We live in an inter-connected world with traditional and online media alerting us to events within seconds of them happening. The 24-hour news cycle can sometimes feel negative, but it can also mobilise donors around the globe to respond quickly with financial help in response to an emergency. If you are interested in supporting causes outside the UK, there are some cyber fraud points you should be aware of, as well as new UK tax rules to consider, that will help you to decide how to donate abroad safely.
In the aftermath of the Turkey-Syria earthquake in 2023, the BBC highlighted a range of online scams linked to unsafe fundraising options. This included misleading video content and links to cryptocurrency donation options. AI-generated images were also found to be in use. Take particular care if you are responding to an online donation request from an informal source.
If you are looking to verify that a charity is genuine, the Charity Commission in England and Wales, and the Scottish Charity Regulator, maintain online registers which can be accessed quickly and for free.
The Disasters Emergency Committee (DEC) is a UK coalition of fifteen leading aid charities which co-ordinates quick fundraising and response activity at times of crisis. It was formed in 1963 and includes many household name organisations. Over the last sixty years, £2.4 billion has been raised in seventy seven appeals launched for major overseas disasters and it is often named in media appeals to help highlight safe fundraising routes.
If you donate to the DEC, you are usually making a geographic decision linked to a particular disaster response appeal you wish to support. With time of the essence in an emergency, it is understandably left to the discretion of the DEC as to how best to deploy your donation for disaster relief in the particular country concerned.
If what you have in mind is not connected to specific disaster response, however, then a further option is a donor advised gift (DAG). This is similar to the example mentioned above, in that it is a two-stage process involving a donation to a UK body, which is then transferred onwards to be used abroad. The difference here is around how specific you can be about the end recipient. You might have a particular organisation in mind which you’d like to support, and this is where the DAG can provide additional support. DAGs are offered by a number of philanthropy management bodies, which are themselves charities. A DAG involves you making a gift to one of these UK charities, which then conducts due diligence on the end recipient you have proposed, in order to verify various aspects about its finances and governance arrangements. This can help provide reassurance about the non-UK organisation you are keen to support, its legal status and details about how it is governed. This route may be of particular interest where someone is seeking to support an organisation which is outside the DEC coalition. As you would expect, given the level of bespoke research which is involved, using a DAG will incur a fee.
Finally, many overseas organisations also have a ‘British Friends of’ branch, which helps to co-ordinate local fundraising, communications and events with supporters in the UK.
Supporting overseas charities via a UK charity is not just a sensible step from a fraud and cyber security perspective. It also means that an inheritance tax exemption and other tax reliefs might be available on your donation. From March 2023, the tax treatment of direct gifts to charities outside the UK has changed. The Spring 2023 Budget announced that direct donations to non-UK charities in the European Union and European Economic Area would no longer attract the same tax reliefs which apply to gifts to UK charities. This means that a UK donor who makes a large donation directly to a European charity might now face an immediate inheritance tax charge. The same applies where a UK individual leaves a legacy in their Will to a European charity - such a legacy is no longer exempt from inheritance tax. As a consequence, UK charities now play an even more important role in giving confidence to UK donors that their donations for use overseas will have the effect they intend.
This article is not tax or legal advice. Your individual circumstances will affect your tax position and not all charitable donations qualify for Gift Aid. Please take professional advice.
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