Lindsay Boswell sees Payroll Giving as offering a potentially rich new seam of income for arts organisations.
It is a well-known fact in the fundraising sector that, when it comes to acquiring Lottery grants, appealing to major donors and corporate fundraisers, and running successful friends schemes, arts charities are the experts. But an area that remains largely untapped in arts fundraising is Payroll Giving.
Payroll Giving is a scheme that enables employees to give money to any UK charity straight from their gross salary (before tax is deducted), and to receive immediate tax relief of up to £4 for every £10 donated. This means that if you receive a £15 payroll donation each month, it costs the donor less than £12 if they are a standard rate taxpayers, or just £9 for higher rate taxpayers. It is therefore a very attractive way for employees to support your organisation.
The major advantage of Payroll Giving is that it provides a regular, reliable and sustainable source of income. Once a donor has signed up, it is likely that he or she will continue to support your organisation for several years to come. What is more, the Payroll Giving Grants programme means that employers with less than 500 staff will be rewarded with a grant of up to £500 just for setting up Payroll Giving before December 2006, and the first £10 of their employees gifts will be matched during the first six months of their donations. This means that a £15 donation from a payroll giver could be worth as much as £25 to your charity.
The Grants programme provides you with a prime opportunity to approach new businesses, as well as those that may have supported you in the past, and to develop long-term, committed corporate relationships. From an employers perspective, there is barely any cost or administrative resource incurred in setting up Payroll Giving. All they need to do is sign a contract with a Payroll Giving Agency who will transmit the donations on their behalf. Professional fundraising organisations are available to help them promote the scheme to employees.
Payroll Giving is also easy for employees all they need to do is ask their payroll department to deduct regular charitable donations from their salary by filling out an application form, outlining how much they would like to give and to which charities. The donations are taken out of their gross salary (giving immediate tax relief) and will appear on their payslip.
To put Payroll Giving into practice, the first step is to make contact with employers and set up a meeting. Organisations where you already have a relationship make the easiest entry point, such as your major sponsors, or your suppliers. When you meet, explain why Payroll Giving donations are particularly beneficial, what a regular, reliable income stream would enable you to do and how a little can go a long way. Link donations to charitable objectives so that you can identify a mutually agreed target to aim for with the Payroll Giving promotion. You may also consider starting a Payroll Giving scheme within your own organisation. This is the perfect opportunity for your fundraising team to practise its approach with its own employees before reaching out to new ones, and depending on the size of your organisation, you may be entitled to a grant of up to £500 as well.
When making your approaches, remember that Payroll Giving benefits everyone. For your organisation, it can be the key initiator for long-term corporate relationship building. For the employer, it is the ideal way to generate vital support for charities, regardless of their size and budget. And for donors, it is a tax-efficient way of giving to charity. As a further incentive, January 2006 saw the launch of the Payroll Giving Quality Mark, which recognises and rewards organisations of all sizes for making Payroll Giving available to their staff.
Lindsay Boswell is Chief Executive of the Institute of Fundraising. An independent resource centre hosted by the Institute of Fundraising provides further information and guidance on Payroll Giving,
t: 0845 602 6786;
w: http://www.payrollgivingcentre.org.uk.
The Institute also offers free support and advice to charities across England, enabling them and their donors to make the most of tax-effective giving methods.
w: http://www.institute-of-fundraising.org.uk
- Payroll Giving was first launched in 1987
- Payroll Giving raises over £83m for UK charities each year
- Latest statistics show that income from UK payroll donations has surged since the introduction of the Payroll Giving Grants programme.
- During the first half of the financial year, payroll donations have risen by almost 22% in the period April to September 2005, compared to the same period of the preceding year.