Update: 3 November 2016: A new version of this blog is now available here: What happened to the £10m (now £20m) I promised to donate to charity?
In June 2012 I pledged, as part of the announcement that MSE was joining the MSM group, that charities would receive £10 million. So for transparency’s sake I want to knock out an updated quick blog explaining what’s happened and what will happen with this donation.
How much will go to charity?
At the time of the announcement I said I wanted charities to get £10 million (a mix of cash and shares from the deal proceeds). My plan was for them to get £4.5 million in cash and £5.5 million in MoneySupermarket shares (which, as they were worth £1.16 at signing, meant giving away 4.75 million shares).
By the time the deal completed in September and I received the proceeds, the MoneySupermarket share price had increased, but I felt it right not to reduce the number of shares – so effectively the total donation was around £11.1 million (£4.5 million cash and £6.6 million in shares).
Since then the share price has increased rapidly and in total the donation is now worth more than £17 million. The shares can’t be sold until October 2015 at the earliest, so there is always the risk the price could move the other way, yet all dividends that have been paid out meanwhile also go to charity.
Donations so far
On the day of announcement, I pledged £1 million direct to the Citizens Advice Bureau (CAB). I did this as I wanted the donation to have an immediate impact – and the CAB is an outstanding organisation that I’ve long supported and believe in – so there was no place better. Plus I wanted to use the opportunity while I had the media focus to say:
1. It’s a disgrace that this brilliant organisation has had its debt counselling funding cut by the Government at such a crucial time. It should not be for private individuals to make up this gap – and it’s a tragedy as it’s needed.
2. Few people realise the CAB is a charity, even those who avail of its services. So many who’ve been helped don’t consider giving back when things are better. This needs to change as the organisation is really struggling.
That money was donated in 2012 as follows:
- England and Wales CAB: £615,000 cash and 215,703 shares (value at today’s opening share price of more than £570,000) – total: over £1.19 million. Find out what this was used for in my What the CAB spent the money on blog.
- Scotland CAB: £85,000 cash.
- Northern Ireland CAB: £50,000 cash.
As shares need managing, it made sense to keep these in one tranche.
Since then I have also made a number of other donations, the main ones being:
- 2 x £100,000 to PFEG, the personal finance education group, for the financial education project.
- £100,000 to Mind for mental health work.
- £100,000 to the Trussell Trust to provide financial triage in food banks.
- £10,000 to Winston’s Wish to help children and young people who’ve lost their parents as I did.
What about the rest of the cash?
That of course, leaves a very large amount. I am naturally cautious to get this right and don’t want to make a knee jerk decision – I want to ensure these funds have real impact.
Therefore in 2012 I donated the money into a Charities Aid Foundation (CAF) account. For those unfamiliar with the CAF, while a charity itself, it is effectively a charity bank account as once donated, the money is no longer mine – I can never personally get it back – though I retain the ability to direct its use towards any registered charitable organisations.
If you give to charity regularly, with £100 initially or £10/month, you can open a CAF account. The donation is made with Gift Aid and you then get a cheque book you can use for any charity. See the Charity Giving guide for more.
All the donations above have come from this fund. Yet even after that there is still currently £4,030,000 cash and 4.53 million shares (so a total value at today’s share opening share price of £2.64 of more than £12 million). So even though I have made donations, at nearly £16 million the amount is far more than I put in – the cash total includes the interest and dividends earnt meanwhile.
I should note before anyone says it, for this volume of cash it may have been a tiny bit cheaper to set up my own charitable trust. I didn’t do that, as I support the CAF and therefore wanted to put my money with it for a time and help the work it does.
What’s the rest of the donation to be used on?
This money is a legacy from the success of MoneySavingExpert.com so it seems right to me that a good chunk of the proceeds are to be used for consumer and financial empowerment and education.
As such, my aim with a good chunk of the rest of the resources was to help with financial education (which, thankfully we’ve now succeeded in getting on to the curriculum) and to try and provide solutions to the marriage made in hell that is mental health and debt problems (see the Mental Health & Debt Guide).
Yet with such a sizeable fund, I’d like the money to work on bespoke projects (done with charities), rather than just donate cash to go into a charity’s pot.
This is a long-term aim – not something I want to rush. I’ve always said that this will be one of my focuses after my contract with MoneySavingExpert is up, which is in September this year (don’t read that as meaning I’m leaving though, I don’t intend to and the site is very important to me – just that after then I intend to gradually move away from being full-time to free up some time for other interests, including these charities).
I am still working on and coming up with ideas on how to do this over the next few years, especially as I want the money to actually have a hardcore impact, not just to cover admin costs.
As a side note, unsurprisingly, I’ve had many charities approach me since the donation was announced, a few rather aggressively. I would continue to ask for some patience and to allow me to work through the priorities.
There will be some, still substantial, money available from within the CAF funds to be donated to specific charity projects outside of the two areas above, but ensuring much of the money makes an impact and ‘does good’ rather than go into a generalised charity pot, is important to me.