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End of cheques will increase costs and bureaucracy, says charity chief
By David Ainsworth, Third Sector Online, 6 January 2010
Head of hardship charity RL Glasspool Charity Trust says it makes more than half its grants in this way
Grant-making charities will face increased costs and administration because of the decision by the Payments Council to phase out cheques by the end of 2018, according to an organisation that gives money to people suffering hardship.
The RL Glasspool Charity Trust made about 3,300 small grants totalling £860,000 last year, of which more than half were payments by cheque.
The charity has written to the Payments Council pointing out there are 2,200 similar trusts making payments worth £300m a year to individuals. " Clearly the withdrawal of cheques may well cause charities like ourselves some considerable difficulties" the letter says.
It adds that the charity's trustees "are not happy about the possible weakening of our financial controls and procedures resulting from using two passwords on a computer rather than two signatures on a cheque."
Frances Moore, chief executive of the charity, told Third Sector that no practical payment method existed to replace cheques.
She said that making payments through other methods, such as the electronic payment system Bacs, would require the charity to collect more data and increase its paperwork. This would also increase its fees to the bank and cut the level of grants it could make.
"Writing cheques is fundamental to our charitable work and we cannot currently see any acceptable alternative," she said.
A spokeswoman for the Payments Council said: "Now the decision has been taken to phase out cheques, we're carrying out research to ensure that we're aware of the potential problems that will be caused.
"We will be looking at cases such as this, and making sure there are alternatives in place before 2018."
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Elaine Tozer, 7 January 2010, 10:12
I am appalled by the fact that the Government plan to phase out the use of cheques by 2018!! Almost all of the donations we receive from both businesses and grant giving charitable trusts come to us in the form of a cheque. I can see people just not bothering if they cannot simply write a cheque.
As a charity we need at least two of our Trustees to sign a cheque for our spending. What will happen about that??
Elaine Tozer
CEO
CF Dream Holidays Charity
1036069
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Nigel Speakman, 7 January 2010, 10:52
All I can see from abolishion of cheques is more bureaucracy. 95% of our money comes in by cheque and 100% is paid out by cheque. To make payments by BACS will require a vast sharing of bank a/c details. The banks are going to be so unpopular over this change. All they are doing is pushing the cost sorting payment out from themselves to their customers.
Who is going to volunteer to be a Treasurer of a Scout Group/Guide Group or small charity with this added weight of bureaucracy.
This change is going to have a devastaing impact on the 3rd sector as a whole.
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