Three umbrella groups have launched a review of the effectiveness of the Gift Aid Small Donations Scheme after it raised only £7m for charities in the year since its launch.
The National Council for Voluntary Organisations, the Institute of Fundraising and the Charity Finance Group jointly announced the review, which includes a survey of voluntary organisations that will be open until 27 June.
The government forecast that the scheme could be worth about £50m a year for charities when it was launched in April 2013, but recent figures released by HM Revenue & Customs show that only £7m has been claimed back by charities in its first year.
The scheme allows charities to claim relief of up to £1,250 a year on up to £5,000 of cash donations, which must not exceed £20 in value individually.
To be eligible, the organisation must be recognised by HM Revenue & Customs as a charity, must already make claims for Gift Aid and must have successfully done so in at least two of the four previous tax years.
Eligibility also depends on the charity not being connected to another charity by having the same trustee board, which the umbrella groups described as "overly burdensome".
Anna Bloch, senior policy officer at the Charity Finance Group, said: "As early indications show that the government’s Gift Aid Small Donations scheme has fallen well below the intended target, we want to understand why this is happening. A number of reasons could be responsible such as a lack of clarity around the eligibility criteria or an overly burdensome claiming process."
Bloch said the survey results would allow the sector to have an "informed conversation" with the government about how the scheme could be improved and how charities could make the best use of it.
The NCVO called for all political parties to commit to simplifying the scheme ahead of next year’s general election. The Iof said it was the "right time" to assess the effectiveness of the scheme by launching a survey.
Daniel Fluskey, head of policy at the IoF, said: "We want to know whether the scheme is easy to use for those charities who have made a claim and find out the reasons why others have not yet done so."
HMRC said the government would review the scheme in 2016, after it had been in operation for three years, and that it had set up an outreach scheme to help charities use it.
A HMRC spokesman said: "It is too early to make an assessment of the GASDS claims received so far. Charities make one Gift Aid claim a year and they have two years from the end of the tax year in which the small donations are received to make a claim. We will therefore have a better picture as we move closer towards 2016."