The UK Giving 2007 report reveals that the UK population gave £9.5billion to charities in 2006/07, which is 3% lower than the previous year. In 2005, 78%, or about four in five, of the population had given money to charity in the previous four weeks, giving on average £15.5
- 57.6% of the UK adult population – 28 million people – each month givesat least once;
- three-quarters of the total amount given in an average month is donated by the one-quarter of donors who give £25 or more;
Women are more likely to give to charity than men in an average month, with 59% giving compared with 48% of men. While men are less likely to give, when they do so they tend to give more than women. This fact may be linked to gender inequalities in income.
Regarding the method of giving the Ncvo says that a slight increase, up 7% in the past three years, in donations given by regular methods such as direct debit. It is perceived as a good news for charities, because these imply an ongoing commitment from donors and particularly with the use of direct debit the amounts given is larger than through cash-giving.
The most commonly used method still remains giving by cash, with 48% of donors that give through it. However direct debits raised 24% of the total donated compare with the 18% by cash.
The UK now has one of the most favourable tax regimes for charitable giving in the world. This is a result of a range of fiscal initiatives set under way in the late 1980s and accelerated since 2000. If charitable legacies are included, total tax relief on charitable giving are worth well over £1 billion today.
Within the UK voluntary sector there has been increased effort to maximise the potential of tax efficient giving with two main mechanisms: the payroll giving and gift aid.
Payroll giving is used only by 3% donors and allows employees, or occupational pensioners, to give money to any UK charity directly from their pay, before tax is deducted. This means that it costs the donor less and charities get more.
The UK gift aid was introduced in 1990 and is currently the most widely used tax-efficient giving scheme in the UK, accounting for over 90% of all tax-efficient donations by value (excluding legacies). A UK tax payer can use the gift aid to increase the value of its monetary gift to a UK Charity or Community Amateur Sports Club (Casc) by allowing them to reclaim tax on its ‘gross’ equivalent (its value before tax was deducted) at the basic rate of 20%. In practice this means that for every pound donated to charity using gift aid the charity can claim an additional 25 pence from Her Majesty’s Revenue and Customs (Hmrc).
The basic rate tax has change from 22% to 20% in April 2008. In addition Hmrc will automatically pay the charity a further 3 pence for every pound gift aid donation it receives between 6 April 2008 and 5 April 2011; this transitional relief has been provided by Government to allow charities to adjust to the fall in basic rate tax. This means that for every pound donated under the gift aid scheme the charity will continue to receive 28 pence.
The analysis of giving through Gift aid January 2006 reveals that around 10 million UK adults now use gift aid for one or more of their donations in an average month and the value of individuals’ donations through gift aid (and covenants) reached £2.2 billion in 2004/05, excluding the value of the tax reclaimed by charities. If the reclaimed tax is included, the total gross amount received by charities from the gift aid scheme was £2.8 billion.
