Editorial: The many problems with payroll giving

Perhaps the most worrying summary so far of the problems with payroll giving came from a former chairman of the Institute of Fundraising, who recently described it as "the British Leyland of the fundraising world".

Stephen Cook
Stephen Cook

For those too young to remember, British Leyland was meant to be the answer to the problems of the struggling, fragmented British car industry of the 60s. It produced such automotive jokes as the Austin Allegro and the Morris Marina and died a slow and messy death.

The same commentator also put his finger on why payroll giving, despite some progress, has failed to achieve lift-off: there's not much in it for employers. They don't see it as something that can give them a competitive advantage by boosting their image and reputations, and they are more likely to see it as just another damned thing to do. The grants available do not seem to have been a sufficient incentive for them to adopt the scheme in large numbers and promote it to their staff. In some cases, it seems, sole traders have even claimed grants by making single payments to charity and then stopping - hardly in the spirit of the enterprise.

So there's a daunting task ahead for the institute's review of the system, not least because there needs to be substantial buy-in from government and business leaders before a better method can emerge. HM Revenue & Customs could help make the system slicker and more easily understood, and ministers and business leaders could work towards making payroll giving a badge of social responsibility - a bit like Investors in People, the environmental standard ISO 14001, charity partnerships and employee volunteering schemes. When people take or change jobs, their automatic concerns already include wider issues such as pension contributions and medical insurance; the challenge is to add payroll giving to that list.

The task is all the more urgent as other fundraising methods come under greater pressure. Direct mail attracts disapproval on environmental grounds and could suffer badly if we ever get an opt-in system to replace the opt-out system of the Mailing Preference Service. The institute's proposed new code of practice might help to prevent this, but a fall in revenue seems likely. The potential beauty of payroll giving is that donors choose to part with money before they even get it - a process that is, by definition, considerably easier and less painful than persuading them to part with it once it has gone into their bank accounts.

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