Viewpoint: Institute of Fundraising to blame for failed scheme

The poor response to the payroll giving initiative was not caused by the apathy of employers, but by bad planning and support.

I am ashamed that the Institute of Fundraising should blame the return of £4m of Government funding to promote payroll giving on the apathy of employers who failed to promote the scheme.

This stance implies that employers have a moral duty to force employees to donate to charity. But I believe donating to charity is a personal and individual matter.

The scheme to target small and medium-sized enterprises was announced unexpectedly in the Budget of March 2004. So far as I am aware, there was no advance warning. The institute and the Government then took until January 2005 to decide how the scheme would be operated, thus reducing by a third the amount of time in which the scheme would be available. Most SME employers signed up in the last six months of the scheme, which gave them little time to organise any kind of effective promotion.

There was no lower limit on the number of employees required to qualify for the grants of between £300 and £500, nor on the length of time for which an employee should donate. As a result, some employers took advantage to improve their cash flows.

The grant could either be set against the cost of setting up the scheme (for a small company, a maximum of about £10) or be given to a charity of the company's choice. The classic claim was from a sole trader who had one employee and gave £1 to a charity for one month. Acting within the rules, he took his grant and ran.

Payroll giving agencies could claim costs for running the scheme and for marketing. However, the institute refused to pay for extra staff to promote the scheme, even though professional fundraising organisations probably find 80 per cent of new donors to payroll giving in a year.

Regrettably, the promotion of payroll giving is not high in corporate priorities. It was the failure of the Institute of Fundraising to understand this that caused the problem, not the apathy of employers.

So there were three main reasons for the under-spend: the failure of the institute and the Government to quickly produce a plan for the scheme; the failure of the institute to support the professional fundraising organisations that were most likely to succeed in finding donors; and the institute's failure to understand the pressures on small businesses.

I am certain, however, that the scheme was a success in terms of raising awareness of payroll giving within the business community, and I am also certain that at the end of the next 20 years of payroll giving the scheme will be the norm in practically every business. Bill Lane is joint chief executive of payroll giving agency South West Charitable Giving

5 more things ...

- Payroll giving was launched in 1987 to allow employees to donate from their pre-tax pay. In 2005/06, £84,740,956 was received by charities after payroll-giving agencies had deducted their commission. The average gift is between £7 and £10 each month.

- In 2005/06, the number of employers signed up to payroll giving was 110 per cent higher than in the preceding financial year. More than 600,000 people donated by payroll giving.

- The SME payroll giving grant programme ran from April 2004 to the end of December 2006. Any SME with a contract dated before 31 December could claim a start-up grant.

- The number of SMEs (organisations with fewer than 500 staff) signed up to the scheme by the end of the employer incentive SME Grant Programme was 3,380, which exceeded the target.

- The Institute of Fundraising launched a pilot training workshop for charities in November 2006, aimed at charities with few resources but high local profiles.

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