Two-fifths of charities get no money at all from Gift Aid, says report

Martin Campbell of Blackbaud, which carried out the research, says this is income lost to charities at a time they really need it

Martin Campbell
Martin Campbell

More than 40 per cent of charities do not get any money from Gift Aid, a new survey has found.

The annual State of the Not-for-Profit Industry report, by the fundraising software company Blackbaud, says that Gift Aid makes up only 4 per cent of total income on average among the 592 organisations surveyed.

The report, based on a survey of not-for-profit groups in the UK and Ireland, also says that only 15 per cent of individual donations are made online despite a rise in the number of charities accepting online donations.

The proportion of organisations taking online donations rose from about 70 per cent in 2012 to 86 per cent in 2013; and the proportion whose online take rose during the year grew from 54 per cent in 2012 to 59 per cent a year later.

Most charities get as little as 5 per cent of their donations online, although arts and cultural organisations use it to generate about 26 per cent of their contributions, the report says.

Martin Campbell, director of strategy and innovation at Blackbaud, said that some charities might have become cautious about claiming Gift Aid after HM Revenue & Customs said it would move to online filing for most claims, except for organisations that do not have internet access.

The survey was carried out in July and August, before Charities Online, the new online filing system, was launched. But Campbell said advance publicity for the system meant his company had received a large number of enquiries from charities about the change.

"The take-up of Gift Aid is low even though this money is available, and that is lost revenue at a time when charities really need it," he said.

He was unable to say whether the proportion of charities claiming Gift Aid had changed in the past year because participants were not asked the question last year.

Campbell said relatively few online donations were made partly because it was a new medium. "Direct debits have been done digitally for about eight years, so you have had about eight years of digital direct debits and 50 years of postal ones," he said.

He added that charities tended to begin online fundraising with "lower-risk" campaigns that produced smaller sums, such as peer-to-peer fundraising for local events, rather than those that raised large amounts, such as major donor campaigns.

Peer-to-peer fundraising – in which supporters raise money on behalf of a charity – is used by 60 per cent of respondents, an increase from 38 per cent in 2012. But the report says that charities could make better use of the technique. One-third of organisations do not get any contact information from people who donate through a peer-to-peer initiative, and 10 per cent of those that do get it do not use it.

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