Christmas is supposed to be the season of giving, but when it comes to actually doing so most of us are horribly confused.
There are roughly 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 boxes outside department stores.
We slip spare change to homeless people and buskers. And we occasionally fall prey to chuggers on the high street, ending up with direct debits to rich charities in which we have no real interest.
But what we don’t do is give coherently 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.
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? Once you have decided whom 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 big charities spend more on 4×4 vehicles and five-star hotel rooms than they do on alleviating suffering, and it is true that not all organisations are equal in their efficacy.
The good news is that there are now ways to judge charities relative to each other.
Start with Intelligent Giving. This site (which estimates that the typical UK charity spends only 12% of its budget on overheads on an annual basis) can help you find a good cause 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, 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 an organisation to the kind of salaries its staff get.
If you need more detail, you might turn to New Philanthropy Capital (NPC). This is a newish organisation designed to 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 helping disabled children. It analyses charities in the same way 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 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. In addition, higher-rate taxpayers can claim an additional 18p through their tax return.
Another possiblity to add to your purely charitable giving – and one that I really like – is to lend via a micro-credit site such as Kiva.org. You decide what you want to lend (the minimum is $25) 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 that your borrower does not default, 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. This is a charity designed to help people to get rid of shares that are worth too little to sell – perhaps those left over from the technology crash of 2000. 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 more than £1m a year).
The final option for those thinking about do-goodery this Christmas is to give of yourself, such as taking a sabbatical to work for a charity. But if you are thinking of doing this, you had better get moving before Christmas.
Our economy is quite clearly a mess. House prices are really falling now – down 2.4% in only three months. Credit is getting harder to find and more expensive. November retail sales grew at 1.2%, below the average for 2006 and 2007. Growth in the services sector 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, mainly due to rising food prices.
At the same time our financial-services sector is suffering as the credit crunch bites and public-sector spending growth slows.
Not long now and unemployment is going to start rising everywhere from the City down. And what do the professional classes do when they are made redundant? Charity work.
Sign up now to get ahead of the rush.
First published in The Sunday Times 9/12/07