October 28, 2019

How much should I give to charity?

The answer to this question can often vary, based on who you ask. Some recommend giving 1% of your income to charity each month, while other recommendations range between 3% to 10%. But when we account for different incomes, living expenses and unexpected costs – we realise that it’s rarely that simple.

At GoodBox, we’re passionate about making it as easy as possible for people to give their hard-earned money to a worthwhile cause. This is what we hope to achieve with our contactless fundraising boxes. In this article, we’ll be answering a range of common questions people tend to ask when deciding how much they want to donate to charity.

What is the average donation size in the UK?

In a survey of 6,293 UK citizens aged 16 and over, the average person donated £27 to charity between 2020 and 2021. This is a 35% increase from an average of £20 between 2013 and 2014. While many people have experienced financial difficulty over the last year, it seems that the unprecedented circumstances our world has faced have encouraged many to dig deep.

How can we decide how much to give to charity?

While the fact remains that there is no wrong or right amount to donate, this may not be of much use to those who want to give back to their community but are unsure how best to go about it. These people want to explore the options available to them, before deciding which one will help them feel as though they are making a difference, while still remaining financially sustainable.

If you do want to give generously then you could try to give an amount that is more of a sacrifice to you than an unnoticeable donation. Obviously, giving £1 to charity will feel less of a sacrifice to a millionaire than to your average Joe Bloggs. Take J.K Rowling as an example – the world-famous author actually lost her billionaire status after donating an estimated $160 million in charitable donations. This is arguably a ‘generous’ donation because it meant she sacrificed a large proportion of her overall wealth to good causes. Therefore, the value of a ‘generous’ donation to a good cause is relative to what you can afford and are willing to give, and how often.

There are also many people that seek out benchmarks or parameters to help them decide how much to donate to charity. For example, throughout history different religions have given guidance on how much their followers should donate to those in need. The Quran specifies that as part of zakat, Muslims should give 2.5% of their wealth to help the alleviation of poverty. While according to Christian and Jewish tradition, followers are recommended to give 10% of their wealth (also known as tithe).

There are other markers to go by too. The benchmark of development aid that the UK government has to donate each year to overseas causes is 0.7% of its gross national income, though other countries have given more than this. And according to the CFA’s report, the FTSE 100 companies donate on average 2.4% of their pre-tax profit to charity.

It’s also worth mentioning that there are more ways to donate to charity than simply contributing a certain percentage of your income. Below are a few examples of how you can donate to charity that are perhaps more flexible or more feasible to maintain over a long term:

Asking for charity donations instead of gifts

By asking people to donate to a chosen cause for your birthday, you can save on your monthly income while still making a regular contribution. Facebook birthday fundraisers are a primary example, and they also make it easier to share your choice of gift amongst your friends and loved ones. It was estimated that between 2015 and 2020, Facebook birthday fundraisers have raised over $1b in donations.

Donating any extra money that we receive

Sometimes the best way to donate isn’t by deciding on a certain amount or by creating a schedule of regular donations, but by having a rule or principle in place. For example, say you get a tax rebate or an unexpected bonus. If you hadn’t received that money, it’s unlikely that you would have missed it – so why not donate it to a worthy cause?

Saving over time to make a large one-off donation

By choosing to donate this way, you can find comfort in the fact that you are sticking to a regular donation amount, while also having something to fall back on in the event of an unanticipated expense. You can either choose to place this money into a separate savings account or perhaps leave a large sum in your will to a charity or non-profit.

Why should I donate to charity when I already pay taxes?

You might be thinking, why should we regularly give to charities anyway? There is the argument that our regular contributions to charities and community projects come out of the tax we pay to the government, as a certain amount of the government’s budget is always designated to charity funding. However, austerity measures are reducing the funding given to charities, non-profits, public services and schools, which has resulted in a greater dependence from these organisations on donations from the public. As charities and public services struggle to get by with tighter budgets and less funding, it’s understandable to feel the need to give more beyond tax.

Also, while we’re on the subject of tax, it’s worth remembering that Gift Aid is a great incentive for regular charitable giving. All you need to do is make a declaration that you are a UK taxpayer and the value of any cash donations you’ve made to charity increase by 25%. This is the long and short of it, but there are some other factors to consider. Why not find out more by taking a look at our guide to Gift Aid?

