There's one banking story all charities are talking about: the phasing out of cheques.
Late last year, the Payments Council announced that cheques would be out of use at the end of October 2018. The decision sparked a flurry of articles in the press, with the voluntary sector being seen as one of the major losers. But is this necessarily going to be the case?
There is an important distinction between the use of cheques by charities for administration and the use of cheques by donors. On the administrative side, many charities have used cheques as a way to ensure that funds are kept under control through a system of dual signatories. But there is already an efficient and user-friendly alternative to this: online dual signatory facilities ensure that trustees can still keep tabs on each payment. CAF Bank and others already offer this service, and I wouldn't be surprised if more banks were to follow suit as we get nearer to the cut-off date.
Where donors are concerned, the issue is more complex. Charities will need to respond to changes in donor behaviour. Will they use electronic transfers such as direct debits? Will they donate in other ways, such as online or by text? Or will many simply stop donating?
There are now more ways to give to charity than ever, and banking and finance are heading in different directions as new technology is introduced. In Belgium, where cheques have been abolished, banking is done at specialist and secure e-banking units in banks that look rather like turbo-charged ATMs. Could these be linked to a database of charities? Some cash machines in the UK allow people to donate to chosen charities; could this be extended to all charities?
In Japan there is a 'pay by mobile phone' culture, enabling people to charge purchases to their monthly bills, and in the UK large charity events such as Comic Relief and BBC Children in Need have both raised huge sums through text donations. We're already seeing contactless payment with the Oyster card on London's transport.
Although these are not necessarily alternatives to cheques, they do illustrate the many new opportunities for fundraising that exist, which charities have only just started to explore. We should not underestimate the impact that the end of cheques might have on charities; but neither should we underestimate new advances in technology, nor people's ability to respond to change.
Whatever workable alternatives to cheques emerge, charities should ensure that they are not left behind by their forward-looking donors, who may have already changed their ways.