How much should you give to charity?

When it comes to deciding how much to give to charity, there is no wrong or right answer. Some recommend giving 1% of your monthly income to charity, while others recommend between 3% to 10%. 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 (Cash, Investments, Gold & Silver) to help the destitute & 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 charities.

How much should you give to charity?

You can see, there is no one answer to the question of how much should you give to charity. Obviously when it comes to donating to good causes, giving something is better than nothing. 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 very wealthy person than to your an average person. 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.

Doesn’t your tax cover it?

There is the argument that our regular contributions to charities and community projects comes 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.

Thing is, giving to charity is a personal choice as opposed to a social requirement. At the end of the day, we do not have to give to charity if we don’t want to. It’s what makes us respect those who do give generously, as they are choosing to do so as opposed to being required to. However, when we do choose to donate to charity, we want to know where our donations go and what the impact of our gift will be. It’s understandable to want to know how far the money you donate goes and whether you want to donate more to make more of a difference.

Every now and then

Here in the UK we are a generous bunch when it comes to giving to charities. 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 over the course of their lifetime, and around 68% of the UK’s population gave to charity in 2019. 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, donating money peaks in November and December each year, while sponsorships reach its 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.

Donations and your age

The pattern of giving can change over your lifetime, depending on your expenses and financial commitments. Working professionals in their 20s might have more disposable income than people in their 30s and 40s with a full-time job and young family to look after. Likewise, young people who are yet to enter the world of work are in a better position to donate their time to volunteer than those in full time occupations.

Technology is also 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.

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.

Nazrul Hoque – 1 May 2021