from your payroll.

Give regularly

Rather than giving the odd amount to various different charities, you might want to consider setting up a direct debit. Regular gifts provide security for charities and allow them to plan their activities and be more effective with their resources. Whilst it’s fine to make the odd impulsive donation, giving regularly is much healthier for the charity sector, especially in the current climate of uncertainty.

• By Emily Gorton of the Charities Aid Foundation