Whilst I know there are certain charities that seem to have a plug hole for money, there are THOUSANDS that would SERIOUSLY benefit from £1,000,000...
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I would take the 10,000 and set up my own charity. I've actually kinda wanted to do that for a while now but I'm not too sure what cause I'd even do it for sigh.
I'd do the 2nd option and donate. I'd rather help out to those who need it, than just help myself out, and most likely change because of money. Lol.