Giving to charity: ways to ensure your cash goes to the right home

17 May 2016

The past year has seen charities in the UK hitting the headlines with a number of scandals
– from Age UK allegedly pushing pricey energy deals on to the very people it is meant to help to 92-year-old Olive Cooke’s suicide after being hounded for money by almost 100 charities.

On top of this, it’s been revealed that some charities are paying their executives six-figure sums, while children’s charity Kid’s Company has been in the news after it collapsed due to financial mismanagement.

With this backdrop, trust in charities is predictably at an all- time low.

But with many doing charity runs and bike rides over the summer, Moneywise explains how to be certain your donations go to the people who really need it, and how to ensure you aren’t harassed for more cash afterwards.

Don’t be put off giving

First, be reassured that the scandals detailed above have acted as a wake-up call for the third sector, and investigations have been launched by both the government and the Charities Commission, which registers and regulates charities in England and Wales. The spotlight is now firmly on charities to clean up their act.

“Our message to the public is do not be put off giving to charities – they do really important work, helping those in the greatest need – but be vigilant and take steps to make sure you are giving safely to legitimate charities,” says a spokesperson from the Charities Commission.

Who to donate to

You can check whether a charity is genuine by searching for it on the Charity Commission’s online register of charities at

You can also check who runs a charity, its income and its spending by searching for it on the Charity Commission’s website.

Also search online to check what percentage of your money will make it to good causes. gives details of how much money goes to helping the people and causes the charity represents, as opposed to money spent on governance or fundraising.

Age UK, for example, passes on 73% of its donations in charitable spending, while the rest goes on in-house costs and fundraising.

Taking the time to research the charities you want to give to ensures you understand their aims, how they hope to achieve them, and how much of their money is passed on to good causes.

(Click the table below to enlarge)

When you are choosing the charities you plan to support, don’t forget about small, local causes. Research by TSB found that while half of us felt local charities played an important role in their community, only 14% supported these charities.

“Small, local charities play a vital role in helping communities across Britain to thrive, and our research shows just how difficult it can be for them to get the support they need,” says Nigel Gilbert, TSB’s chief marketing and communications officer.

This is particularly important, given many big charities have been attacked recently for not passing on enough of the donations they receive to the causes they are meant to support.

A report last year by philanthropic organisation the True and Fair Foundation found that many of the nation’s biggest charities pass on less than half the income they receive.

The British Heart Foundation, for example, was found to spend just 46% of its income on charitable activities over the past three years, while The Dogs Trust managed 63%, and Shelter 64%.


“It is an utter disgrace that so much of the money people generously give is going to feed large charity machines, which are often characterised by obscene overheads and salaries, aggressive fundraising, and bloated marketing and publicity departments, resulting in a questionable level of charitable spending,” says Gina Miller, founder of the True and Fair Foundation.

The charities, however, argue back. “We would strongly dispute that this report is evidence of financial inefficiencies or poor governance within charities,” says a spokesperson for the British Heart Foundation. “It doesn’t take in to account the variety of ways in which charities are structured, which inevitably affects how much they need to spend to generate their income.

For the British Heart Foundation, it doesn’t account for the fact that we run the largest and most profitable network of charity shops in the UK.”

The British Heart Foundation states that of the £147.3 million raised in 2014/15, around 78% was available to fund life-saving research and help heart patients.

Campbell Robb, Shelter’s chief executive, says: “As our Annual Report states, we spend 80% of our voluntary income on helping people through advice, support and campaigning. This is a robust and accurate calculation based on our average expenditure over five years.

“Without the donations from our generous supporters and corporate partners we couldn’t be there to help the millions of people who need us each year. We use all donations carefully and responsibly so that we can help as many people as possible, and continue our fight against bad housing and homelessness.”

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How to donate

Once you’ve picked your charities, the next step is making sure you give efficiently. There are numerous ways you can donate to charity, but some are better than others.

One is by making a one-off donation. If you do this and you pay income tax, also make sure you Gift Aid it. This allows the charity to claim back the income tax you paid on the money you gave them, meaning your donation is boosted by 25%. So if you donate £10 and tick the Gift Aid box on a declaration form charities can provide, the charity benefits to the tune of £12.50.

Higher- and additional-rate taxpayers can also reclaim the additional tax they’ve paid on charity donations through their self-assessment form with the option to donate that reclaimed tax to charity too.

Another method of donating is to give to charity via your payroll.

This is the best choice if you want to make regular donations as it is the most tax efficient. This method means you donate a regular amount from your salary before income tax is deducted.

So if you are a basic-rate taxpayer, you will pay 80p for every £1 donation; if you are a higher-rate taxpayer, a £1 donation will cost you just 60p; and if you are an additional-rate taxpayer, your £1 donation will cost 55p.

In order to donate via your payroll, your employer must have a payroll-giving scheme in place. If it doesn’t, encourage it to set one up.

It is a relatively simple process that will allow employees in the whole business to be more charitable.

The Association of Payroll Giving Organisations ( can give you more information.

Another tax-efficient way to donate to charity is via a legacy in your will. “Gifts in wills are the foundation of many of Britain’s charities, creating more than £2 billion for a provision of critical services each year,” says Rob Cope, director of Remember a Charity, which works with member charities to encourage people to give via a will.

It is also worth noting that leaving money to charity in your will can cut your inheritance tax bill. If you donate 10% or more of the value of your estate to charity, then inheritance tax falls from 40% to 36% on some assets.

Charity and fundraising sites are a popular way to give although, as our table shows, not all of your donation makes its way to the charity.

Protect yourself from harassment

Once you’ve chosen your charities and how you plan to donate to them, make sure you take steps to stop being harassed for more money.

Last year, 92-year-old Olive Cooke committed suicide after being hounded by more than 460 requests a year for money from charities. A resulting investigation found that 70 charities had bought or shared Olive’s details, so she was being pestered by causes she had never even shown an interest in. As a result, charities are no longer allowed to sell on their supporter’s details for commercial gain.

You can minimise the amount of calls and mailings you receive by making sure you tick any opt-out boxes when you make a donation. Also, sign up for the Telephone Preference Service ( to stop receiving cold calls.


You can also register with the Mailing Preference Service ( to stop unsolicited post from charities.

But the service can’t stop post that is directly addressed to you. In this scenario, you need to contact the charity and ask to be removed from its mailing lists. State in your letter that you do not want to be contacted for marketing purposes or have your personal data used for direct marketing.

Also say that if you continue to hear from them you will complain to the Information Commissioner’s Office (ICO) – an independent body set up to uphold information rights.

If a charity doesn’t stop pestering you when you’ve asked it to, then complain to the ICO.