Charities lose ?395m in tax perks

Charities are losing out on ?395m a year because members of the public donate money without making sure they take advantage of charitable tax breaks.

Less than a quarter of donors gave to charity on a planned, regular basis, making it harder for charities to claim tax back on the money, according to research published today by Direct Debit

The figures show there is plenty of room for charities to recruit more regular donors - the prized "committed givers" - although figures released last month by business analysts the Centre for Interfirm Comparison showed committed giving increased by 18% last year and shot up by nearly 70% over the past three years.

The Direct Debit research revealed that more than half of donations (57%) were given in spontaneous moments of generosity through methods including street collections and sponsored events, which do not necessarily take advantage of charitable tax breaks.

Only 24% of those surveyed gave to charity on a planned, regular basis, while 35% said they gave only occasionally and 26% said they gave what they could afford when they were asked to.

Of those who gave money on a regular basis, more than half (53%) did so by Direct Debit. Another 10% used standing orders and 8% gave through deductions from their wages. A quarter of regular givers said they made their donations by cash or cheque.

Fergus Rose, marketing director at Direct Debit, said: "For every pound donated to charity, 28p is reclaimable through charity tax exemptions, and while spontaneous donations are a great source of income for charities, these kind of contributions are not always tax redeemable.

"Currently, less than a quarter of donations made to charities are given in a planned and regular method payment such as Direct Debit and subscriptions."

Donors can increase the value of donations through the Gift Aid scheme, in which the Treasury tops up donations made by UK taxpayers to bring charities an extra 28p for every ?1 donated. Charities' Direct Debit forms and other schemes for regular giving often include a Gift Aid declaration.