Larger charities should voluntarily publicise the amount of Gift Aid they claim as a way of highlighting its importance among smaller charities and the general public, according to Robert Jenrick, Exchequer Secretary to the Treasury.
Jenrick’s comments come after the publication of research by HM Revenue & Customs that concludes a lack of understanding of how Gift Aid works and benefits charities is one of the biggest reasons why £560m of potential Gift Aid donations does not reach charities, despite almost £1.3bn in Gift Aid being collected by charities each year.
To help increase understanding of the scheme, the government is sending 50,000 letters about the Gift Aid Small Donations Scheme to charities across the country, as well as supporting a Charity Finance Group-led Gift Aid awareness day that is due to be held on 4 October.
Speaking to Third Sector after the launch of the research report yesterday, Jenrick said that if larger charities voluntarily released information about the amount of Gift Aid they received each year it would demonstrate its role as a vital source of income for charities.
"If larger charities put into the public domain the amount to which they benefit from it, that could act as a spur to their colleagues at small charities to take it seriously," he said.
"If you could see that at the charity you support Gift Aid is an important revenue stream, it would make you more likely to tick the box the next time you donate money to that charity."
Jenrick said the government would listen to feedback from charities about how Gift Aid worked, and if "there are lessons to be learnt, we want to learn them".
But he also said that the charity sector was partly responsible, alongside the government, for increasing understanding of Gift Aid, particularly among small, local charities.
"Our campaign will attempt to raise public awareness, but equally there is a task for charities and the associations that represent charities to disseminate the message, particularly to smaller charities that don’t have the paid staff and training, and to explain that the process is not as complex as perhaps they might imagine," said Jenrick.
He declined to commit to any further legislation to reform Gift Aid or the GASDS, but said that "if there is anything more we can do to raise awareness, we want to do it", albeit with the challenges of communicating with a very large and extremely diverse sector.
He said there were no plans to change Gift Aid from an opt-in to an opt-out system, as some in the charity sector have suggested as a way to boost Gift Aid income.
Recent reforms to the GASDS, which allows charities to claim Gift Aid-like relief on up to £8,000 of small cash donations each year, came into force last year, and Jenrick said that the scheme was unlikely to be changed again in the short term, despite some charity sector bodies believing that those reforms did not go far enough.
"I think it is important not to chop and change, because these are schemes that need to have wide public understanding," Jenrick said.
"One of the lessons of the HMRC report is that it takes time for the public to learn and feel confident about a scheme like Gift Aid. So I don’t think we will rush to make changes.
"However, the GASDS is an example of where we listened to the charity sector and brought forward a specific scheme to address concerns, so we are always open to new ideas and ways of moving forward."