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Fundraisers should be more enthusiastic about payroll giving

Fundraising | 10 Oct 2011

Payroll giving isn’t perfect, but it’s well worth your time. David Burland says that fundraisers should show as much enthusiasm for the mechanism as companies.

On the face of it, it was not a great summer for fans of payroll giving. Sector luminaries, most notably nfpSynergy’s Joe Saxton and British Red Cross director of fundraising Mark Astarita, criticised the mechanism and advocated that we should look at other forms of individual giving.

Yet behind the media interviews and blogs, there is another picture. Figures from HMRC show a rise in payroll giving from £106m to £114m between 2009/10 and 20120/11. In my book, an increase of over 7 per cent is pretty good in these times of economic woe.

The argument is that fundraisers don’t like payroll giving. But even if that is true, as fundraisers does it matter what we do or don’t like anyway? Isn’t it more important what donors like?

The Institute of Fundraising commissioned a study in 2008 which showed that, unlike most forms of individual fundraising, more men use payroll giving than women. Fiftyone per cent of payroll givers also come from the 31–45 age group, a group not known to be the best responders to, for example, charity direct mail. Most tellingly, 40 per cent of payroll giving donors do not donate through any other mechanism.

Some of the strongest advocates for payroll giving are in the corporate sector. I recently attended a dinner at the House of Lords organised by the Geared for Giving Campaign, a campaign devised and fully funded by Workplace Giving UK. Most of the attendees were from companies, from the very large to smaller family business.

I am a little ashamed to say that the passion and support shown at the dinner for payroll giving is greater than I have heard in our sector. They saw payroll giving as a great way to bring together their employees and to build engagement with charities. They can easily measure its success and were eager to show that payroll giving had a higher take-up in their company than in their rivals. Moreover, in many cases companies cover the admin fees and/or match their employees’ donations. The latter raised an extra £9.5m in 2010/11 according to the Association of Payroll Giving Organisations.

One of the problems with payroll giving seems to be in how charities approach it. Should it sit with individual giving teams or with corporate fundraising departments? Wherever it ends up, it is often the neglected offspring compared to other mechanisms.

A more strategic approach to payroll giving can pay dividends. At Help the Hospices, we have used data around the number of employees who support us via payroll giving to develop wider relationships with companies. For example, the fact that we were one of their employees’ favourite charities for payroll giving was certainly a factor that led us to be selected as the Tesco charity of the year some years back.

As well as offering an ‘in’ with companies, payroll giving can also form an important part of an ongoing corporate campaign. Our work with Royal Mail and the Clydesdale and Yorkshire Banks has proved that, with payroll giving donor numbers increasing strongly during the duration of our partnership. Indeed, payroll giving also provides a legacy to such campaigns. Our three-year partnership with the Royal Mail ended four years ago, but we still receive nearly £20,000 a month from payroll giving donations from their employees.

I know payroll giving is far from perfect. There are challenges around the administration, the time taken to transfer funds and data capture of donors, though these can be overcome. The lack of portability is a frustrating issue. But over 700,000 employees use it, many companies love it and for charities willing to think about it strategically, it can open other doors and wallets.

Let’s finish with the words of one donor who contributed to the online debates after Joe’s comments; ‘I choose to give to a charity straight from my pay which helps research into an illness my son has and I am grateful that my employer matches what I give and doubles that donation.’ Sounds like they like it!

David Burland is deputy chief executive at Help the Hospices

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Directory: British Red Cross | Help the Hospices | HM Revenue & Customs (HMRC) | Institute of Fundraising
Who's Who: Joe Saxton | David Burland | Mark Astarita