Company giving

Cash donations

  • Gifts of cash are the most obvious but also the most expensive way for businesses to offer support.
  • Larger businesses, such as Legal and General, create Trusts, which have specific aims to support local causes.
  • Charitable gifts and Trusts are tax deductible.
  • Under the Gift Aid scheme, businesses can make charitable gifts and subsequently deduct the value of the charitable donation from pre-tax profit calculations at end of year.

Gifts in kind

  • It is often easier and more affordable for companies to give ‘things’ rather than money, such as; products, items for raffles, old stock for resale or auction, pro bono technical advice or free or reduced cost use of facilities, for meetings and functions.
  • Items which are produced for trading, or items used in the production of trading goods (e.g. computers/ furniture) can be tax deductible under the Gift Aid scheme if given to charity. Full tax relief is also available on items with no ‘book value’ such as end of line stock or damaged stock.

Employee volunteering and secondments
Staff time can be offered for charitable benefit through:

  • Employee volunteering - which is an opportunity to increase employee skills and community involvement,
  • Professional skills - such as law firms, accountants, advertising or public relations firms. These related skills can be offered free of charge,
  • Secondments - helps staff develop skills in a new setting for a designated period. Especially appropriate for developing middle management.

Business advertising

  • Charities can attract a significant amount of attention through media coverage and events, and this provides many opportunities for business advertising.
  • The benefits of association with charity events and media are that businesses can show good will and support for the various causes.
  • Opportunities for advertising include; commercial advertising to reach a target audience (e.g. ‘front of house’ advertising, advertising in an Annual Report, advertising in conference programmes or at fundraising events).
  • Payment for advertising is not the same as a donation for tax purposes; the receiving charity may be liable for VAT as advertising is considered a business agreement.

Sponsorship

  • Sponsorship is a business arrangement between a company and a charity and is not a glorified donation for tax purposes.
  • The business contribution for sponsorship does not have to be money alone, other forms of sponsorship can include goods (such as a car), services e.g. free transport, free promotion, discounts on services or purchases.

The sponsorship agreement will include a company benefit of some kind, examples of benefits are:

  • An improved image, through association with the cause.
  • Free promotion of products, product placement in association with the cause.
  • A view to entertain (potential) customers.
  • Joint promotions (cause related marketing); charities become involved in promotional activity to help market a commercial product e.g. British Gas/ Help the Aged campaign.

Useful resources:

Payroll Giving

  • Payroll Giving is a workplace giving scheme whereby employees sign up to donate to a selected charity directly from their pay packet.
  • The donation is deducted at source by the employer and sent directly to their nominated charity, via a Payroll Giving Agency (PGA), who receive the donation plus the tax (which would have gone to the Treasury).
  • The scheme is easy to run, and open to all charities with a payroll, no matter how small.
  • There is usually a small administration charge though this service is free through WCVA for all employers in Wales. Offered free of charge through WCVA.
  • Employers offering Payroll Giving receive a Quality Mark, Certificate and Logo to recognise and reward employee participation and charitable support.

Useful resources: