How to maximise your corporate giving budget at financial year-end

Why allocate your company's giving budget at year-end

Supporting impactful charitable giving programmes can help your business meet its corporate responsibility goals, enhance the loyalty of both your employees and customers, and improve your relationships with the communities you serve. 

Whatever causes matter to your people and business – environmental issues, health or education, local charities or global charitable initiatives – you can use the year-end to review if you have met your publicly declared charitable giving commitments, as well as identify and protect your existing unspent funds for future giving, all in one place.

Furthermore, taking this more strategic approach enables you to maximise the impact of your giving and reduce your taxable profit. In the UK, companies are allowed to deduct charitable contributions from their taxable income. Donating at the end of the financial year means companies can benefit from those tax deductions in the current year, offering more immediate financial relief. It also ensures your funds are used as purposefully as possible. 

Case studies: Purposeful corporate giving

Recently, CAF supported a financial services company’s Social Impact team to assist the finance team in moving their corporate giving budget off the balance sheet ahead of the year-end deadline. At the same time, we helped strengthen the governance around their organisation’s giving. 

Using our Company Account, the team protected their budget. Alongside this, our Impact Accelerator experts supported them to select long-term strategic charity partners, who aligned with the company’s giving ambitions, and design and implement an impact framework for their programme. 

Similarly, we helped a real-estate company who had ambitious plans to build a rehabilitation centre and were in the process of setting up a registered charity. However, at the same time, they needed to move a significant sum of end-of-year charitable funds off their balance sheet by the end of their financial year. 

As we worked with the company’s legal team, it became clear that they needed more time to establish their charity. So, we provided an interim solution, assisting them to set up an account where they could hold the funds, and offered insight and guidance to shape how they could distribute the funds when the charity was set up.

Manage your corporate giving effectively

At CAF, we have proven expertise in helping companies to achieve their giving goals, whether they are just starting to develop their giving programmes, reevaluating their aims, or looking to scale an existing programme. 

We also understand social purpose organisations, helping them – through our wider sector knowledge and experience – to do more of their life-changing work.

What is the Company Account?

The Company Account is a Donor Advised Fund (DAF) for corporate giving, which enables companies to manage their corporate giving online in one place. CAF deals with the administration, alongside any of the risks and/or reputation exposure involved in making sure you give safely and securely. In addition, the funds in your Company Account can be rolled over into the next accounting period, enabling you to manage your corporate giving with greater flexibility.

As CAF is a charity, your contributions are considered a charitable donation at the point you transfer them to us. This means you only need to record one donation to claim tax relief on all your giving. With a Company Account, you also have time to design your programme, engage stakeholders and build the partnerships you need to achieve impact. We will hold the funds for you until you are ready.

This includes making charitable donations to social purpose organisations tax-effectively across the world. Our verification experts will work with you, to make sure that your donations are delivered safely and securely to your chosen charities.

Case study: Secure international giving

For example, we recently assisted a UK-based FMCG company that wanted to gift funds to a US 501(c)(3) tax-effectively. As a B Corp organisation, the business gives 20% of their pre-tax profits annually. 

After developing a new long-term strategic partnership with a US-based charity, they needed to find a way to make an overseas donation tax effectively before their financial year ended. The company opened a US$ Company Account, contributing the necessary funds and using our verification service to verify the charity and handle the donation on their behalf in line with the necessary legal and regulatory requirements. 

At CAF, we are also supporting an increasing number of companies to play a crucial role in disaster response, targeting their corporate giving resources to provide immediate relief as well as assist communities’ long-term recovery efforts in the wake of such events.

Planning ahead

Protecting funds for corporate giving at the end of the year is a powerful way for companies to make a positive impact in the future. 

With multiple stakeholders involved – from your corporate responsibility and social impact teams to finance and legal – it is essential that you are able to proactively manage your budgets, using corporate giving structures that support you to meet your deadlines, and boost your organisation’s impact.  

By planning ahead, you can ensure your programmes are purposeful, sustainable, and aligned with your company’s goals.