/ Money

How do you like to give to charity?

Charity worker on high street

Brits are a generous bunch – according to the Charities Aid Foundation UK adults donated £9.3bn to charity between 2011 and 2012. And over half of us donate to charity in a typical month. But what’s the best way to give?

There are a wide range of ways people can donate. And if you’re anything like me you’ll often drop a £1 in a bucket with little thought. But what about if you really want to make a difference for your chosen cause?

Of course, charities most value people who donate regularly over the years. Yet, the methods charities use to sign-up donors can sometimes raise heckles.

High street and door-to-door fundraisers are certainly a controversial topic. Our posts on chuggers often gain a mixed response, but this comment from Erin sums up typical feelings:

‘If I want to give to a charity, I will give to them of my own accord. Any charity that harasses me simply ensures I will never give to them again.’

Giving through your payroll

There’s lots of research that suggests the majority or people only donate to charity after being asked, whether in an advert or by someone in the street. But if you know you want to give, why not cut out the middleman and set-up a direct debit directly with the charity?

Or if you’re in work, ‘payroll giving’ is a good way to give to charity on a regular basis. The money comes out of your pre-tax salary and can go to any charity at all. Your employer will need to have an arrangement with a payroll-giving agency – the biggest of which is Give As You Earn.

Regular giving with charity credit cards

You could also get yourself a charity credit card. These are less common than they used to be, with Lloyds notably pulling its charity credit card last year. But Co-op and MBNA both still offer charity credit cards that support a number of well-known charities, such as the RSPCA, British Heart Foundation and Save the Children.

These cards will donate 25p per £100 spent to your chosen charity, which isn’t exactly an earth-shattering sum. In fact,  you could donate far more by getting a cashback credit card that pays back 1% on your spending and then give that cashback to charity. Still, every penny counts, so charity credit cards can still be a valid way to donate.

So I want to know – do you regularly donate to charity? How do you prefer to give?

P Hunter says:
25 November 2013

I work as a volunteer for Cards for Good Causes. They guarantee that a minimum of 70% goes to the charity. You will find these shops in local libraries, churches, tourist Information Centres, etc. and they sell cards from a huge selection of charities.

Neil Stevens Consulting Ltd says:
27 November 2013

Having established my own company 2 years ago I wanted to make regular donations to charity from the company. I set up a Charities Aid Foundation company account and make monthly payments by direct debt – currently £50 per month. I decide every now and again which charities to support – either in response to clients or colleagues taking part in fundraising events, or in response to world events such as the current Philippines tragedy. Every now and again I also make single payments as an individual to support specific events such as Children in Need or Comic Relief.

Stuart says:
12 December 2013

Giving money to Children in Need or Comic Relief is not a good way of donating. You lose the benefit of tax relief and as the money goes to the BBC you have no control over where your money goes. Participating celebrities often take a “cut” and as shown recently the money is not given to charity but invested in inappropriate investments.

I wondered why the article in the December 2013 issue of Which? didn’t mention the Charities Aid Foundation, through which I also have given to different charities for years. It’s a painless method: the money you give builds up in your account each month and the tax rebate is automatically added to it so you choose which charity to send it to. You can send vouchers to the charities of your choice or use a card.

Albert Granville says:
29 November 2013

I was surprised that your recent feature on “Giving To Charity” made no mention of the Charities Aid Foundation. A large number of people, including me, give a regular monthly sum to CAF under Gift Aid. CAF recovers tax and adds the amount received to your charity account. You draw on this account with a Charity Cheque Book or by Standing Order to support the charities of your choice.

Peter Anderson says:
8 December 2013

Charities should be scored and ranked based on how much of every pound donated actually gets through to the actual cause after admin costs, collection costs etc. That would be a good thing for Which to include next time it looks at this topic.

I agree, Peter. The public should have this information before they make a single donation.

This is not the only factor that is important financially. How do we know how money donated is spent? It could be spent very effectively or frittered away on worthless projects or used to pay staff who are not doing a very good job.

Then there are charities doing vital work that should really be supported by governments and those that seek to improve the quality of people’s lives.

It’s all very complicated, but it would a good start for charities to provide the information that Peter has asked for and for Which? to provide us with a report.

Good idea in principle but difficult to define unnecessary admin costs.
A charity which carefully manages how its money is spent on projects and regularly checks on their progress etc will have much higher admin costs but know that most of its money is being spent appropriately than one which which just writes out cheques and posts them to the project providers.

I agree, Robert. I know the problems but certainly don’t have the answers. 🙁

Stuart says:
12 December 2013

I agree entirely. Unfortunately if this method were adopted it probably be the end of a few high profile charities, like Children in Need, Comic Relief and the London Marathon. As reported recently the activities of these charity appeals leave a lot to be desired.

