Payroll giving
Payroll giving is a means by which employees make a monthly donation to a charity or charities directly from their pay packet.
The employee chooses the amount and the recipient/s, and the money is taken from their pay before tax, so the money that would normally go to the taxman goes to the charity instead.
Benefits to the voluntary sector
- Tax efficient donations: For every pound donated by the employee, the charity will receive £1.28 as the money is taken before tax is deducted.
- Low administrative costs: Covering both giving and receiving, the scheme keeps administrationg costs and resources to a minimum - for charities and businesses.
- Stabilising income: Payments are made on a regular basis, giving a relatively reliable and predictable source of independent income. This helps you cover costs that grants might not and helps longer term planning.
Process
- Find out about payroll giving from HM Customs and the Charities Aid Foundation. Give as You Earn (GAYE) is a payroll giving scheme run by the Charities Aid Foundation and they can help you set up as GAYE scheme. Charities Trust and Stewardship also run similar programmes.
- Plan your promotion to local business/es. Consider your pitch and promotional materials (for example, leaflets, letters, emails) and plans for keeping those who sign up informed about your work.
- Network to identify possible companies. An approach is likely to be more successful if there’s a personal/professional connection between your charity and the company. For example, you might buy services from them, the partner of the managing director might volunteer with your organisation, your neighbours might work for a sympathetic employer - or be one!
Impact
Success in getting employees to sign up to a payroll giving scheme will depend on your ability to communicate your cause effectively and to build relationships. If and when people have joined the scheme and are giving regularly, the relationship-building must go on to retain - and develop - that support.
- Employees may increase their personal support in other ways eg by volunteering
- Employees might help you to solicit support from their employers as part of the company’s corporate social responsibility policy
- Increased financial stability can lead to more opportunities for your organisation and may allow you to spend more time focussing on acheiving your objectives
Payroll Giving Toolkit
