Press Releases

27 February 2011

Number of workers giving money to charity through payroll falls by 30,000 raising concerns over Big Society

• Recession highlights a weakness of the Payroll Giving scheme

The number of employees giving money to charity through the Government’s Payroll Giving scheme has fallen for the second year in a row, says Wilkins Kennedy, the Top 22 Accountancy firm.

The number of employees using Payroll Giving fell by 30,000 in the last 12 months* from 754,000 to 724,000.

Wilkins Kennedy explains that the scheme peaked at 758,000 members in 2007/08, but has fallen since as the recession has meant workers left the scheme due to unemployment or because of financial hardship.

Payroll Giving is a scheme that enables employees to make regular donations to any UK charity straight from their gross salary (before tax is deducted), to receive immediate tax relief of up to £5 for every £10 donated.

Wilkins Kennedy points out that donors who have been made redundant and found new jobs are not automatically enrolled on the scheme, even if it is offered by their new employer.

John Howard, Partner and Head of Charity and Not-for-Profit at Wilkins Kennedy, says: “The decline in participation in the Payroll Giving scheme is a major concern.”

“A loss of 30,000 donors is a serious worry for charities as donations made through Payroll Giving are very high margin donations with virtually no administration costs.”

“This comes at a time when charities are feeling the strain from the Government’s cuts to local authority spending. At the same time, the recession has increased the workload of many charities.”

“Making it easier for an employee to transfer their donation when they move to another job would help reduce this scheme’s attrition rate.”

“Donations are lost when an individual moves to a company that doesn’t offer the scheme, or if it is offered, the employee has to go through the hassle of setting up their payment again through their new employer.”
A big problem for Big Society?

Research from the University of Bristol** has revealed that the amount of money people give to charity as a proportion of their spending has remained almost the same for 30 years, with donations worth 0.3% of a person’s overall spending in 1978 which has risen to only 0.4%  in 2008.

Comments John Howard: “In order for Big Society to work, the public must be more engaged with giving charitable donations.”

“More should be done to support Payroll Giving, which when in place, has high rates of retention and provides consistent, reliable funding streams to charitable organisations.”
 
“This is exactly the type of giving that is needed.”

Although the number of donors through Payroll Giving has fallen, the total amount of money donated through the scheme has actually increased, rising from £104m to £106m in the last 12 months.

Comments John Howard: “The figures show that less people are in fact giving more money and shows that when Payroll Giving is correctly administered, the scheme is very effective.”

*To June 2010
**Report produced by University of Bristol / Cass Business School

Press Contacts:

John Howard
Partner – Head of Charity and Not-for-Profit
Wilkins Kennedy
Tel: 020 7403 1877

Nick Mattison or Sarah Forsey
Mattison Public Relations
Tel: 020 7645 3636
Mob: 07931 685714