John Perry says:
11 December 2013

I have only just read your report on charitable giving and, like so many people above, was surprised to find no mention of the Charities Aid Foundation which I have used since June 1986. I can sum up its benefits as: One Direct Debit, one Gift Aid declaration, one entry on my Tax Return. And for this I get a “Cheque” book of Charity vouchers and a Debit Card with which I can donate to as many Registered Charities and Community Amateur Sports Clubs as I wish. I get quarterly bank-type statements and can view my account on line as well. CAF is a charity in its own right so I do not begrudge the small fee charged. It is secure; for the purpose of the £85,000 compensation scheme I understand that it is classed as part of the Lloyds Banking Group. Once money has been paid to CAF it ceases to be part of the donor’s estate. On the death of the donor, any balance in the account will be distributed to up to five charities in accordance with a “Letter of Wishes” previously deposited with CAF by the donor. They have thought of everything!

Stuart says:
12 December 2013

The best, most tax efficient way to gave to charity is via direct debit direct to the charity concerned. I generally refuse to give to street collections, except poppy days, as there are so many fraudulent collectors operating, especially around Christmas. It is very difficult to decide who is genuine and who is not. I give “chuggers” short shrift. Many operate outside the law as their operations can constitute begging, which has been illegal in the UK since the Napoleonic wars. I never give to “celeb fest” hysterical appeals like BBCs Comic Relief or Children in Need. You are giving money to the BBC not to the charity and participating celebrities often take a percentage. As shown on news items recently, the money is not given to charity but invested in inappropriate investments.

Tim Nelson says:
12 December 2013

The article in the December issue of the magazine, on buying charity Christmas cards, does not mention buying cards directly from the charities. Surely this will give the charities the most income from the cards.

Stuart says:
21 December 2013

Charities have been getting a very bad press recently. Their only aims appear to be to pay themselves and their executives very high salaries and the next rung up the charity promotion ladder. The latter is evident, bearing in mind that many executives only spend 2 or 3 years with their chosen charity before moving on.

I used to tithe until the slashed interest rates reduced my income so much. I have always given time in various forms and will continue to do so as long as health permits.

I prefer to give a regular monthly amount by direct debit to charities helping street people as I can think of no worse fate than not to have a home.

Any charity guilty of the emotional blackmail of sending unsolicited gifts will be struck off my list as will any who, having received a donation, then hassle me for more by phone or email.

One thing that irritates me about many charity shops is how posh and expensive they have become. In my town, a wealthy one, I often hear people on low incomes say they cannot afford them. I know they try to raise as much as possible for their respective causes but as they take up so much of our high streets and receive help from low rates and taxes I do feel they have a responsibility to the community in which they have their shops.

I also often hear from volunteers in charities which have many shops that the “men in suits” who now run them disregard the concerns of their volunteers who say they, the suits, have no experience of the actual coal face of working in the shop and only see the bottom line.

Stuart says:
22 December 2013

You are quite right Maaji. Unfortunately “the men in suits” run most of the charities in the UK. All of them have plush office suites, mostly in London and have high flying executives earning salaries in excess of £100,000 per year. These salaried people are completely out of touch with the volunteers that do the “coal face” work. I am a member of the Ramblers Association, a registered charity. Their wage bill exceeds £750,000 each year. Most of this is paid to the chief executives who between them earn nearly £200,000. When invited to meet the members, who pay for the privilege of being a member and do all the work for nothing, they make excuses and disappear within their plush London office. They are terrified to meet them. All the charities are the same.

The Ramblers is a charity that is very much there to benefit the quality of life of its members and the public in general. I work for a small charity that has similar objectives and manages to muddle along without paid staff, like very many other small charities. At one time it was fairly easy to secure grants to support our charitable aims but we may have to invest in professional support with grant applications. A charity like the Ramblers could not be expected to do a professional job without paid staff, but I very much share your concern about the high salaries, etc.

I am far more concerned where charities collecting money that could be directly used to save lives use a significant amount to cover high salaries and run expensive premises, etc.

Stuart says:
22 December 2013

When you state that “the Ramblers are there to benefit the quality of life of its members and the public in general”, it must be remembered that much of this work is done by unpaid volunteers (like myself). The highly paid professionals tend to sit in their plush office in London and dictate policy and procedure. They try to avoid any contact with members if they can. This practice is fairly common with most charities and the Ramblers Association is not the only charity to be guilty of this.

As you say, many charities have well paid professionals in charge, Stuart. The volunteers spend a lot of time and often their own money working for the charity and a significant amount of money that is raised is used to support the paid staff.

There are national charities that don’t work this way (I am on a local branch committee of one) and hopefully more of the money goes to support the aims of the charity. It would be great if everyone in a charity offered their services without being paid, but I doubt that any large charity would work effectively in this way.

