Bond is a gift for you and charities

THE UK boasts 200,000 individual charities, around 90 per cent of which have no employees and rely solely on voluntary workers. These focus most of their efforts on raising money. Administering that cash is a burden that many feel ill-equipped to bear.

The Charities Aid Foundation (CAF) helps charities with costeffective banking and advice. The foundation also works with thousands of philanthropists and companies to maximise the amount that they give, investing donors’ money, making sure tax benefits are used to best effect and ensuring charities are bona fide.

Tracing its roots back to the 1920s, CAF works with companies across the FTSE 100 index and the American 500, handling corporate giving and donations from employees, as well as from some of the biggest philanthropists on both sides of the Atlantic.

In March 2016, CAF raised £20million through a ten-year charity bond issue, paying 5 per cent annual interest. Midas recommended the securities, which have since become the best-performing charity bonds on the stock market, rising from an issue price of £1 to £1.13 today.

Now, CAF is back in the market, seeking to raise up to £50million through another ten-year bond priced at £1 but paying 3.25 per cent this time.

The rate may be lower than five years ago, but it is still considerably higher than most savings rates and CAF’s bonds can be bought and sold freely on the stock market.

CAF intends to use some of the money to repay the 2016 bond, offering investors £113.50 for every £100 worth of bonds they own. The rest of the cash will be used to help CAF improve systems and technology so it can become even more efficient than it is today.