Institute moots text donation campaign

The Institute of Fundraising hopes to launch a campaign for cost-effective text donations, headed by its departing chair Joe Saxton.

The institute hopes that Saxton can bring together all the groups campaigning to cut prohibitive fees and tax costs on donations. It is calling on major fundraising charities, agencies and campaigning bodies to use their expertise, time and money to help with the movement.

"The institute is delighted that Joe Saxton has accepted our challenge of working to reduce the cost of making a donation by text message to the point at which it becomes cost-effective," said Paul Amadi, incoming chair of the organisation.

At present, text donations are worth about £6m a year to the third sector. But after fees and VAT, charities often receive only about 55p from each pound donated.

Roger Craven of vir2, a technology company specialising in text donations, said he believed that figure could easily rise to more than 80p in the pound – enough to make text donations a valuable fundraising stream when coupled with the twin advantage of instant access to donors and the ease with which money could be given.

Saxton said: "The fundraising potential could well be substantial, not least among the young. By striking the right balance, mobile phone operators, charities and donors could all benefit."

HM Revenue & Customs has recently discussed the question of VAT on text messages with phone providers. Service providers currently collect the tax despite the fact that charities should not be paying it.

One suggestion is the provision of special not-for-profit codes, which could be used only for donations, would be VAT-free and have their own pricing structures.

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