Low levels of understanding about the process of claiming tax relief through the Gift Aid scheme are limiting the extent to which this scheme is being used in fundraising, according to a new report, ‘Key Barriers to the Adoption of Gift Aid’, written by Ipsos MORI and published by HMRC and the Charities Aid Foundation (CAF).
The report, based on qualitative research among 46 charities, reveals that, regardless of the regularity with which they used Gift Aid, all charities view it as a valuable additional source of income, but most only understand the rules that apply to their own specific fundraising strategies. The information available about submitting Gift Aid claims is felt to be hard to understand, while confusion about the rules also acts as a barrier. Despite the fact that only around a third of donors currently use Gift Aid, in 2006/07 this generated £830m in tax repayments. According to the most recent estimates of private investment in the cultural sector, published earlier this month by Arts & Business, individual donations to cultural organisations totalled £67.5m in 2006/07, with legacies and bequests amounting to £77.9m and income from friends schemes reaching £153.1m.