Posts Tagged ‘Third Sector’

The wealthy young give more to charity than their older peers

According to NPC’s Money for Good Report, young, high-income workers tend to give more to charity than their older Make-a-Difference-Flickr-indyeah.jpgpeers.

Those on a high income (which is based on a household income of £150,000 plus) and aged 18-34 give £2,301 on average every year. This is significantly more than the average high income donation of £1,282. High income donors make up 1% of the UK population but contribute 10% of its charitable donations.

As the voluntary sector comes increasingly under pressure, with falling income and growing demand for services, the report shines a light on who gives to charity and why.

The report has found that charities currently under-perform in the areas donors care most about. Donors would like more of an explanation on how donations are used and evidence of its impact. The report revealed that people would give more if the charity provided information on how their donation was used.

Ipsos MORI (a leading research company) surveyed 861 high income donors. Within that group it was found:

  • Male high income donors give more to charity than female ones, giving on average £1,417 a year compared to £979 for women – although this may reflect individual income within the household.
  • Sponsorship is the most used method of donation,
  • There is a stronger preference for direct debits than amongst mainstream donors.
  • 43% had also given time as a volunteer in the last year.
  • The three most popular causes are medical research (59%), children and young people (46%), and hospital and hospices (44%).
  • 24% give to schools, colleges, universities and other education.

Money for Good is the biggest ever UK study of donor motivation. Its aim is to increase the quantity and quality of giving, helping charities to appeal more to the giving public. It identifies different types of UK donor, each distinguished by their particular giving habits, for example Good Citizen – ‘I give because it’s the right thing to do.’ Within these types, the largest group of high income donors is the Ad Hoc Givers (31%) who donate because they are asked to do so, for example, at an event or via sponsorship.


Don’t forget as well as the philanthropic effect of giving to charity it does have other benefits. For those looking to reduce their income to avoid losing Child Benefit charitable giving is a great way to bring your income back under the £50,000 threshold.

Even if you are not doing it for Child Benefit charitable giving extends your basic rate tax band by the gross amount you give to the charity. So, in other words, it could save you some income tax.


Charities – the ticking pension time bomb

Much has been written about the ticking time bomb faced by charities that participate in multi-employer pension schemes. These multi-employer schemes are a minefield for the uninitiated.

If you’re a member of one of these and you:

· Find yourself with no active or eligible members; or,

· Become insolvent; or’,

· Undertake a merger or other restructure

you could find that your Trustees are on the hook for liabilities way in excess of the reserves and funds that you have.

Take the recent example of The Wedgwood Museum that faces having to literally sell off the family silver to pay a pension debt much of which was nothing to do with it. It’s “crime” was to find itself as the “last man standing” when the Wedgwood group of companies got into financial trouble.

Following this high profile case (which you can read more about by clicking here) the Third Sector and pension industry have been lobbying government. Their case was that the legislation that caused this was meant to stop limited companies from walking away from their pension liabilities following a group restructure. It was, therefore, unfair to impose this fully on charities that were not seeking to walk away from their liabilities.

Conservative peer Lord Flight raised the issue in the House of Lords yesterday, calling for the legislation to be amended to avoid museums and charities being forced to sell their assets.

On behalf of the government, Baroness Rawlings said it had reviewed the Wedgwood case carefully and believed that it would be inappropriate not to apply this rule to charities.

So there seems to be no real will to exclude the Third Sector from the unintended consequence of the legislation. This is potentially bad news. With the drive to outsource public sector services to the Third Sector more and more charities are being asked to consider taking on employer membership of multi-employer schemes such as those within the Local Government Pension Scheme.

If you are a Trustee of a charity that is tendering for this type of contract, or if you’re already in one of these scheme, be very very careful. Take professional advice and enter into any agreement with your eyes wide open.

Steve Clark

Steve Clark has provided front line advice to a number of high profile charities on their pension strategy. Currently, 44 Financial Ltd advise a number of not for profit clients on the business risks associated with outsourcing and pension and benefit liabilities. You can email Steve by clicking here.

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