Editorial: Transforming an old banger

Private involvement in payroll giving is worth a try, writes Stephen Cook

Stephen Cook, editor
Stephen Cook, editor

The British Leyland of fundraising, as Joe Saxton said last year: it's a cruel epithet for payroll giving, which has three times as many participants as when it began and raised £118m in the last financial year. But there's something irresistibly apt about the comparison. Payroll giving is clunky, hasn't moved with the times and carries an aura of unfulfilled potential. Only 3 per cent of the workforce uses it.

And what does a Conservative-dominated coalition government do in such circumstances? Why, it whistles up the private sector. Last week, the Treasury proposed to abandon the restriction that allows only charities to act as payroll giving agencies and let commercial firms get involved. It also wants to standardise forms, increase transparency and halve to 30 days the time they are given to transfer donations to charities.

Even without privatisation, the last three reforms would significantly improve the cumbersome processes that have deterred charities and employers from really putting their weight behind payroll giving. At the moment, there just aren't enough good reasons for them to get involved, and the private sector might find ways of changing that.

The government is right to note that clever, commercial, competitive organisations have sprung up in the past decade and used new technology to change the landscape of giving. There's no intrinsic reason why they shouldn't succeed in payroll as well - if they choose to get involved.

The touchstone, of course, will be whether they can make it work financially. Even if it's not highly profitable, some companies might want to get involved partly for the reputational benefits it could bring. There'd be a lot of kudos in, say, helping to raise participation to 10 per cent, yielding £180m by 2015 - those were the figures posited by the Philanthropy Review in 2011.

And what became of British Leyland? After many travails, some of its former parts have become very successful in their own right, notably Land Rover and the Mini. Perhaps payroll giving will before long become the model that everyone aspires to.

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