Many people turn their thoughts to charity in the run-up to Christmas, but making generous donations can be difficult at a time when budgets are already stretched. For cash-strapped charitable types, we suggest ten ways to be good without damaging your festive finances.

1 Maximise what you already give

Charities are estimated to be losing up to £700 million a year in unclaimed Gift Aid, says the Charities Aid Foundation. Gift Aid allows charities to reclaim the tax you have already paid on money you donate and can increase the value of your gift by up to 28p on every pound.

All basic-rate taxpayers have to do is complete a declaration saying that they pay enough tax to cover what the charity will reclaim from Revenue & Customs. Higher-rate taxpayers can also claim back the difference between basic and higher-rate tax on their self-assessment tax returns.

2 Donate penny shares

Donating nuisance small holdings is an excellent way to tidy your portfolio and help charities without incurring any dealing costs. ShareGift (www.sharegift.org) collects shares, reregisters them in its name and pools together the shares until there are enough to sell through a commission-free arrangement with Killik & Co, the stockbroker. ShareGift then uses the sale proceeds to make donations to a range of UK charities. All shareholders need to do is send in their share certificates and sign a transfer form.

3 Remember a charity in your will

By including a donation to a charity in your will, others will benefit and the amount that you donate will be deducted from your estate for inheritance tax purposes. The campaign website www.rememberacharity.org.uk is full of useful advice, as is the Charities Aid Foundation, at www.caf.org.uk.

4 Give as you earn

Regular and predictable giving is the holy grail for charities, so check whether your employer offers a payroll giving scheme, such as Give as You Earn. Donations made through these schemes are taken from your salary at source, before it is taxed. This means that a donation of £10 a month effectively costs a lower-rate taxpayer £7.80. For higher-rate taxpayers that same £10 donation would cost only £6.

5 Run a mile

Many charities rely on large fundraising events, such as the Flora London Marathon and the BUPA Great North Run to keep them going. By signing up to run for charity, you can help a good cause for nothing and save yourself the trouble of renewing that underused and expensive gym membership. As a fundraiser you will be expected to pull in a minimum amount to earn your place, but charities offer plenty of support and advice to help you to reach your target.

6 Phone it in

Recycle your old mobile phone for charity. Fonebak, the recycling company, will donate £5 to the housing and homelessness charity Shelter for each handset it receives. Call Shelter’s supporter helpdesk on 0845 4584590 or e-mail info@shelter.org. uk to ask for a specially designed free-post envelope for your old handset.

For those thinking of switching networks or upgrading their phone, Shelter has an arrangement with Connect 4 Charity to offer some of the latest phones from Samsung, Nokia and LG and accompanying tariffs. When you sign up, the charity receives a donation that could be worth more than £200. Go to www.shelter.org.uk to find out more.

7 Charity gifts

One way to spend no more than you would normally and still feel better about yourself is by making charity gifts. The Save the Children Wishlist (www.savethechildren.org.uk) allows you to buy gifts such as a fun trip for a disadvantaged child in the UK for £15, or enough Plumpy’nut, a high-protein, high-energy peanut butter, to feed a severely malnourished child for a month for £26.

Another possibility is Oxfam Unwrapped (www.oxfam.org.uk). Among other things, you can help local communities in Tanzania or India by buying a goat for £25 or fishing nets for £20.

8 Give blood

Historically, blood supplies dip over the festive period. “Either people are busy with friends and family or waylaid by seasonal colds,” says Ruth Greenaway, of the National Blood Service. Giving blood is straightforward and one donation from you could save someone’s life this Christmas. Go to www.giveblood.org.uk or call 0845 7711711 to book an appointment.

9 Spring clean early

Charity shops are crying out not just for clothes, but also books, kitchenware, glassware, crockery, ornaments, DVDs, CDs, toys and electrical goods. By clearing out all your unloved knickknacks and impulse purchases you can boost a valuable source of income for charities. Cancer Research UK has more than 600 shops across the UK. Visit your local stores to hand over your unwanted items or ask if it is able to make a collection.

10 Time is money

One of the most valuable cash-free ways to give to charity is by donating your time. At www.do-it.org.uk you can search for volunteering opportunities by category or postcode.

CASE STUDY: Where there's a will...

Ashley Davies became involved with the Rainbow Trust through his design and construction company, Modus, when the charity was chosen as the company’s preferred good cause. But for years Mr Davies, left, has gone farther by chairing the annual fundraising ball committee, as well as changing his will to leave the charity a legacy.

The Rainbow Trust (www.rainbowtrust.co.uk) provides practical and emotional support, including respite accommodation, to families that have a child with a life-threatening or terminal illness. Mr Davies says: “I think when a child goes through a life-threatening illness the family can fall apart. The services that the trust provides can give these families strength and there is a great sense of relief when they receive the support.”

Mr Davies says that he would have left the charity a gift in his will even if it did not reduce his estate for inheritance tax purposes. However, he is “doubly pleased” that the gift will lessen the amount that he will bequeath the taxman.