The proportion of employees donating to a payroll-giving scheme has seen a 12% decline, according to a report from Equiniti ICS.
The HR and payroll services provider also found there has been a decline in donations of up to 50% since September 2008, coinciding with the recession.
Alan Foley, director of Equiniti ICS, said: “Payroll giving is a great way to donate to charities as it is particularly efficient in terms of tax and provides a secure and dependable income stream for the charities.
“However, as with much other discretionary expenditure, it has suffered from the ill effects of the recession, and some charities will inevitably be suffering financially as a result.
“What is significant, and bodes well for the future, is that employees are not deserting their charities altogether and stopping donations completely; instead they are choosing to cut back, which is much more positive in the long term, as it shows an on-going commitment, but tempered by short term personal financial fears.”
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As published in many papers today, Equiniti ICS said that charities have suffered a steep fall in the amount of money people donate to them via their salaries in the last two years. However, Equiniti ICS is only talking about the 220 organisations whose payroll services it deals with out of 8,500 organisations which are set up to give to charity direct from the workplace.
The national picture about the amount people are giving through the workplace is totally different however. Nationally, giving in this way has risen. In 2009 – 2010 monies raised through workplace giving increased by £2 million on the previous year to £106 million plus an additional £12.5 million from employer matching. The average monthly donation rose from £11.49 to £12.20.
The Geared for Giving Campaign, championed by Duncan Bannatyne, to raise awareness of the huge benefits to charity of workplace giving, reached its target of making the scheme available to more than a million more employees this year and aims to crack the two million target.
It could be that one or two of the organisations Equiniti ICS is talking about suffered from a very small number of large donors pulled back causing the reduction in average sums given, but the really good news from their survey is that the number of people donating is broadly the same as last year and this is borne out by national statistics for 2009 to 2010.
This is a good indicator of the generosity of the British workforce and an acknowledgement that those who are lucky enough to be in work carry on supporting their favourite charities in the harsh economic climate.
Charities claim they miss out on over £900 million through inefficient giving so it is vital, through their fundraising efforts, that people spread the word about giving through the workplace which is the most tax-efficient way to give to charity.
It has been reported widely as if these monies have already been lost by charities which give completely the wrong picture of the current marketplace.
Payroll giving has been seen to be very resilient even in the current climate and official figures show an additional £2 million increase in the past year, compared to the previous year.
Payroll giving is still the most tax-effective way of regular giving to charity. The APGO are very aware that the scheme has not reached in full potential with over 10 million employees still without access to the scheme and we are working with charities, businesses and official organisations to develop it and make it more widely available.
The future of payroll giving is secure with so much interest being shown by so many organisations that see it as an excellent way to support charities.
Payroll Giving remains the most tax effective way for an employee to donate to a charity of their choice. For a 40% and the new 50% taxpayer, Payroll Giving remains the only way that a charity can automatically receive all your tax on your charitable donation.