Unlocking the potential of payroll giving

Sir Michael Rake, BT Group Chairman, has described payroll giving as ‘the simplest and most effective way to give to charity’. If this is the case, why is it that only 3% of the British workforce takes advantage of this tax effective way of supporting their favourite charities?

 It seems in many cases, employees simply aren’t aware that payroll giving exists or that their employers offer it. For payroll giving to be the success it deserves to be awareness of its existence and its benefits are key. Employers need to ensure that they go the extra mile to both support and champion payroll giving internally within their own organisation.  

In our work with companies, we see the positive impact of promoting employee giving equally across all types of organisations from larger PLCs such as Barclays, BT and Tesco to smaller organisations such as FTSE and Think Money, who recently won a Payroll Giving Excellence award.

In these tough economic times, when everybody is feeling the pinch, some employers are wary about promoting payroll giving, worried that it may be perceived by staff as insensitive. However, even in the current climate, we have seen that the spirit of generosity is still high- both Comic Relief and Children In Need have had record breaking years.

The success of the high profile fundraising drives indicates something we see at CAF every day. That contrary to popular belief, in tough times, the public still put their hand in their pocket to support good causes. 

Payroll giving makes perfect sense given its flexibility and most importantly it results in more money goes to charity.  For those on a basic tax rate a £10 donation will effectively cost £8 and for those on the 50% rate a £10 donation will cost £5. Payroll giving can be used to sponsor colleagues and relatives for fundraising events, support disaster relief appeals as well as providing an efficient way of paying regular donations to charity.

To echo Sir Michael’s sentiments, payroll giving has the potential to be not only a sustainable source of income for charities, but also a much needed lifeline as the next wave of Government cuts will start to make their impact early next year. 

Charlotte