How to make the most of your giving this Christmas - Comment
I haven’t seen door-to-door carol singers for years. Throughout my childhood, we never questioned the fact that every year, on a particularly freezing December night, we would be expected to tramp around the neighbourhood, singing to embarrassed people in their slippers, and demanding donations for charity.
It only really occurs to me now that it must have been a major irritation for anyone suddenly presented with a bunch of out-of-tune children interrupting EastEnders.
Fortunately, carollers seem to have been superseded by newer charitable traditions involving far less shivering and embarrassment, including one that hits next week: Giving Tuesday.
Right now, we’re in the throes of the non-stop shop-a-thon that has sprung up around Black Friday, so for the best part of a fortnight we’ve been persuaded to spend our cash.
The idea is that when this dies down on Tuesday, we remember that Christmas isn’t just about new electric toothbrushes and flat-screen TVs, and are encouraged to give to charity instead.
The trouble is that right at the end of such an expensive month, there are plenty of people who are already strapped for cash. So it’s worth working out how you can make more of your donation, or find ways to give that don’t involve handing over any cash right now.
If you have money to give, or you do it on payday, you can boost your donation by ticking the Gift Aid box. This means the charity can claim another 20 per cent of your donation from the taxman – so if you give £1, they’ll receive £1.25.
This can make an enormous difference to the charities: in the last tax year, they got £1.4bn in Gift Aid this way.
If you’re a higher or additional rate taxpayer, you can then claim even more back through your tax return, and last year 1.2 million people did this.
There’s also a bit of flexibility over which year’s tax return you claim on, so you can give this year, and claim it on the tax return for the previous tax year (as long as you haven’t submitted your tax return yet).
It means you’ll get the money quicker. It’s also useful for people who were in a higher tax band the previous year, who can claim more tax relief.
If it’s a stretch to give cash at this stage, there may be other things you can give. You may, for example, have shareholdings you want to donate.
It can be a particularly sensible option when you have very small shareholdings that aren’t cost-effective to sell, because the charity can get better value for them. Aside from the feelgood factor, you get a couple of tax benefits too.
You don’t have to pay capital gains tax on any growth when you donate them, and you can claim income tax relief on the market value of the shares you give away.
Alternatively, there are a handful of ways to give without any extra cost. The easiest is to have a pre-Christmas clear-out, and donate to charity shops. It’s worth phoning ahead or asking around on your local Facebook group to check which shops are accepting donations. You may be able to Gift Aid your donations, so check that too.
You could also consider using a charitable giving website, like Giveasyoulive.com or Easyfundraising.org.uk when you’re doing the rest of your Christmas shopping.
They work like a cashback site, but give a proportion of your spending to charity instead of passing it on to you. You register with a charity, and then click the links from the fundraising site to thousands of retailers, and shop as normal.
A percentage of everything you spend will then be donated to the charity.
Or you could consider a charity gift for relatives who are particularly tricky to buy for. Charities offer several options, so you can ‘give’ your loved ones anything from Christmas dinner for a homeless person to a goat for a farmer living in poverty.
Essentially, you make a donation on their behalf, and they receive a note telling them what you’ve done.
Charities run these schemes differently, so your money may be going towards a specific item, or it may represent something more broadly.
The goat, for example, is offered by Oxfam’s Unwrapped scheme and donations are used to help farmers living in poverty – but there may not be an actual goat involved. You can tick the box and get Gift Aid on your present too.
It may seem like a lot to ask to give extra to others at a time when you’re already buying presents for the world and his wife.
If you’re struggling to see how to make it work in November or December, you could consider a commitment to a charity for 2022, and donate regularly each month instead. Charities will often let you set up direct debit donations for as little as £2 a month.
It’s not much to part with on a monthly basis, but you’ll be surprised how it adds up. I set up a charity direct debit for £5 a month 20 years ago, and although it has never made a material difference to my budget, somehow over that time it has added up to £1,200.
It’s not a bad result for something that’s definitely far less chilly and humiliating than door-to-door carol singing.