Oxfam reveals £1 billion life-saving potential of British workers' salaries

Howard Lake | 27 April 2007 | News

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Charity promotes payroll giving so people can give 40 per cent more and save lives through their salaries
Research from Oxfam has found that charities are missing out on millions of pounds in potential income each year because British workers do not know about the tax benefits of payroll giving.
An Oxfam/YouGov Plc survey has found that a third of working Brits would donate an average of £9.60 a month through their salary if they knew how, which could add up to almost £1 billion. In response to the Budget’s reduction in potential Gift Aid¹ income, the charity has launched ‘Oxfam at Work’ which aims to raise £1 million in it’s first year by showing taxpayers how they can save lives by donating through their salary.
For those earning over £33,000, it is the easiest and most tax efficient way to end poverty. With a new hassle-free application process, the charity hopes to attract thousands of new supporters by the end of the year to boost Oxfam’s ongoing work to end poverty around the world.
Oxfam Director Barbara Stocking said: “Today signals a new era for fundraising. You can make a regular donation to Oxfam straight from your salary, which is tax free, so your money can go up to 40% further. Giving £10 only costs you £6.
“For too long the benefits of payroll giving have been hidden from view and if we can raise the profile of payroll giving just a notch in the UK, we can make an even bigger difference to the lives of millions blighted by poverty and suffering.”
The launch of Oxfam at Work comes following Chancellor Brown’s Gift-Aid changes introduced in last month’s budget which could cost Oxfam as much as £1.8 million per year from 2008. This is equivalent to what Oxfam spends in two years in Rwanda.
However, the survey² of almost 2,500 working British adults revealed that unless charities start to promote alternative forms of fundraising like payroll giving as tax and time efficient ways to give, that loss might not be offset. More importantly, it shows charities are losing out on substantially more potential income.
The survey results revealed:
· A third of workers do not support any charities through their workplace;
· Of those that do, annual campaigns to raise money for a chosen charity are the most common (22 per cent), even though alternative ways to donate exist that are both more tax and time efficient.
· Only 4 per cent of respondents currently use payroll giving, the easiest, most tax-efficient way to donate;
· Of those questioned, 33 per cent said that if they knew more about payroll giving, they would potentially donate an average of £9.60 per month gross. This could translate to almost a billion pounds additional possible income annually for good causes³.
Based on current levels of expenditure, this multi-million-pound pool of potential donations could fund the entire programme spend of Oxfam GB and it’s global affiliates for the next six years.
Payroll giving enables donations to be made directly from a worker’s pre-tax salary celebrates its twentieth anniversary this year. However, it remains under-subscribed and misunderstood amongst the general public.
Because donations are made before tax, a percentage of the donation is contributed by the tax man, so donors can afford to be even more generous. In the case of standard rate tax payers, the tax is 22 per cent of the donation. Givers who earn above the higher tax threshold of £33,000 are even better off as the cost to the tax man is 40 per cent of the donation.
For example:
· If an employee makes a monthly £10 gift to Oxfam via their payroll, the net cost will be £7.80 for standard rate tax payers, and just £6 for higher rate taxpayers. Oxfam still receives the original gross gift of £10 – the remainder in both cases is contributed to the charity by the tax man.
· By contrast, Gift Aid is added at the standard flat rate after tax is deducted, and has to be claimed back by the charity. Charities cannot retrieve all of the tax paid by donors earning £33,000 and above using Gift Aid because they can only claim back at the standard rate.
Oxfam currently receives £1.5 million from approximately 6,000 payroll givers. The six companies whose employees payroll-give the most to Oxfam are Barclays, the BBC, BT, The Department for Work and Pensions, IBM and the Royal Bank of Scotland. Between them, they give Oxfam £337,296 a year – enough to fund irrigation schemes in North West Brazil for 10 years, or the charity’s HIV/AIDS family care programme in Malawi until 2009.
Overall, the payroll giving raises £95 million per year in the UK. This compares to £2.9 billion in the USA, where 35 per cent of workers use it to support good causes 4.
Tina Steele, Payroll Giving Project Manager of the Institute of Fundraising, says:
“Employees like Payroll Giving because it’s very easy. By filling in just one form, they can give to a variety of causes and get tax-relief on their gifts.”
“Payroll Giving enables charities to receive regular, reliable donations directly into their bank accounts without the need to allocate any administrative resources. Employers who successfully promote their Payroll Giving scheme are eligible for HM Government branded Certificates and Awards, recognising their commitment to fostering a culture of giving in the workplace.”
For more information about Oxfam at Work and to sign up to the scheme, go to
www.oxfam.org.uk/atwork
or call 0845 301 2233
-Ends-
Notes to editors:
About Oxfam:
Oxfam GB is a development, relief, and campaigning organisation dedicated to finding lasting solutions to poverty and suffering around the world. There are more than 750 Oxfam shops in the UK. More information at
www.oxfam.org.uk
Notes:
¹ The basic rate of tax is being lowered from 22% to 20% with effect from 5 April 2008. This means that for each £1 given through Gift Aid the value to the charity falls from £1.28p to £1.25p
² All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,327 adults. Fieldwork was undertaken between 10th – 12th April 2007. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
³ Total potential income that can be raised based on an average donation of £9.60 per month = £77,376,000 per month, or £928,512,000 annually.
⁴ Figures from the Charities Aid Foundation.
For further information, case studies and interview requests, please contact:
Phil Bloomfield/Sarah Belizaire-Marron
Midnight Communications
Tel: 01273 666 200
Email: ph**@mi******.uk sa*****@mi******.uk

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