At the end of the day, it’s the fact that we don’t have to give to charity if we don’t want to that makes us respect those who do give generously. However, when we choose to donate to charity, we want to know where our money goes when we donate and what the impact of our gift will be. This is a crucial factor in our decision of exactly how much we want to donate.

How often should I donate to charity?

Here in the UK we are a generous bunch when it comes to giving. In fact, we are one of the Top 10 of the world’s most generous countries. The average person in the UK will give nearly £30,000 to charitable causes throughout their lifetime.

However, the vast majority of us only donate from time to time as opposed to being regular givers – 51% of UK givers donate infrequently, in comparison to the 25% of people who give money on a monthly basis. These one-off donations are often part of seasonal donation trends – for example, donations tend to peak in November and December each year (likely due to Christmas appeals), while sponsorships reach their annual apex in June (which is understandable from the higher number of sporting events that take place).

While donating at any time of the year will aid charities in carrying out their fantastic work, by giving regularly you can help them have a greater impact on their beneficiaries. It ensures that charities can better plan their future support as they know that they can rely on regular funds from recurring donors. Relying on one-off donations, charities have to predict how much money they will receive from an event or campaign, and sometimes the funds raised are lower than expected. With recurring donations, charities have the certainty of a regular amount of support coming in. If you are a frequent giver, becoming a regular donor also helps you spread the cost of your support over the year instead of donating larger, one-off sums at infrequent intervals.

Does the average donation amount vary as we get older?

Giving patterns can often change over your lifetime, depending on your expenses and financial commitments. In 2019, the Charities Aid Foundation sought to understand how donation amounts change as we get older. For example, people aged 65+ had the highest average donation amount (£21) in 2018, whereas people aged 16-24 donated the lowest average amount (£11). This is not to suggest, however, that younger people are less generous or vice-versa. People in this particular demographic tend to have less disposable income and many of them are in full-time education. Furthermore, it’s not unreasonable to assume that older people have become loyal to a certain cause over time. A final point to remember is that younger people are more likely to do volunteer work, which suggests that they may find donating their time to be more valuable than their money.

How is technology changing how we donate?

The creation of contactless donation devices and mobile donation apps allows us to donate with a simple tap. While AI technology allows for faster and more accurate donor behaviour analysis, helping charities provide a more personalised experience to donors and discover target audiences who are more likely to be responsive to their cause.

As a consequence, technology is transforming the relationship between donors and charities forever, changing how we donate, how much and how often. For example, at GoodBox we’ve found that our contactless giving technology increases the average donation size to £11.90!

So you see, there is no golden rule of how much to give to charity. Some like to have a set figure to give to good causes every month, such as donating 1% of their income or signing up to a monthly donation scheme. Others prefer to donate when they feel the need, choosing how much to donate there and then. This could be as cash donations, contactless giving or mobile donation apps that allow users to donate on the go. However we choose to donate, we should know what impact our donation is having. This allows us to know if we feel we have given enough to charity, or if we want to give more to ensure that our donation has a bigger impact on those in need. Donating to charity is personal, so regardless of how much your friends, family or colleagues give, you should feel happy with the amount you donate knowing that it will help to make a difference.

While on the topic of cash donations, who actually carries cash nowadays? You may still have a couple of coppers knocking about at the bottom of your bag, but chances are today you only take cash out when you need it. This means that if and when you do give a cash donation to a charity, you’re likely to not be giving very much.

All of our products, from our contactless donation boxes to our card readers, are designed to allow charities and nonprofits to raise funds in a modern way. Our tap and donate technology embraces contactless giving, helping organisations continue to raise money for charitable causes even when their donors don’t have cash to hand. If you are wanting to collect money for charity yourself, we can help you too. From charity fundraising events to museums and places of worship, our cashless donation devices can help groups and organisations raise more funds for their chosen cause.

To find out more about how we can help you give more to charity, contact our experienced team today or download a product brochure to see how a contactless donation box can supercharge your fundraising efforts.