Good money going begging

Andrew Papworth asks when is the sector going to do something about payroll giving?

Written by
Andrew Papworth
Added
May 15, 2013

The latest data from HMRC show a small increase in the number of donors making use of payroll giving in the tax year 2011-12 (red line in the chart below). This is good news as far as it goes but – as the graph shows – use of the scheme has not yet recovered to the level of 2008-09 (ignore the previous peak around the start of this millennium, which was due to a short-term scheme calledChildren’s Promise).

On the face of it the solid blue line shows annual gross donations looking more promising; sure there was a dip, but growth looks healthy since 2008. However, if you look at the dotted blue line, which takes account of the changes in RPI (the retail price index) since 1991, you’ll see that this is misleading. In real terms there has been hardly any growth for a decade.

In real terms there has been hardly any growth for a decade.

It’s not hard to see why; the red line on the graph below shows that since about 2002 the average net amount given per earner has wavered between about £100 and £120 per year (just £8 to £10 per month). So, donors had certainly not been keeping up with inflation – even before the recession struck.

This performance must be regarded as a collective failure by the sector. There was a lot of bleating about the budget changes to various tax reliefs but here is a potential source for regular money staring the sector in the face and little is done about it.

The concept of give as you earn ought to be quite attractive to anyone on PAYE, particularly for higher rate taxpayers – and especially if employers can be persuaded to match or top-up donations as part of the corporate social responsibility programmes. So, why is the uptake so poor? Do people not know about it? Are companies reluctant to get involved? Are people embarrassed to sign up for smaller amounts – say, £5 per month? Are the specialist agencies falling down on the job?

Fundraisers are looking at a potential source of regular money and doing little about it.
When a donor signs up to payroll giving she isn’t less likely to give to other appeals – when asked properly.

Sure, admin costs could be a problem for some charities, as well as building a relationship with give-as-you-earn donors. But the thing is: payroll giving is likely to be an addition rather than a substitute for other forms of giving. Once donors have signed up, they are quite likely to forget and be just as open to other appeals as anyone else. If payroll giving became the norm for all companies and all employees vast sums would be raised and the perceived problems would shrivel into insignificance.

Should we be promoting payroll giving more frequently than every 10 years?

Major charities need to get together to raise the profile of the scheme. Maybe there needs to be an annual ‘payroll giving month’ during which there is a concerted public relations effort to bring together employers, employees, government and charities in a regular push to bring the attractions of the scheme to higher attention.

About the author: Andrew Papworth

Andrew Papworth

After a long career in advertising agencies, Andrew Papworth has been freelancing as an advertising and communications planner for about two decades.

Recent Articles

SOFII’s advent calendar 2017

The SOFII advent calendar returns in 2017. As we’re already into December, this first edition is a bumper one, with twelve great treasures from the SOFII archive for you to discover.

Read more

NSPCC’s Full Stop campaign - a fundraising triumph. Part two: the launch and beyond

In part two of our retrospective of the NSPCC's ground-breaking Full Stop campaign, Giles Pegram CBE takes us through the details of the appeal, covering extraordinary events, celebrity supporters and bold initiatives which all contributed to the amazing impact the campaign had on the British public.

Read more

How to get from Good Intentions to a Great Supporter experience – and retention

In his second of two articles on how charities operate, Charlie Hulme looks at supporter journeys. All charities like to use the right words like ‘commitment’, but are they actually delivering results? When they do things right, the results can be outstanding, as Charlie demonstrates.

Read more

NSPCC’s Full Stop campaign - a fundraising triumph. Part one: building the foundations

The NSPCC Full Stop appeal was the most successful charity fundraising campaign in British history. We bring you the inside story as told by a man at the heart of it.

Read more

What Donors Want - perhaps the most crucial podcast you'll hear this year. Episode two.

What Donors Want episode two features a dynamic philanthropic couple, Lynne and Peter Smitham who co-founded the Kiawah Trust in 2004. Their experiences have been varied and fascinating as they look to have the best impact with their money.

Read more

Also in Categories