What is Charitable Giving?

Charitable giving is the act of giving money, time or goods to create positive change regardless of wealth or status.

Charitable giving can come in the form of donating to a food bank, financially supporting organisations on the frontline of the global COVID-19 pandemic or volunteering at a local community program. No matter how you choose to donate, charitable giving can help improve quality of life, strengthen communal bonds and elevate others.

History of Philanthropy

Philanthropy is defined as love for humankind. The word itself is first found in the works of the Greek playwright Aeschylus more than 2,500 years ago, but the combined concept of “philos” (loving) and “anthropos” (humankind) existed long before the invention of the written word. From the very beginning, civilizations around the world were built with the idea that empathy—caring for and understanding the needs of others—was critical to shared survival and growth.

Modern philanthropy began to take shape in the middle of the 19th century with the trailblazing generosity of George Peabody, Andrew Carnegie and many others. The Scottish American industrialist, Andrew Carnegie (1835-1919), wrote a seminal essay about philanthropy in 1889. In “The Gospel of Wealth”, he argued that wealth should be distributed in a responsible and thoughtful manner, calling on other philanthropists of his era to distribute wealth for the public good. Over the ensuing decades, captains of the industry and the growing middle class combined their charitable giving powers to tackle social issues in impactful ways.

A Modern Attitude

Modern philanthropy has seen many individuals use their collective charitable giving powers to address social challenges in transformative ways. NPT UK continues to collate data on the power of charitable giving and as our statistics highlight, the collective power of charitable giving is immense.

Other Insights:

Tax Benefits of Charitable Giving

The benefits of charitable giving include Gift Aid for UK clients, additional claims for higher rate taxpayers and income tax relief for gifts of shares. For those who are subject to taxation in the US and UK, NPT Transatlantic provides a tax-effective dual-qualified donor-advised fund.

For more information on all the tax benefits of NPT UK’s donor-advised fund, visit our Tax Advantages page.

Additional Benefits of Charitable Giving

The main beneficiaries of charitable giving are the charitable causes themselves. However, there are a number of reasons that make it beneficial to the donor, too. Charitable giving not only makes you feel good, but it can also generate other positive effects. For example:

Strengthening personal values. Charitable giving is a personal act and knowing that act has improved the lives of others often reinforces an individual’s personal values and sense of purpose.
Teaching children to give. It is important to show how one’s actions can make a significant difference.
Promoting justice and improving diversity, equality and inclusion. Through the act of charitable giving, you’re able to positively influence the society you want to be part of.

How You Can Give to Charity

There are various ways to conduct your charitable giving and make a meaningful impact, including:

Donations: Donating to a charity is the most common form of philanthropy in the world, with 62% of people in the UK giving to a charity via donation or sponsorship in 2020 and the average UK monthly donation to a charity being recorded at £49.
Donor-Advised Funds: A Donor-Advised Fund, or DAF, is a philanthropic fund established under an umbrella charity, like NPT UK, that administers the fund on behalf of the donor. A DAF allows donors to make charitable contributions, receive immediate tax benefits, and then recommend grants from the fund over time.

To find out more visit our What Is a DAF? Page.

Volunteering or Non-Cash Donations: Volunteering is the act of freely giving time and work for charity and community service. Many volunteers often help in their local communities, supporting foodbanks or aiding programs providing support to the elderly or their local environment.
Gift Aid: Gift Aid is the name of the UK tax incentive for cash donations. It is a split tax incentive between the donor and the charity. If a donor pays over the basic rate of tax, they are eligible to claim the difference between their tax rate and the basic tax rate on the gross donation when completing their Self-Assessment tax return.

For more information about Gift Aid, see our How Does Gift Aid Work? Page.

Leave a Gift in Your Will: There are many ways to support your philanthropic goals. A legacy gift can help you to fulfil your charitable mission beyond your lifetime.

Leaving a charitable gift in your will to a Legacy Donor-Advised Fund (DAF) at NPT UK will reduce the administration of your estate and help your executors with time and costs.

A gift to NPT UK allows you to have the option to remain anonymous in your charitable giving if desired. Visit Legacy Services for more information.