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THE TRANSATLANTIC MAGAZINE

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1040 Abroad

Covid-19 and Charity: Planning your holiday giving

Joe Crome, a Senior Manager at the CAF American Donor Fund, explains the latest trends in Transatlantic giving and how to plan for charitable donations during the Holiday season

Published on November 25, 2020

Heart Sunset

As we approach the end of this strangest of years and grapple with coming to terms with what has happened, and attempt to envision what the holidays might look like with requisite social distancing, I also pause to consider how this traditional season of giving and sharing might have changed.

At the Charities Aid Foundation (CAF), we work to help with and encourage charitable giving in all its forms. It is a mission that feels more relevant than ever as 2020 draws to a close. We’re a charity and a champion for better giving, and for over 90 years we’ve been helping donors, companies and charities make a greater impact. We help generous donors get much-needed funds to charities working across countless areas, we assist companies that want to give back to the communities that support them, and we help charities manage their finances and offer tools to put them in the best possible position to fulfil their mission. Despite the challenges of the last year, and thanks to the generosity of so many, CAF sent a record £702 million to charitable organisations in the UK and around the world, an increase of £56 million over the previous year.

As the pioneer of philanthropic giving for dual US/UK taxpayers, we are honoured that for 20 years through our CAF American Donor Fund we’ve enhanced charitable giving in the UK, the US and around the world. The CAF American Donor Fund offers expert support, flexible solutions and the ability to claim eligible UK and US tax relief on all charitable giving worldwide. And what a difference it can make – people giving to charity through the CAF American Donor Fund resulted in 1,376 grants to charities last year that added up to £82.7 million.

Since joining the CAF American Donor Fund team earlier this year, I have had a front row seat to witness extraordinary levels of giving and we have been busier than ever working alongside our dual UK and US taxpayer clients to ensure their donations reach charitable organisations of all types. Those funds are making a vital difference around the world during the coronavirus pandemic at a time when so many charities are struggling to survive during this uncertain period. Indeed, it has been so gratifying to work with people who have been calling us seeking advice on how best to help, if they should act now or await a rebuilding phase or if they should move forward longer term giving plans to send desperately needed funds today.

CAF’s unique research into charitable giving has also tracked the responses of charities at such a perilous time. With traditional fundraising events – all those raffles for the local hospice or church, village fetes and fun runs – cancelled, charity shops closed, museum gift shops shuttered and box offices dark, so many sources of regular funding have been shut off. A survey of charities around the world conducted by CAF America found that 1 in 4 feared they would not survive for a year without significant additional support. Here in the UK, CAF’s survey of charities revealed that similar numbers of domestic charities feared they would have to close their doors within a year without added help.

The global crisis has presented an entirely new scale of challenges for charities which are struggling to deliver much needed support to our communities at a time when many had to move their services online, or when older volunteers were forced to isolate to stay safe just as demand continued to climb.

Coronavirus Emergency & Resilience Funds

The CAF Coronavirus Emergency Fund, launched back in March to provide grants to help small charitable organisations that have been directly impacted by the crisis, paid grants to over 1,250 charitable organisations across the UK, totalling more than £6.4 million. In addition to an initial £5 million made available by CAF, contributions from generous private individuals, trusts and businesses added more than £1.5 million to the fund.

More recently, CAF launched a new £20 million fund in October to help charitable organisations in England that support those hardest hit by Covid-19. The CAF Resilience Fund will distribute grants ranging from £10k to £100k to deliver rapid relief from the impact of the coronavirus pandemic. Both registered and unregistered small and mid-sized charitable organisations, including community interest companies and social enterprises, were eligible and the funding, when it flows early next year, will be flexible, which means that charities can use that money to pay their bills, be they electricity, rent or the costs of keeping staff on the job, playing their vital role.

The funding comes from the Department for Digital, Culture, Media and Sport (DCMS) Community Match Challenge funding scheme, part of the Government’s £750m coronavirus support package for charities. The Community Match Challenge matched funding – a further £20 million – is from the Covid-19 Support Fund created by the UK’s insurance and long-term savings industry.

CAF’s research division continues to closely monitor the impact of the pandemic on the charity sector and we have seen extraordinary levels of charitable giving. Our recent CAF UK Giving Covid-19 Special Report into UK household giving found that giving during the first months of lockdown was at levels normally seen during the peak seasonal fundraising months of November and December when the Poppy Appeal, Children in Need and major Christmas appeals are held. Between January and June 2020, the public donated a total of £5.4 billion to charity - £800 million more than for the same period in 2019. However, the report has also found that some vital charities suffered unprecedented losses as donors shifted their donations to charities supporting the NHS and opportunities for fundraising were curtailed. Most notable among them are medical research charities. In just the first six months of 2020, it is estimated that they faced a £174 million funding shortfall.

As we approach the end of the US tax year, we understand that, as an American abroad, there are various important considerations when planning your charitable giving. If you are planning to support your chosen charities while also making the most of the charitable deductions available to you, or would like more information on this, our team can help. At CAF, we are here to help make the process easy, safe and convenient for you. Whether you wish to donate to urgent crisis relief, arts organisations or other charitable causes, whether in the US, UK or beyond, we can facilitate and support your tax-effective giving.

If you pay tax in the UK and US, giving through our dual-qualified CAF American Donor Fund enables you to claim dual UK and US tax relief on all your giving worldwide, including adding 25% through UK Gift Aid where applicable. We can help you create a Donor Advised Fund for either one-off or long-term charitable giving, and as soon as you donate into your fund you will be issued with the appropriate tax receipts for both your UK and US donation, allowing you to suggest your chosen charities to support or alternatively letting the fund build up for future donations.

We are here to help with your charitable giving and look forward to speaking with you.

Joe Crome is Senior Manager, CAF American Donor Fund, at the Charities Aid Foundation. For more information please visit: www.cafonline.org/cadf or email: cadf@cafonline.org.

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