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Charity - how to give

Charity - Globe

The Christmas and New Year period is supposed to be all about giving. And by that, most of us find we want this to mean more than simply passing wrapped up bits of tat around our families: we want to give to charity too

But when it comes to actually doing so, we get horribly confused.

There are nearly 200,000 registered charities in the UK and our attention flits between them. We give a pound here and a pound there to people holding buckets at train stations or outside department stores.

We slip spare change to homeless people and buskers. We give a large lump sum away randomly at Christmas. And we occasionally fall prey to chuggers on the high street and end up with direct debits to rich charities we have no real interest in.

But what we don’t do is give coherently and regularly (all charities need support year round) to charities that we actively choose, that represent causes we have a special interest in and that we know use our money efficiently. This is because it isn’t actually that easy to do so. First you need to choose a cause from the thousands of deserving ones. Do you want to give money to help the homeless in the UK, to buy transport for rural doctors in Africa, to look after Aids orphans around the world, or perhaps to pay for cleft lip surgery for poor children in Asia?

And once you have decided who you want to help you have to find an organisation that you feel can do so for you effectively. This is the tough bit. There has long been a concern that the big charities spend more on 4 by 4s and five star hotel rooms than they do on alleviating suffering, and it is true that not all organisations are equal in their efficacy.

How to choose your charity

The good news is that there are now ways to judge charities relative to each other. Start with Intelligent Giving (www.intelligentgiving.com). This fabulous site (which estimates by the way that the typical charity spends only 12% of its budget on overheads on an annual basis) can help you find a charity that suits you. Just select a category on the site (say ‘human rights and peace’ or ‘elderly’) and it will provide you with a list of relevant charities. Better still, however, it will also go some way to help you rank the charities in order of worthiness: it offers all sorts of information, from the size of a given organisation to the kind of salaries its staff get and something of how transparently it is run.

Finally, and perhaps most usefully of all right now, the site rates the top ten charity Christmas cards on the market with reference to their to price, their design and the profile of the charities they represent.

This year's winner? 'Bethlehem', for The Alzheimer's Society which, according to Intelligent Giving's designer, is reminiscent of "a cosy night in front of a log fire, mugs of steaming mulled wine shared with friends and family, while outside it's cold and blowing a gale. Perfect."

If you need more detail on a given charity (or you have a great deal of money to give) you might turn to New Philanthropy Capital (NPC). This is a newish organisation designed help donors "understand how to make the greatest difference to people's lives."

It publishes reports on all sorts of areas in need of funding – from literacy support to small charities helping disabled children; it analyses charities in the same way that the City analyses listed companies; and it makes specific recommendations about areas it thinks are most in need of funds and the charities within those areas it thinks will use donations to the best effect.

Institutional givers and the very rich can get in touch with NPC for personal suggestions about giving but for the rest of us the website (www.philanthropycapital.org) is helpful.

Once you’ve chosen your charity, make sure you give tax efficiently by claiming gift aid – on single gifts this means that by just filling out one simple form you can turn each £1 you give into £1.28 for the charity.

Some other ways to help

Another possibility to add to your purely charitable giving and one that I really like the idea of is to lend via a micro-credit site such as Kiva.org. You decide what you want to lend (a minimum of $25 up) and the site matches you with a borrower – perhaps someone in Ghana needing basic farming equipment or a group of women selling local crafts in Kenya in need of materials.

You send the money with a credit card and assuming your borrower does not default (the default rate is very low) you will have sacrificed no more than any interest you would have earned elsewhere. A small price to pay for offering what in many cases is a life changing loan.

Another utterly painless way to give is via Sharegift.org.uk. This is a charity designed to help those holding shares – perhaps left over from the technology crash of 2000 – worth too little to sell get rid of them.

Just sign the shares over to Sharegift and they’ll amalgamate them with others until they have enough to be worth selling. Then they’ll donate the proceeds to charity (they take suggestions as to worthy recipients of the cash from their donors and are now giving away over £1m a year).

Expect a rush on charity work in 2008

The final option for those thinking about do-goodery this Christmas is to give of yourself - to take a sabbatical and work for a charity. But if you are thinking of doing this I’d get moving on it before Christmas.

Our economy is quite clearly a mess. House prices are really falling. There’s also good reason to think they will fall much further given how hugely they have risen in the bubble of the last few years and given the sudden difficulty new buyers are having getting mortgages.

Credit is getting both harder to find and more expensive, something that makes it clear the consumer spending boom is almost certainly over. November retail sales grew at 1.2%, the lowest level for four years. Growth in the services sector (which is supposed to drive our economy) is at its lowest level in four years. Inflation is rising – according to data from the British Retail Consortium shop price inflation is now at its highest level this year thanks mainly to rising food prices.

At the same time our financial services sector is suffering as the credit crunch bites and public sector spending growth is slowing. Not long now and unemployment is going to start rising at speed everywhere from the City down.

And what do the professional classes do when they are made redundant? Charity work. So if you do think you might want to get into volunteering next year, you might want to start doing your research now and get in ahead of the rush.

Written by Moneyweek editor Merryn Somerset Webb, who writes an investment column every month in Saga Magazine. Merryn's views are her own and for general information only.

 

The opinions expressed are those of the author and are not held by Saga unless specifically stated.
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