Cheques and balances

Charities are reluctant to discourage donors from writing cheques, but the rest of the world is moving on. David Ainsworth reports


The Payments Council, which supervises UK payment systems, will publish a review at the end of this year that is expected to propose an exit strategy for the use of cheques, widely acknowledged to be in terminal decline.

The dilemma for charities is that their use of cheques is declining less steeply than in the rest of society. Banks would like them and their donors to use more modern methods, but charities are sometimes reluctant to discourage any form of giving or to abandon old habits.

The result can be tension, as when staff from Breast Cancer Campaign felt they were under pressure from their local bank to use a bulk cheque-processing system instead of bringing large numbers of cheques to be processed at the counter.

Alan Carter, head of supporter services at children's charity the NSPCC, said that cheques made up only 1 or 2 per cent of its donations. "We always ask people to make regular gifts by direct debit or standing order," he said. "When we run a one-off fundraising campaign - at Christmas, for example - we get more cheques, but even then a lot of people make bank payments or pay online."

Carter said the NSPCC would prefer to receive donations from supporters by other methods, but he did not want to see cheques phased out.

"That would be a bad thing," he said. "It would cause us problems. I wouldn't want to discourage any method of giving, because if some people can't give in a particular way, they won't give at all."

Kevin Barnes, director of finance at children's charity Barnardo's, said it still received cheques from people making one-off and irregular gifts.

"For the cheques we do receive, we use the Barclays Cheque Advantage service to pay these into our account in bulk, freeing up resources to concentrate on charitable activities," he said. "We have dramatically reduced the number of cheque payments we make in order to reduce our costs."

Jon Mosscrop, head of charities at Barclays Commercial Bank, banker for 29 of the top 100 charities, said that the volume of charity cheque receipts had not declined at the same rate as in other sectors.

"By offering the best financial tools and technology available for delivery of charitable payments, we believe we can help improve efficiency and reduce costs," he said.

Mark Hemingway, a spokesman for HSBC, said his bank would have no problems accepting cheques from charities, but added that he felt the sector should work to find other ways for people to give.

"It's of benefit to charities if they can find other methods because of the high processing costs," he said. "It's not a tax-efficient way to give, and it's a nightmare in administrative terms. Giving through websites will help more and more."

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