Press Releases

21 September 2011

Number of workers giving money to charity through payroll falls further last year

• 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 third year in a row says, Wilkins Kennedy, the Top 22 Accountancy firm.

The number of employees using Payroll Giving fell by another 4,000 in the last 12 months to June 2011 to 720,000.

Wilkins Kennedy explains that the scheme peaked at 758,000 members in the year to June 2008, but has fallen since as household incomes have stagnated.

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.

John Howard, Partner and Head of Charity and Not-for-Profit at Wilkins Kennedy, says: “Participation in the Payroll Giving scheme has fallen again last year. This is worrying news for charities as they are already under a huge amount of strain.”

“Investment returns for charities will have been hit by market turbulence and many non-profit organisations face a reduction in payments from local authorities.”

Wilkins Kennedy explains that funding for charities have shrunk as a consequence of the Government’s austerity measures, which means that the third sector now relies more heavily on private donations to fund their operations.

However, John Howard says that “with rising unemployment, wage freezes and a higher cost of living, people are much more squeezed financially, so it’s harder for them to give to charities.”

“It means that people will need more encouragement to donate. Making it easier for them to do it would be an effective way of achieving that.”

“Donations made through Payroll Giving are particularly important for charities because they are very high margin donations with virtually no administration costs.”

Wilkins Kennedy says that more efforts could be made to advertise the scheme better among employers, which should then help increase take-up among their employees.

John Howard comments: “Many employees who’ve been contributing for years drop out of the scheme when they change jobs simply because their new employer hasn’t got the facility set up. Making it easier for an employee to transfer their donation when they move jobs would help reduce the scheme’s attrition rate.”
 
Although the number of donors through Payroll Giving has fallen, the total amount of money donated through the scheme has actually increased, rising from £106m to £114m in the last 12 months.
 
Explains John Howard: “The figures show when Payroll Giving is correctly administered, the scheme is very effective. They also show that people who can afford to give are willing to give even more.”
 
ENDS
 

Press Contacts:

 
John Howard
Partner – Head of Charity and Not-for-Profit
Wilkins Kennedy
Tel: 020 7403 1877
 
Fay Israsena or Nick Mattison
Mattison Public Relations
Tel: 020 7645 3636
Mob: 07931 685714