Payroll giving: Workplace giving is just the job

Although the use of payroll giving is gradually increasing, it has yet to achieve its full potential. Richard Best offers some suggestions to make it more popular and proposes a scheme to get board members giving.

It is true that the underlying trend for payroll giving has been upwards. But it is also true that this growth is very gentle. Somehow, giving in the workplace has never fulfilled its promise.

There are good reasons why payroll giving should be a real winner. The CAF/ NCVO Individual Giving Survey shows that less than a third of individual giving was tax efficient in 2003. Yet payroll giving can be seen as even more tax-efficient than Gift Aid. It allows higher-rate tax payers to use the whole of their tax band to support charity - none of that complicated business of the difference between the standard rate of tax and the higher rate being refunded to the individual (who has to make another gift if the intention was to part with the money). No keeping bits of paper to make claims later - just the simple act of signing away a modest monthly sum. And when a special appeal comes along, what could be easier than signing away another sum well in advance of payday?

Lots of payroll giving, promoted by good fundraisers, directly connects the individual to a single charity. But no one wants to feel trapped indefinitely into a fixed pattern, and it seems important for people to be able to notify those handling the payroll that they want to switch instantly to a different charity. I prefer the arrangements for regular donations to accumulate in a workplace pot, with periodic meetings of all participants to hear presentations from charities and to choose collectively the destination for their funds. (It is pretty easy for the individual to be able to specify a split between their favourite charity and the common pool, if they want to be part of both forms of giving.)

For the sophisticated donor, monthly donations can go to a CAF personal account, allowing 'charity cheques' to be written for all those one-off requests for sponsorship and emergency appeals, while standing orders take care of regular gifts.

Sensible employers not only make the arrangements for giving easy (for example, via their intranet) but will match the giving of their workforce.

The statistics suggest that this will not require too much generosity.

Just in case, the employer can cap either the total they contribute to a give-as-you-earn (or other payroll giving) scheme, or their matched contribution to a one-off appeal that goes round to all staff (probably on an internal email). In return, the employer will win extra loyalty from staff and have the satisfaction of knowing that meetings of the give-as-you-earn committee to decide on donations will be a good morale booster.

And tax-paying employers will, of course, get their own relief on their matching payments.

But how to get all these workplace schemes up and running? The key to payroll giving will be for an individual to promote the scheme. It is unfair for the boss to take this on: staff can feel pressurised. A keen volunteer - with the job rotating from colleague to colleague over time - can be the most successful approach. But for big organisations, engaging a professional fundraiser to get the ball rolling could be a worthwhile investment. As always, success depends on face-to-face contact. If someone comes and talks to you about the pleasures of giving through this painless route, and the fun of together spending relatively sizeable sums, matched by the employer and supported by the taxman, you may well be persuaded.

A round robin email to everyone is unlikely to work.

For those on the organisation's governing board, rather than on the staff, payroll giving can work brilliantly. Non-executive directors and members of the boards of quangos that receive remuneration can sign up for the same tax-efficient deduction at source. Again, setting up a CAF account can work well, giving freedom to spend the tax-free sum on a range of charitable causes. I like the idea of a nationally promoted 'give-as-you-govern' scheme for board members of health trusts, housing associations and other organisations that attract socially committed individuals. There are millions of pounds out there that could find their way to charitable good causes.

Finally, turning this on its head, what about CAF accounts being created in place of any remuneration for those who sit as trustees on the boards of charities and get no financial reward? This is a way of thanking voluntary board members while ensuring funds go only to charity. At the Joseph Rowntree Foundation, we put £1,000 a year into a CAF account for each of our committee members.

Gradually, the huge advantages of giving in the workplace can and should spread: good employers and imaginative individuals inside all kinds of organisations can do wonders in boosting giving, to everyone's benefit.

Lord Best has been director of both the Joseph Rowntree Foundation and the Joseph Rowntree Housing Trust since 1988. He also sits on several committees and is chair of the Giving Forum. He was made a life peer in 2001.

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