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  1. Impact Philanthropy
April 30, 2014updated 11 Jan 2016 2:15pm

How to make sure your charitable donation goes further

By Spear's

The purpose of Community First has been to encourage more philanthropy in the UK. Our research, published in the ‘Shine A Light’ report, has shown us that supporting communities is important for people of all ages across the UK.

More than 22 million people already give money. Crucially these people want to do more, with one in 10 already giving more money locally than they did the year before and half stating that they would increase the amount they give if they could see the direct impact of their donation.

Community First, a scheme set up by the Cabinet Office to benefit charities, makes a high net worth donation go even further and maximises the value of this desire to give. The project offers a 50% Government match on funds. It aims to stimulate interest in long term philanthropy and focuses on tackling social issues in communities, which should be important issues for all donors. The scheme, now in its fourth year, has opened up philanthropists eyes to the value of match funding.

For a high net worth donor, a Community First matched gift can be used to address any issue in a community. Above a certain level is where matched funding can make a real impact. For example, a donation of £100,000 can achieve an additional £50,000. The community foundation can then claim £25,000 in Gift Aid (if the donor has paid enough tax) and the donor can claim higher rate tax relief of up to £37,500, which is clearly attractive to high net worth individuals who want to give.

We’ve made the Community First matched programme work across our network because we recognised the unparalleled opportunity it provided to increase the amount that could be given to charities and organisations tackling need on the frontline. Over the past three years donors have invested c. £53 million through the scheme. With the Community First match, this brings total endowment as a direct result to £81million.

As well as Community First showing how we can leverage money for our donors, one of our other leveraging success stories is the Fair Share Trust, which was established by the Big Lottery Fund in 2003 and delivered through community foundations over the following ten years. It succeeded in building up and strengthening some of the UK’s most disadvantaged communities, shining a light on the social action that exists where people are entrusted to plan for their own future.

Not only was investment important, but so too were our community foundations’ economies of scale. Through our investments, over the ten years, the original £50 million donation was increased to £51.5 million to be given out in grants and covered delivery costs for 30 organisations. On top of that, an additional £25 million of grant funds were leveraged through community foundation networks and relationships meaning that a total of more than £75 million was distributed.

If you give to a charity, it makes sense to want to make that donation go further. UK Community Foundation’s model is an effective operation, attractive to high net worth individuals who want to apply as smart a strategy to donations as they do to their own financial planning.

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Our model of having several funds under one roof ensures that low overheads are the norm with costs spread across many funds. It also facilitates easy sharing of expertise and learning across our members. There’s also reduced waste for the groups funded because one grant application to a community foundation has the chance of being funded by multiple donor funds. This makes giving

to a community foundation a particularly financially effective model, and one which delivers huge impact.
Alongside our economies of scale, the Community First programme has also been invaluable in encouraging donors to give morelocally. It has proved that matched funding encourages even more giving for those donors who appreciate the value of leveraging.

Stephen Hammersley is chief executive of UK Community Foundations

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