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How to make charity donations go further

 

Charities, like businesses and households, are feeling the pinch, but the sector is suffering from a double whammy - not only have their incomes collapsed but demand for their services is greater than ever.

Race for life: Georgie Battye and Ben Pilling hope to raise £10,000 for the charity that has helped her sister

But there is one easy way to boost charities' incomes - ask that nice taxman.

Charities lose out on millions of pounds each year because 40% of donors forget to declare they are taxpayers when making a gift.

Charitable donations by UK taxpayers can be boosted by tax relief at 28% - known as Gift Aid. But if the charity is to benefit, those giving money must make a Gift Aid declaration.

Joanna Barnett, executive director at virginmoneygiving.com, the official sponsorship website for the London Marathon, says: 'Charity funding is under severe pressure as donors cut back in the recession.

'It makes it all the more depressing that Gift Aid is not delivering its full potential. We calculate that charities are losing out on as much as £750m a year because of unclaimed Gift Aid.'

If you want to make a one-off gift to a chosen charity this Christmas, make sure you let the charity know you are a taxpayer and eligible for Gift Aid - either on the donation form or over the phone.

A £78 donation from a basicrate taxpayer would be boosted to £100 through Gift Aid so it really is worthwhile letting the charity know.

Higher-rate taxpayers can claim back even more tax on their gifts if they complete a self-assessment tax form.

People who raise money for charity through sponsored events are also urged to use 'giving' websites that will boost donations by adding tax relief through Gift Aid.

Georgie Battye, 27, a dental nurse from Abersoch, Gwynedd, will run the London Marathon next April for her sister Ollie, 18, who was diagnosed with bone cancer last January.

Georgie will tackle the race with her boyfriend Ben Pilling, 30, who works in his family's interior decor business, and hopes to raise £10,000 for the charity CLIC Sargent, which raises money to give advice, care and support to the families of children and young people with cancer.

Georgie is using the website virginmoneygiving.com to collect sponsorship from friends and family.

The site enables donors who are taxpayers to make an instant Gift Aid declaration and boost their donation. Georgie has already raised more than £4,200 for the cause and this is boosted to £5,150 through Gift Aid tax relief.

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The website justgiving.com is another popular fundraising site used by those looking to raise money for sponsored events.

Georgie says: 'Ollie has been so brave and determined throughout her treatment that she has been an inspiration to the family. CLIC Sargent is a great charity and Ben and I felt we really wanted to do something positive to help support it. We're training hard, doing four runs a week and telling all our friends and family to pledge money for our run through the virgin money giving website.'

Workers who want to give regularly to their favourite good causes should opt to donate through their payroll. This ensures their gift is always as tax-efficient as possible because the money is taken out of gross income and the charity does not have to go to the time and expense of claiming it back.

Someone donating £10 a month through their salary would actually pay £8, for example, if they were a basic-rate taxpayer. In the 2007-08 tax year more than £100m was donated to charity in this way.

Jeremy Bliss, head of client relations at the Charities Aid Foundation, an organisation that works to promote charities and giving, says: 'More than 700,000 workers use payroll giving as a way to give to good causes tax-efficiently. And its popularity is growing year on year. It is easy and effective for donors and charities.'

Ask your employer about payroll giving, also known as Give As You Earn, or visit payrollgivingcentre.org.uk.

Christmas card scrooges: Good causes often lose out

People who want to help good causes by buying charity Christmas cards should steer clear of High Street shops and supermarkets.

According to consumer lobby group Which?, on average only 13% of the sale price of charity cards sold in shops and supermarkets reaches the charity.

People are advised to buy the cards direct from a charity shop or from the charity's own website.

More than half of shoppers buy charity cards, but in some cases, such as Marks & Spencer, John Lewis, Tesco,

Sainsbury's and Ryman, only 10% of the proceeds ends up with the charity. Some cards sold by Next and House of Fraser give only 6% to charity, according to Which?

Buying cards direct from a charity shop or its website means the charity keeps 100% of the price, but pays the costs of producing and printing the cards.

There are organisations that collate cards from different charities, such as cardsforgoodcauses.co.uk and cardaid.co.uk. Both sell cards online, giving a bigger chunk to the charity than High Street stores.

They also organise sales in libraries and churches and a list of venues can be viewed on their websites.

Martyn Hocking, editor of Which? magazine, says all sales of charity cards are good news for the charity, but consumers should check the small print on packs if they want to know how much of their money will reach their chosen good cause.

'Many consumers would probably be shocked to discover that in some cases only 6% of the price of the cards was going to the charity,' he says.

›› For more information on tax-efficient giving, go to the CAF website, cafonline.org.

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