Do you think the way that you give to charity has changed throughout your life? Do you see it changing as you get older?
Research from Barclays has shown that those under the age of 35 gave an average of £246 to charity last year, with 35-54-year-olds donating a similar amount (£265). Interestingly, over-55s give the least away each year, with the average person donating a total of £168 per year to charitable causes.
One reason for this may be the shift in donation methods, as digital donations begin to rise, and on-street contributions lose favour. Over the past three years, online donations have become more popular, with seven in 10 charities reporting an increase.
However, donating to charity is not about your age, or the method you used to give that money away. It’s about helping a cause you believe in and making the world a slightly better place at the same time. So, why not go the extra mile and help charities make the most of your support?
Making your contributions go further:
Donating to charity has several positive effects:
- People, animals and causes we care about receive help
- You get that warm, fuzzy feeling in your heart
- You might influence family and friends to be a bit more generous
But charitable contributions can be even more rewarding, if you:
Choose Gift Aid: This is usually a simple tick box on the form you fill in when donating. Selecting it allows the charity to claim tax relief on your donations and means that they receive more money as a result. For example, if you donate £100, the charity receives a total of £125. Surprisingly, charities miss out on millions of pounds worth of funding through donors choosing not to allow Gift Aid on their donations, even though it is one of the easiest ways to give more.
Allowing the charity to claim Gift Aid on your donation does not cost you extra money, it just means that the charity can reclaim the Income Tax you have already paid before receiving that amount.
Give time as well as money: When you have found a cause that is important to you, if you are able to do so, try volunteering your time or skills to enhance the services offered by that organisation. Charities need people, skills and your time, just as much as they need your money, so why not go the extra mile and maximise the value you can bring to them.
Spread your donations out: Many charities see huge spikes in public generosity during certain times of the year and special appeals. However, they rely on that funding to provide their services throughout the year. This means that donors who provide regular contributions each month help to keep the organisation running between donor spikes.
Think local: Many larger organisations have local branches or groups which will need extra contributions. Making donations to these smaller offshoots means that your money goes straight back into helping your local community, while supporting a cause you believe in.
Leave a legacy: If you’re running out of things to do with your money when you pass away, why not consider leaving some of it to your favourite causes? You can write this into your will and the organisations will not have to pay IHT on the cash they receive.
Is there anything in it for you?
Now, charity isn’t about being selfish, but making donations can help you to reduce the amount of tax your family will pay on their inheritance when you pass away. Unfortunately, it’s not a pleasant thing to think about, but as all financial gifts to non-profit organisations and charities are exempt from tax and are immediately outside of your estate for Inheritance tax (IHT) purposes, it does mean that you can reduce your estate efficiently, meaning that your favourite causes are able to make use of your money, rather than the taxman.
Talking to us about your options
If you are considering how giving money to charity might affect your financial outlook, feel free to give us a call to discuss your options and the ways your contributions can benefit the causes you care about, as well as your financial wellbeing.
The Financial Conduct Authority does not regulate tax or estate planning.