Stewart says:
4 January 2014

I had exact same experience as NIC – I took on a £2/month direct debit donation to NSPCC. Six months later they did the old ‘heartstrings pull’ and convinced me to double it. Six months later they did the same again. Its the cleverly planned American system of carefully squeezing every last bean out of you that they can. This continued happening regular as clockwork. I warned them in writing three times that any further milking out of me in this devious and well planned manner would result in me cancelling everything. It didn’t stop although they promised it would. Result is they now get NOTHING and were well warned about their greedy and devious cash milking methods. It NEVER stays the original £2/month that they start off with. That’s just to prepare you for the long term ‘shakedown’ aimed at your conscience. I contribute ONLY to Sally Ann now as a massive % of what I donate actually hits the streets. NSPCC – your comments would be appreciated??

Stewart says:
4 January 2014

We had two of these Charity Executives living across the road. The Charity was paying their personal mortgage payments ang giving them enough salary to strut around like peacocks displaying contempt for us mere mortals who lived in the same street.

Stuart says:
4 January 2014

There is a lot of public concern at present regarding the activities of many charities, especially those that are supposed to help countries in Africa. It has been stated that a lot of money, food and provisions etc. have been taken by corrupt public officials and terrorist groups (Bob Geldoff take note). Also of concern are the very high salaries being paid to charity executives. Many of these executives are typical “butterfly men” who flit from charity to charity in order to advance their careers. What we need in the UK is a better Charity Commission which has teeth and the power to examine all UK based charities and set a maximum salary scale for all salaried charity workers.

I’ve just discovered a wonderful new way to help at no cost to oneself! Lendwithcare provides small loans for entrepreneurs in developing countries which are paid back in regular instalments. So the only cost to me in making a loan of £100 is the interest I would receiveon this in a UK savings account – no need to comment on that.

So now I have the great pleasure of knowing that a rickshaw driver in Lahore can upgrade his aging machine and continue to provide for his family. When the loan is repaid I can then invest in another project! What’t not to like!

Maaji raised the point [on 21 December] that charity shops “have become posh and expensive”, such that “people on low incomes say they cannot afford them”, going on to say that “as they take up so much of our high streets and receive help from low rates and taxes . . . . they have a responsibility to the community in which they have their shops”. This is a fair point but I can see more than one side to it. As I said at the beginning of this conversation, we have contributed quite a lot of good stuff to certain charity shops over the years and it has irked us a little to see really good articles put on sale at ludicrously low prices; the whole purpose of the donations is to help the charity to raise money for their good cause. Most charity shops appear to be grossly over-stocked which creates far too much work for the [usually elderly] volunteers who work in them. It also means the shops are full of scavengers who buy things cheaply to resell for their own profit [I know of some good souls who do this and reinvest the proceeds in further charity shop purchases for resale and ultimately hand over the profits to the charity, but I think these people are few and far between]. Another consequence of charity shops selling things on a clearance basis at very low prices is that other traders cannot get a foothold in the market. Numerous independent shopkeepers, especially in clothing, handbags, books and toys, have had to pack up altogether because they cannot compete against the charity shops with their combination of stock received at no cost, unpaid staff, and a high street presence supported by massive rate relief, and often concessionary rent levels for occupying unlet properrty. I’m not sure what the answer is because, over and above their principal charitable purposes, charity shops do good in saving useable articles from the waste stream [perhaps temporarily in many cases though], enabling people on low incomes to buy clothes and household articles at modest prices, and keeping some high streets alive. Raising awareness of the charity’s purposes and and activities and providing a point of contact for people who might need their help or who wish to support them in other ways are also worthwhile spin-offs from operating the shops.

Michael Pater says:
18 January 2014

There are swings and roundabouts to donating to charities using the CAF process instead of direct donations and making Gift Aid declarations. Using CAF, the tax reclaims are credited to the donors, and cannot be credited to the charity itself; a Gift Aid declaration is not applicable. Attaching a Gift Aid declaration to a normal donation enables the charity itself to reclaim the tax, thereby enhancing the donation, although I believe that the refund is confined to the standard rate of income tax. With a CAF cheque, higher rates of income tax can be credited, but only to the taxpayer.

Of course the benefit to the charity can be equalised by increasing the amount of the CAF cheque, and this would be the preferred method for higher-rate taxpayers.

Colin Walker says:
26 March 2015

Sick to death of charities phoning up (some at tea- time and weekends even) asking for donations.
This also includes charities that we already give to, begging for more !
You don’t even get chance to expand on why you refuse, as the phone is rudely put down on you, suggesting the caller is on commission and I am wasting their valuable time.
Needless to say, I make a note of these charities (that is if they are a charity) and make sure I will never donate.

I’ve heard on the radio that Just GIving takes 5% of donations for admin charges – Virgin GIving take 2.5% – the organisation Giving reportedly sends all donations to the charity or fundraiser – unfortunately I’ve not been able to find Giving on the internet to verify this – does anyone have any leads on this group? thanks

On the other hand, JustTextGiving is free of charges.