Gift Aid has added £12bn to charitable donations in first 21 years, research finds

Directory of Social Change study concludes it is a successful system but must be changed so donors and charities can apply it more broadly

Gift Aid
Gift Aid

Gift Aid has added £12bn to charitable donations in its first 21 years, according to new research.

A report by the Directory of Social Change shows that between 1990/91 and 2011/12 individuals and companies made net donations of £43bn on which Gift Aid could be claimed.

It concludes that although Gift Aid is a "good and successful system", reform is needed to make it easier for donors and charities to apply it more broadly and engrain it more fully in the giving culture.

The report says that slightly more than 65,000 charities made claims for Gift Aid payments in 2011/12. This represents a just over half of all fundraising charities and about a fifth of voluntary organisations eligible for Gift Aid, it says. The number has increased by 10 per cent in the past seven years.

The report says that 42 per cent of UK donors used Gift Aid in 2011/12, compared with 32 per cent in 2006/07. This finding contrasts with that of a recent report by the National Council for Voluntary Organisations and the Charities Aid Foundation, UK Giving 2012, which said that the proportion was 39 per cent in 2011/12.

The number of donors using Gift Aid is increasing at a faster rate than the number of charities reclaiming it or total donations, according to the report, which says this suggests that more smaller gifts are being processed.

Caron Bradshaw, chief executive of the Charity Finance Group, says in the report's foreword that the significance of Gift Aid cannot be underestimated but  "we should not rest on our laurels".

"The report shows areas where there is clearly opportunity for both government and the sector to improve how we use this scheme, and we should challenge ourselves to recognise there are places where we are falling short of the mark," she says.

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