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We explore how charities can achieve a reliable income through payroll giving
With increasing costs and reduced funding for charities, it’s important to look at different ways to bring in income. Payroll giving is one option. Payroll giving has raised more than £2 billion for charities across the UK since it was set up in 1987, according to Charities Aid Foundation.
This article looks at how charities can encourage businesses to set up payroll giving and increase their incomes.
Payroll giving – also known as Give As You Earn – is a way for people to make regular donations to charities through their employers. All UK registered charities are eligible to receive donations through payroll giving. The donation is taken straight from someone’s gross pay.
Charities Aid Foundation notes that payroll giving provides charities with a regular and dependable source of income. This can help them to plan their work more effectively and build their long-term resilience.
Also, charities don’t have to claim gift aid on funds earned through payroll giving. This is because it is taken straight from an employee’s gross pay, before income tax is deducted. So, a charity doesn’t need to claim the tax back from HRMC, which frees up time and resources for staff to focus on other work.
Here are some tips for how to encourage businesses to set up payroll giving.
Have a conversation with your current corporate partners about payroll giving. If they don’t already have a payroll giving scheme in place, you could help them to set it up and introduce it to their staff. It’s a chance to let their employees know about the work the charity is doing and how they can support it.
You could run a promotional campaign to encourage employees of the corporate partner to sign up to payroll giving. This could include, for instance, a prize draw – with prizes such as a free lunch or an extra day off from work – for people who sign up to payroll giving.
It’s a good idea to offer in-person assistance at the corporate partner’s workplace to help staff sign up to payroll giving. This could be delivered by staff working for the corporate partner (charity champions), or employees from your charity.
Charities should promote the benefits of payroll giving to both businesses and employees in their marketing materials. The benefits to businesses include:
The benefits to staff include:
It’s also worth pointing out that payroll giving is not compulsory. Employees of businesses that have payroll giving set up can opt in to make donations
There are a number of resources charities can share with corporate partners to help them set up payroll giving. These include:
Follow-up questions for CAI
How can charities effectively encourage businesses to implement payroll giving?What are the key benefits of payroll giving for corporate employers?How does payroll giving provide tax advantages to donating employees?What strategies increase employee participation in payroll giving schemes?Which resources help companies set up and manage payroll giving programs?Our courses aim, in just three hours, to enhance soft skills and hard skills, boost your knowledge of finance and artificial intelligence, and supercharge your digital capabilities. Check out some of the incredible options by clicking here.