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86 per cent of CAF Bank deposits made by cheque

Finance | Gareth Jones | 9 May 2011

CAF Bank has moved to demonstrate the charity sector’s reliance on cheques by revealing that it received 1.7 million cheques worth £471m in the 2010/11 financial year.

Responding to the Treasury Select Committee’s inquiry on the future of cheques through its parent organisation the Charities Aid Foundation, the bank said that this represents around 86 per cent of the total deposits it receives.

Peter Mitchell, chief executive of CAF Bank, said: “What our figures prove is that there are still huge amounts of cheques being used in the charity sector and that this represents a significant part of charitable income.

“We need to be sure that any alternatives to cheques, such as electronic transfers or payments, are in place and widely used by both the public and charities, before the decision is taken to abolish them.  

“For example, at CAF Bank we’ve introduced dual signatory online banking which allows charities to specifically replicate the processes of double signing a cheque and the security that offers with the functionality of an online transaction.  

“We hope that initiatives like these will be replicated across the banking sector.”

Institute of Fundraising, Help the Hospices, express concern

Meanwhile, the Institute of Fundraising has warned of disastrous impact the abolition of cheques may have on charities, and expressed concern that the demise of the payment system is inevitable.

The Institute was among a number of umbrella bodies, individual charities and other organisations associated with charities to present its concerns about the proposal to phase out cheques by 2018 to the Treasury Committee which reopened its investigation into the issue.

Largely, those submissions appear to be ones of objection to the plan. With the Institute representing a number of charities, it warned that abolishing cheques “could spell disaster for some charities” and also displayed a lack of faith in the power of the consultation to delay the end of cheques, saying that it suspected that the abolition of cheques is a “foregone conclusion”.

Its estimate that some charities receive as much as 80 per cent of their income via cheques was echoed by the Help the Hospices group, which said that many of its members received up to 75 per cent of their voluntary income in cheque form.

Help the Hospice has also submitted its objections to the proposal to the committee, telling the group that it is “hugely concerned” by the possible end of cheques and calling for it to reconsider the 2018 timeline for abolition, and only phasing out cheques if a suitable alternative is found.
 

New cheques research proves sector antipathy to plan

Research by Fundraising and nfpSynergy has also highlighted the strength of the sector's opposition to the Payments Council's proposal, with some 640 charities responding. 

The results of this research has now been submitted to the Treasury Select Committee inquiry.

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Directory: Charities Aid Foundation