Don’t confine discussions about Gift Aid to the small print
Howard Lake | 21 November 2014 | News
Donors should be “primed” about Gift Aid early on in their recruitment process, rather than leaving the Gift Aid declaration to the small print, research commissioned by HM Treasury recommends.
The research by TNS-BMRB – Gift Aid: Understanding Donor Behaviour – is one of the measures announced in the Budget this year to encourage more donors to use Gift Aid, being carried out by the Gift Aid Working Group. The National Audit Office estimates that there are up to £2.3bn of donations on which Gift Aid is not claimed.
The main reasons for not signing up to Gift Aid identified by the 40 donors interviewed for the study were:
- It was an additional tax for the donor or charity
- It was a request from the charity to sign up to regular donations
- It added only around 5-10 per cent to donations, and was thus not worth claiming.
Interviewees also reported a number of “practical barriers”, including the inconvenience of having to fill out a form and the “discomfort with sharing personal information or ‘signing up’ to something not fully understood”.
The research says this behaviour can be “disrupted” by changing the way Gift Aid is presented:
“By introducing Gift Aid early on in the donation, donors can be primed to pay more attention to it, viewing it as an integral part of their donation. Priming is also an opportunity to emphasise the benefits of Gift Aid to charities, by emphasising the significant financial benefit to charities overall, or relatable, concrete benefits to the charity.”
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The format of the Gift Aid Declaration should also be shortened to appeal to donors, with the report recommending that “legal language” – which has deterred participants from claiming – may not be needed on the declaration itself. Especially in online declarations, this information could be provided in hover-overs or pop-ups.
The report also suggested key messages charities should communicate to overcome the most common misunderstandings:
- The benefit to charity at no cost to the donor
- The fact that eligibility is related to individual tax paid, rather than taxpaying or working status
- That the donor’s address is required to identify them as a taxpayer
- The fact that donors must have paid enough tax to cover all Gift Aid donations
- That the declaration refers to the current tax year.
The Charity Tax Group welcomed the report’s call for a simplification of the Gift Aid Declaration. Richard Bray, vice chair of the group, said:
“The Gift Aid Working Group has seen early drafts of the revised model Gift Aid declaration and these show definite improvements, with a much shorter model envisaged and unnecessary references to Council Tax and VAT removed. It is vital that we create a Gift Aid Declaration that is easy for donors and charities to use and fit for the modern age.”
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Review Gift Aid Scheme, IoF tells next government – July 2014
New Gift Aid Declarations to be trialled this summer – April 2014
Gift Aid claims made by charities fall for second year in a row – October 2013
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About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.