Choosing the best way to donate to charity

Next Friday sees the return of Children in Need, prompting the nation to think about how it can help others. Although over half of all UK adults are donating to charitable causes, the recession has affected charity giving in the UK, with adults raising an estimated £9.9 billion for charity in 2008/2009; £1.3 billion down on 2007/2008 figures.

moneysupermarket.com advises charity givers to choose the best way of making their money work hard when donating to their chosen charitable organisation.

There are a number of options available to those wishing to donate and whether its direct debit, paying in cash, buying goods or event sponsorship, there is always a convenient way to give generously.

One increasingly popular route is through charity credit cards or savings accounts. These are available from many providers in conjunction with a range of charities and aim to have the same features of traditional products, while also providing benefits to a charity, such as a donation being made upon each purchase.

When taking out a charity card, the charity automatically receives a one off payment, after that most providers donate a percentage of everything you spend direct to the charity. For example, the market leading credit card from the British Heart Foundation offers a £50 donation when the card is used for the first time and 35p per £100 spent thereafter. Someone spending £150 per month on their card would net the charity £56.30 over the course of a year.

Using a Cashback credit card is another way of gaining extra cash to donate to a charity of your choice. By using American Express Platinum Cashback credit card, for every pound spent consumers can gain an extra five per cent cashback which pound for pound on spending generates a better return than credit cards. However when comparing Cashback cards to charity credit cards it's worth taking into account the initial donations, as sometimes these will mean the credit card gives a better return. Spending £150 per month on this card would earn £29.25 which can be donated to a charity of your choice.

Peter Harrison, credit card expert at moneysupermarket.com, said: "We have seen from our own poll that over 50 per cent of people are still giving to charity regularly despite the recession, but for everyone else that wants to donate, there are certain financial products that can make this easier. Charitable credit cards are an easy way of supporting a worthy cause, as all you have to do is use your card in the normal way. Although rates are competitive, the return to charities can be much smaller than alternative methods of raising funds."

Another way to give is through charity-linked savings accounts, which offer a percentage of the interest to a particular charity, allowing customers to donate as they save. For example, the Poppy Bond from Coventry BS offers savers a competitive rate of 4.3 per cent as well as contributing 0.20 per cent of the balances invested into the bond to the Royal British Legion Poppy Appeal.

Peter Harrison, credit card expert at moneysupermarket.com, said: "Rather like charity credit cards, these linked savings accounts are encouraging consumers to connect with worthy causes.  However, whilst you can't argue with the sentiment of donating as you save, consumers should pick their product carefully as not all accounts offer equally competitive rates."