The pandemic and its impact on the economy have also taken a toll on charitable giving. In fact, according to independent charity Pro Bono Economics, UK charities are struggling financially in 2021 and one in 10 are facing bankruptcy. Over the next six months alone, UK charities will lose an estimated £6.4 billion in income.
Even if you’ve been affected by the pandemic and cutting down on giving, there are ways to stretch every pound you still give.
Perhaps the most important metric to focus on is value for each pound you give.
Some charities are more efficient in using donations, putting a large percentage of them directly towards the cause. Others have much larger overhead expenses or spend a lot in fundraising and management. For charitable giving that makes the most of what you give, choose efficient charities.
According to data published on GoodBox, charities spend anywhere between 26% and 87% of donations on actual charity work. The rest goes to administrative support or resources.
For example, the British Red Cross spends 80p of every £1 donated helping the needy. The rest goes to other costs. Meanwhile, the British Heart Foundation spends at least 70p of every £1 donated on charitable activities. All the rest goes to fundraising and generating income.
If you’d like to know how your favourite charity is spending money, you can check the Charity Commission website, which lists detailed financial information.
Consult databases that do the legwork for you
If going through charity records one by one seems overwhelming, Charity Clarity has done the work for you. While there’s no centralised organisation that keeps track of charities in the UK, Charity Clarity is a good place to start, though their database is still small.
They assess charities based on 18 different metrics, including their financial health, transparency and accountability. Then they rate them from one to five, with the highest score signalling where your charitable giving would go the farthest.
Charity Clarity offers a top-10 list to make things as easy as possible, or you can search their database to see how a charity you’re interested in is doing.
Plot your path towards financial freedom with our new Hero’s Journey tool!
MyWalletHero is here to help you learn about taking control of your money, whether that’s paying off debt, working towards a short-term money goal, or investing for your future.
Our latest tool can help you understand the next steps on your journey – simply choose a goal that best describes your current interests to get started.
Donate your time and knowledge
Small, local charities can significantly benefit from charitable giving that goes beyond your money. This doesn’t mean you should stop donating cash, but adding services or time on top of it can stretch every pound you give.
For example, if you have specific skills (perhaps you’re a lawyer or a copywriter) the charity can use, you can offer them for free. This means the charity can spend its funds on something else instead of paying for those services.
Own office or event space? Donate it for free use to hold fundraisers.
Keep your focus small
You might be tempted to give to as many places as possible, but smaller amounts have a smaller impact. Consolidating your charity giving at one or two charities will stretch your money further.
You can also take advantage of special occasions such as your birthday to hold your own fundraiser. Platforms like Facebook allow you to kickstart a fundraiser with your own donation so people can then contribute more money.
Some offers on MyWalletHero are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.