Thursday, 1 July 2004

Giving all your money to charities

When a donor gives money, they generally expect all the money they give to go to the charity they have chosen. But does this always happen? The answer is no. There are several reasons for this, and there is not necessarily anything sinister about it, but donors should be aware.

First, anyone raising funds on behalf of a charity may be entitled to charge reasonable expenses, and may have agreed with a charity to charge a fee for every donation made. The worst example of this is probably ‘chugging’. This is an abbreviation used in the fundraising field for ‘Charity mugging’ – young people, often students, out of work actors etc, on the street stopping passers by with a clipboard, and trying to recruit donors to a charity. They are usually paid for every person they get to sign up – so how much of your donation will benefit the charity?

There are also web sites operating on behalf of a wide range of charities, and these often purport to give the whole of the donation to the charity, but often omit to mention that the gift aid reclaimable may not be passed on to the charity. For a one-off donation this probably does not make a great deal of difference, but if you are considering long term support – such as becoming a WLT partner, it is always best to make your donations direct to the charity you are supporting, it makes a huge difference if they can claim the gift aid. And if you are considering larger donations or legacies, it is often best to speak to the charities representatives or solicitors, as they can advise on cost effective giving and maximising tax benefits.

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