OPINION: HOT ISSUE - Should the payroll incentive be extended past April 2003?

Until April 2003, the Government will add a 10 per cent top-up to the gross amount a donor gives through the payroll. Most charities support the scheme, but some in the sector are sceptical about how well payroll-giving works in practice and think that the money would be best spent elsewhere.

ANDREW McCALLUM, community affairs manager, Centrica


Centrica offers a payroll-giving scheme to employees across the group's UK brands - the AA, British Gas, Goldfish and One.Tel. The scheme was relaunched to all employees in September 2000, using the introduction of the Government's 10 per cent supplement as an incentive to encourage participation. The promotion more than doubled the take-up with a further 1,053 employees pledging more than £89,500 per year to benefit more than 100 charities. The growth of payroll giving at Centrica has undoubtedly been supported by the Government's top-up initiative. The incentive provides a strong communication hook, helping to raise awareness and generate increased participation. In spite of the success of UK payroll-giving schemes in recent years, there is still potential for greater employee involvement and the Government should consider extending the supplement to maintain this positive momentum.

BENGIE WALDEN, chief executive, BLISS - The Premature Baby Charity


Payroll giving is widely recognised as the most effective way to make donations to charities. The Government encourages it, charities have welcomed it, and there is a clear and growing enthusiasm for the scheme from the business sector. BLISS, although modest in size, is one of the top 100 charities to benefit from payroll giving. We have used the 10 per cent incentive as an opportunity to attract new companies. As a result, our annual income has increased by £35,000, which has allowed us to set up three new-born resuscitation centres in the UK, saving countless babies' lives. Ten per cent is a modest investment for the Government but for a charity such as BLISS, the revenue is huge. If the Government withdraws its support at this stage then charities will be deprived of a valuable extra source of regular income. Overall, it would be a tragic mistake for it to back out now.

TINA STEELE, project manager, Institute of Fundraising Payroll Giving Forum


The uplift on payroll giving has not only generated more than £12 million in direct funding for charities over a two year period, but it has also provided the environment for a unique altruistic link between government, donors, the corporate and charity sectors. Before April 2000, payroll income growth averaged out at 16 per cent and over the past two years this has risen to around 54 per cent.

With only 2 per cent of the workforce involved it presents all the stakeholders with huge opportunities for sustained development. The uplift makes ongoing promotions attractive to the participating companies and this is likely to diminish if the incentive ceases. The support being given also encourages companies to assess their charitable contributions and the current formula of matching the 10 per cent is very appealing. From the Government's point of view, not only has the supplement proved to be a success in financial terms but it also generates great PR. Keep it going Mr Chancellor - you know it makes sense.

JOE SAXTON, manager, nfpSynergy


There can be no justification for the Government supporting payroll giving indefinitely. If payroll giving needed pump priming to put it on the map, it's had it. Why should it get a 10 per cent supplement when no other form of fundraising receives this? If payroll giving needs 10 per cent extra to survive (or cover the extra agency costs) then it's simply propping up an unpopular form of fundraising. Fundraisers should use their imaginations and see what other schemes might benefit from a supplement. The £8 million it costs the Government to provide the top-up could be better used to encourage children to give by providing all secondary school pupils with vouchers, which they match and give to charity. It could be used to lower the postal rates for small charities, or to encourage corporate fundraising by adding 10 per cent to company donations. The real issue about payroll giving is about re-engineering the entire product so that it is central to the fundraising strategy of far more charities. Until those who want payroll giving to succeed see its failure to flourish without a 10 per cent supplement as a failure of the product, then the top-up can only be propping up a lame duck.

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