It is incredible just how much charities in the UK rely on donations from generous individuals.
According to the 2025 UK Giving Report from the Charities Aid Foundation, the UK public donated a staggering £15.4 billion over the course of the year.
It’s admirable that you may wish to donate to a larger charity, especially if they’ve worked with your local community or supported a cause close to your heart.
Yet, Small Charity Week – which takes place between 23 and 28 June – could be the ideal time to examine the role that smaller organisations play across the UK, and how your support could have a more direct effect.
At Barwells Wealth, we’ve seen this first-hand. We’re proud to assist Holding Space, a charity that supports young people across East Sussex with their mental health, emotional issues, and school struggles.
Of course, donating to any charity is commendable. Still, if you’re thinking about how to give back, supporting a local good cause could benefit both your own wellbeing and theirs – continue reading to find out how.
1. You could directly benefit your local community
A key benefit of supporting a smaller local charity is the direct effects your gift could have on your community.
Larger charities might operate nationally, or even globally. While they undoubtedly do vital work, smaller charities often allocate a larger proportion of donations directly to services and support near you.
This means that your contribution could go directly to families you know, or local initiatives you care about.
For instance, it could help to fund a support group at a local school, provide counselling services to young people, or even contribute to a mental health project, such as the amazing work done by Holding Space.
Your donation could even have a visible impact, such as restoring a local building or creating a new green space.
Knowing you had a hand in making these changes possible can be very rewarding.
2. Gift Aid makes your donations go further and can reduce your tax bill
When you donate to a registered UK charity, Gift Aid can significantly increase the value of your contribution at no extra cost.
If you’re a UK taxpayer, the charity can claim an extra 25p for every £1 you donate. This means that a £100 donation would effectively become £125.
To enable this, you will need to complete a form for the charity to claim Gift Aid on your behalf.
If you pay higher- or additional-rate tax, you can claim back the difference between the basic rate of 20% and your highest rate of tax on the donation through your self-assessment tax return.
This means that, if you’re a higher-rate taxpayer, you could claim an additional 20%, or 25% if you pay the additional rate.
3. Giving to charity through your will could reduce a potential Inheritance Tax bill
Giving to charity could also potentially reduce your Inheritance Tax (IHT) bill for your next of kin.
Any wealth above your nil-rate band could face a 40% IHT charge after you pass away. However, leaving wealth to charity could reduce the overall value of your estate and potentially bring more of it within the tax-free thresholds.
Moreover, if you leave at least 10% of your estate to a qualifying charity, the rate of IHT your loved ones pay could fall from 40% to 36%.
This could significantly increase the amount your beneficiaries receive, while still making a substantial donation to a cause you care about.
4. Supporting a charity can improve your mental and physical health
Aside from some of the more apparent benefits, you may be surprised to learn that giving back to charity can do wonders for your physical and mental health.
The University of Alabama at Birmingham reports that acts of generosity and volunteering can:
- Boost happiness
- Reduce stress
- Help you feel more socially connected.
This is because such acts activate the brain’s reward system, fostering positive emotions and a sense of purpose.
These feelings can also have a knock-on effect on your physical health. Studies have linked charitable giving to lower blood pressure and an improved immune system, two measures that support overall health and may even lengthen life.
Get in touch
Our team of independent financial advisers in Lewes is here to support you in planning your estate around charitable donations.
To find out more, please get in touch by emailing us at financial@barwells-wealth.co.uk or by phone on 01273 086 311.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
The Financial Conduct Authority does not regulate estate planning, tax planning, or will writing.
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