Despite or perhaps because of the air of rampant consumerism, Christmas is a time of year when many of us think about giving to charity.
But with nearly 200,000 registered organisations vying for your attention, the question is how best to go about it, and who to give your money to.
The easiest solution is a cash donation to a favourite charity. Some people fret about about whether the big ones spend too lavishly on advertising and other overheads. However, Intelligent Giving estimates that overhead spending at a typical charity is only 12% of an annual budget and, in many cases, is much lower. Furthermore, many good charities have been forced to boost advertising in recent years as donations have lost ground to the national lottery.
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There are three main ways to make cash donations as a single gift, a regular contribution, or in sponsorship resulting from that New Year's resolution to run a marathon. Make sure it's all done tax efficiently by claiming gift aid. On single gifts this just means filling in a form that effectively turns your £1 into £1.28 for the charity.
For your marathon sponsors, sites such as Justgiving make this process pain-free for multiple donors. If you prefer to make regular gifts, check whether your employer runs a payroll scheme if so the charity can reclaim income tax on your monthly gift.
If you are dusting down your portfolio, remember you can also give shares to charity. Some people hold old, worthless stocks I have some in Jarvis simply because it would cost too much in charges to get rid of them. So why not fill in a form at ShareGift and donate them to charity? You get full income tax relief, so a £6 gift becomes a £10 donation, and is exempt from capital gains tax.
Some charities let you buy and send cows or goats to poorer countries. But be more wary about giving animals. Innovative but controversial conservation charity the World Land Trust, says that animal gift schemes are "environmentally unsound and economically disastrous" (each animal needs between two and four acres of land for feed). Also the costs of sending a cow vary hugely from charity to charity yet surely a cow's a cow?
Rather than donating animals, or anything else, why not let the recipient decide what they need by lending money to get a local project started? Sites such as Kiva specialise in so-called "micro credit". You decide how much you want to lend and for how long (the minimum is $25) and they match you to an overseas borrower a $55 loan, for example, got a villager in Ghana started in the mineral water trade. The loan can be made securely via credit card and assuming the borrower doesn't default (most don't) all you sacrifice is the interest you'd have earned elsewhere.
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