Charities are being urged to work more closely with companies to promote the benefits of payroll giving following Chancellor Gordon Brown's decision to extend the initiative for another year.
The Chancellor announced the continuation of the 10 per cent supplement on charitable giving in his pre-budget speech last week.
According to The Giving Campaign, it is now up to charities to ensure they are doing enough to make the most of the opportunity.
"The announcement is a vindication of the success many charities have had in promoting payroll giving in the past two years," said Amanda Delew, director of The Giving Campaign.
Delew added that it is now important for the sector to build a case for payroll giving to be extended again at the end of 2004.
Payroll giving was introduced in 2000. Last year it raised £72.5 million for charities and 1,000 companies set up schemes.
Despite the upsurge in the number of businesses adopting the scheme, many charity-corporate partnerships still do not include it in fundraising campaigns.
Peter Gilheany, communications manager at The Giving Nation, attributed this to confusion about the costs of launching a scheme and uncertainty about employees' reaction to payroll fundraising.
"Companies that adopt payroll giving usually see tangible benefits quickly," said Gilheany. "We have found that staff tend to respond positively and that it's an excellent way for small- and medium-sized businesses to build links with local and community businesses."
The Giving Nation is currently trialling a project in London that will see a consortium of small charities work together and build a payroll-giving model to present to local companies.
The Charities Aid Foundation also welcomed the announcement from the Government. Chief executive Stephen Ainger said that donors were increasingly seeing payroll giving as good value for money and the best way of making a tax-free donation.
"At a time when consumer confidence is uncertain and the value of the stock market is low, the Government needs to be doing all it can to boost charitable giving by individuals,"said Ainger.