Can I make charitable gifts to reduce my tax band?

[PinkDalek]

I have used CAF for more than 40 years is because it is a great way to support a number of charities with the minimum of personal administrative hassle.

For the same reasons, I have used CAF for over 20 years.

Has Gift-Aid been around that long?

Introduced wef 1 October 1990 but prior to then similar organisations (presumably including CAF from what the others report) were in existence for charitable donations via Deed of Covenant.

[Lootman]

For the same reasons, I have used CAF for over 20 years.

Has Gift-Aid been around that long?

Introduced wef 1 October 1990 but prior to then similar organisations (presumably including CAF from what the others report) were in existence for charitable donations via Deed of Covenant.

OK, thank you, I know nothing about it but I am thinking of using Gift-Aid this year for the first time and so this a timely and interesting thread for me.

I've always been a little cynical about charity intermediaries due to my passing familiarity with the United Way in the US, and various irregularities and excesses that happened there, including at least one prison sentence. So for now I will choose direct contributions to charities.

[Howard]

Has Gift-Aid been around that long?

Introduced wef 1 October 1990 but prior to then similar organisations (presumably including CAF from what the others report) were in existence for charitable donations via Deed of Covenant.

OK, thank you, I know nothing about it but I am thinking of using Gift-Aid this year for the first time and so this a timely and interesting thread for me.

I've always been a little cynical about charity intermediaries due to my passing familiarity with the United Way in the US, and various irregularities and excesses that happened there, including at least one prison sentence. So for now I will choose direct contributions to charities.

Ooo ...... you are a cynic!

CAF report they have been around for 90 years.

WE ARE CAF
We’re a charity, bank and champion for better giving, and for over 90 years we’ve been helping donors, companies and charities make a bigger impact. Our independence, expertise and reach mean we’re uniquely placed to do this.

see link at: https://www.cafonline.org/about-us

PinkDalek is right, I used to give through them by a Deed of Covenant.

Hope your donation is going to make a difference I guess you can afford a big one!

Good luck.

regards

Howard

[Dod101]

To Lootman

I have been returned to the UK for more than 20 years I am surprised to realise and Gift Aid has been around for I think all of that time.

To Howard

I do not disagree with anything you have said but from the practical point of view of a charity treasurer, mostly smallish local charities, I can say that donors do not normally add the tax that they have recovered (via CAF) to their donations as far as I could tell. If they were asked for a donation, they would have given £500 or £1000 whether or not it was Gift Aided. The result was that the charity would get a net £500 or £1000 if the donation came from a CAF account, but would get £625 or £1250 if it were Gift Aided.

This is now far removed from the OP's question so I will leave it there.

Dod

[Howard]

To Howard

I do not disagree with anything you have said but from the practical point of view of a charity treasurer, mostly smallish local charities, I can say that donors do not normally add the tax that they have recovered (via CAF) to their donations as far as I could tell. If they were asked for a donation, they would have given £500 or £1000 whether or not it was Gift Aided. The result was that the charity would get a net £500 or £1000 if the donation came from a CAF account, but would get £625 or £1250 if it were Gift Aided.

This is now far removed from the OP's question so I will leave it there.

Dod

Dod I do think you are persisting in setting up a straw man to knock down. And as you admit you were taking the discussion away from the original poster’s question.

However, as this thread is about managing finances and tax I am going to pursue this a little further.

The suggestion for using a planned strategy for giving such as offered by CAF is directly addressing the original question and makes good sense for someone who wants to plan how to offset their charitable giving against tax.

I don’t think your digression of suggesting that people who use CAF give less to charity holds water.

Anyone who sets out to tax-effectively plan their long-term giving by using CAF is hardly likely to have the aim of giving less in the long-term. I would argue that it is a sign of commitment to giving more and it is very likely that those who give millions to charities through CAF are giving more than the person who occasionally makes a generous gesture.

Do you have any hard evidence that CAF donors are less generous to charities in general than other givers?

If someone like the OP decides to give say £2,000 this year to minimise their higher rate tax it is highly likely that, if they set up a CAF account, they will give the same next year, all things being equal. In fact, if they get a salary increase they may give more. So if they give for 40 years they will donate at least £80k in today’s money, but probably much more. I would argue that this person would be potentially far more valuable to any charity they support than someone who gives occasionally and irregularly. They are more likely to give again.

And a charity would be wise to cultivate such a person and keep them away from a grumpy treasurer, who complains about the small amount of extra administration of dealing with an occasional largish cheque! I hope you didn’t accuse donors who gave £500 or £1,000 to your small charity of being parsimonious! If so, they were unlikely to follow up with bigger donations.

As someone who has been on both sides of giving and fundraising for a large charity, I have seen no hard evidence to support your argument. There is a lot of evidence that people who plan their giving using CAF (and other methods like Trusts) give far more that the occasional unplanned giver.

And coming back to the OP’s question. To organise one’s charitable giving using CAF is an idea worth considering.

regards

Howard

[Dod101]

All I will say Howard is that I was never a grumpy treasurer. I hope donors saw me as the opposite because I always ensured that donors had their gift properly and gratefully acknowledged. You call my observations a straw man. I could call yours flogging a cause to death, and as I said before I will leave it at that.

Dod

[Lootman]

All I will say Howard is that I was never a grumpy treasurer. I hope donors saw me as the opposite because I always ensured that donors had their gift properly and gratefully acknowledged.

If I may ask on a related matter, one concern I have about formally donating a decent sum to charity is that I then start getting lots of letters asking for more. Or worse my name and address gets sold to a "suckers list" so the quantity of junk mail I get increases exponentially.

This is a big part of why historically I have given in cash, as it is anonymous. But of course Gift-Aid cannot be anonymous.

Is a typical charity bound in any way to be discrete in this regard? I know that, at least with probate issues, they can be very aggressive.

[Dod101]

I sympathise with Lootman's point. For very personal reasons I give a Gift Aided donation (usually via the website) to Marie Curie and Myeloma UK quite regularly. Marie Curie was not what I would call aggressive but very good at marketing, fundamentally asking for money. I asked them to desist and they did.

Myeloma UK, I guess a smaller charity, have never asked me for more and I may say have always been very grateful. Incidentally both do a great job so far as I can tell.

I think the bigger charities can seem aggressive but are I think these days more subtle than they once were. There was a lot of adverse publicity a few years back with an elderly person or two and I think they see that being too aggressive is now counter productive.

Dod

[Howard]

All I will say Howard is that I was never a grumpy treasurer. I hope donors saw me as the opposite because I always ensured that donors had their gift properly and gratefully acknowledged.

If I may ask on a related matter, one concern I have about formally donating a decent sum to charity is that I then start getting lots of letters asking for more. Or worse my name and address gets sold to a "suckers list" so the quantity of junk mail I get increases exponentially.

This is a big part of why historically I have given in cash, as it is anonymous. But of course Gift-Aid cannot be anonymous.

Is a typical charity bound in any way to be discrete in this regard? I know that, at least with probate issues, they can be very aggressive.

If you give using Charities Aid Foundation, you can choose what information the charity receives as a default. So they offer the opportunity to protect your address and name if you choose. CAF have only ever mailed me a statement and I can choose the frequency. (Possibly they have written to tell me about a change in legislation or similar over the years, but I can't recall any other correspondence apart from some that I initiated).

However, as I have indicated above, a CAF account is best suited to someone who intends to give to a number of charities over some years.

regards

Howard