Are you looking for a way to foster generosity in your organisation? Do you want to lead the way as the Directors of the company?
It may be that the values of your company would be well served by being generous outside of your organisation, or that as Directors of the company you want to introduce a charitable vision for your company from the centre. A tangible way to do this could be to make charitable gifts from your company’s income.
Can a company give to charity?
So, it isn’t just individuals who can make charitable gifts, companies can too. Directors of UK private and public limited companies may consider giving to charity from the company’s income in the company’s name.
If you are a sole trader or in a partnership your charitable giving will be done as individuals, as your business does not have its own corporate legal identity.
The benefits of charitable gifts
Where a company gives to charity, it can reduce its taxable profits by the amount of the gift and therefore Corporation Tax is reduced in proportion to the gift. For example:
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Generous Company Ltd has profits of £500,000 and gifts £10,000 to Grateful Charity to pay for new furniture and pool tables at the local youth centre. Generous Company Ltd’s taxable profits will be reduced to £490,000, thereby reducing its Corporation Tax from £125,000 to £122,500; a reduction of £2,500. In practice, therefore, Grateful Charity will receive a gift of £10,000, but the cost of the gift to Generous Company Ltd will be £7,500 (£10,000 - £2,500 Corporation Tax relief). This might enable to company to be even more generous to the charitable causes it supports. |
A Corporate Donor Advised Fund account
A really effective way of managing all your company’s giving in one place is to set up a Donor Advised Fund account. The benefits of giving to a Donor Advised Fund (DAF) include:
- simplifying the process of giving different assets of the company (see below)
- enabling your company’s giving to be anonymous where there are sensitive causes or reputational risks involved
- making the gift at a time that suits the company’s cashflow but being able to make decisions about distribution at a later date.
In addition, at Stewardship we offer investment options within the Corporate DAF account to enable capital growth of the charitable funds over the long term.
When a company wishes to give to Stewardship, we will ask the Board of Directors to pass a resolution whereby they decide to make the gift, confirm the gift is a charitable donation for Corporation Tax purposes and confirm that the company is solvent. The shareholders will also need to agree to the gift.
An efficient and effective way to make ongoing giving decisions may be to set up a specific Nominations Committee of the Board that is tasked with deciding on and requesting grants from the Corporate DAF. This Committee could also be used as a way to involve employees.
Non-cash Giving
It isn’t just cash that companies can gift. Companies can gift shares and property that they own to charity (this does not include shares in the donor company itself).
Stewardship is able to accept gifts of shares listed on any of the major global stock exchanges. Your company can make its gift of shares by a simple exchange of letters, in which the Board informs us of the gift, and we ask it to arrange sale of the shares on our behalf. The cash proceeds will then be credited to your company’s Corporate DAF.
Stewardship can accept a gift of UK land or buildings. We ask the company to make a declaration of trust, then sell the property on our behalf. The proceeds of sale, net of conveyancing expenses and estate agent fees, will be credited to the Corporate DAF.
You can give with Stewardship
At Stewardship we love to open corporate accounts to enable companies to be generous with their income. Companies can choose to benefit many different churches, charities and individual partners by gifting to their Stewardship account.
If you would like to learn more about our Donor Advised Fund for companies and would like to talk to us about opening an account please contact Philanthropy Services.
Impact
Quarterly email for philanthropists. News, inspiration and guidance to support you on your giving journey.
Susie Child
Susie is a solicitor who has experience of advising charities and joined Stewardship’s Legal Team in 2024. She has loved being very involved in the establishment and growth of a plant church in East London, where her husband is the pastor.
Susie is passionate about seeing people grow in their love of Jesus and seeing the local church grow in loving, bold and impactful community both within the family of the Church and through reaching out to its local community.
