Stephen Pidgeon’s recent article "Our business is not about money, but connection" argued that payroll giving is a flawed fundraising concept. I completely disagree. One million employees currently give to charities tax free through their pay, raising £130m a year. I recently relaunched the Geared for Giving campaign as a social enterprise to double this figure over the next five years.
Pidgeon writes that supporters aren’t rewarded by donating through their pay and charities don’t have sufficient donor contact details to interact with them. In my experience, this view is outdated. The payroll giving sector, in partnership with the charity sector, has made huge advances in supporter engagement in the past five years. Employees can receive updates about their chosen charities as easily as with other forms of individual giving.
Confusion about the cost of processing payroll giving also needs to be cleared up. The payroll giving agents, which are charities themselves, charge between 2 and 4 per cent to process donations, which is in line or slightly less than other fundraising platforms. Additionally, it is worth noting that 40 per cent of employers operating the scheme cover these costs, so every £1 donated is received by the charity chosen by an employee.
Pidgeon says not enough charities operate payroll giving, and this is one thing we agree on. That is why all our central charity supporters offer payroll giving themselves. It’s one of our partnership conditions, because a charity cannot expect an employee to support it this way if it doesn’t lead by example. With more than 700,000 employees in our sector, all should have access to payroll giving.
I believe the key to transforming this form of donating is quite simply to encourage more employers to operate and effectively promote the benefits to their staff. So how can we achieve this? Helped by the campaign’s high-profile business and sector supporters, we’re influencing change within the boards and senior management teams of the UK’s biggest companies. The campaign has a proven track record of demonstrating that peer-to-peer promotion of payroll giving works and we are now upscaling this activity dramatically.
We are also influencing change through employees. Next spring will see the launch of the first national payroll giving site, in partnership with BT. This will give the 25 million-plus PAYE employees in the UK an easy way to find out if their companies offer the scheme. It will allow them to sign up to support any charity from pay if they wish, but it will also give them an opportunity to request payroll giving.
So between galvanising big businesses and making it easy for all employees to give, we believe we can make giving from pay to charity a social norm, something that is expected from top employers. Only 23 per cent of the UK’s largest companies offer payroll giving, which means a potential 6.5 million more employees could provide long-term funding for charities. I hope the sector will embrace our plans and join us to start this transformation of payroll giving together.
Peter O’Hara is founder and chief executive of Geared for Giving