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Loose change 1

Fundraising | Michael Naidu | 12 Jan 2009

Happy new year! Did you have a good Christmas? Eat lots of turkey? Celebrate with a luxury or two? Good on you, it can’t be all doom and gloom.

But those early December paydays make January a long and difficult month, so I’m sure you will have (in some way) reviewed your finances to see if you are making the most of your money.

Changing your energy provider, shopping at Lidl or waiting for those inevitable mid January/early February sales makes sense in this economic climate. Yes I know Gordon says we need to carry on spending but the constant stream of negative press stories shout louder than our government’s Keynesian message.

Now is also a good time to review your fundraising set up to see if you can work more efficiently to free up more cash to invest in generating more donations.

Just before Christmas I had lunch with Rupert Tappin from Future Fundraising. Working with Morag Fleming from Quarriers, he analysed attrition rates of supporters recruited through street and doorstep fundraising to look for trends. Any charity member of the Public Fundraising Regulatory Association could get this analysis done anonymously for free.

One interesting trend they found affects any donors giving by direct debit. On average (including Mencap), 10% of the data they received on lapsed donors had two BACS codes that were treated as meaning the donor has cancelled when they actually refer to an issue that meant that individual payment couldn’t be claimed.

There are many BACS codes, but the two that kept on popping up were ‘Instruction Cancelled’ and ‘Refer to Payer’. So while we may presume these donors have cancelled, they may think they are still giving (who really checks their bank statement line by line, each and every month?).

Do you still write to lapsed donors and tell them how their gift is making a difference or do you chuck them in with your cold mailings? Quite a different tone in those mailings I think you will agree.

I checked with our database team and phew, they are aware of the issue and write to all donors when we receive these queries. But is writing the best way? Could a well timed call be more effective at keeping these vital donations flowing in? 

Next and an area where all charities should focus time and resources is Gift Aid. Now I’m not going to tell you how to get more, but rather how not to get less.

Sound confusing? Well, back in December Mencap’s Gift Aid procedures were audited by Her Majesty’s Customs and Excise and unfortunately we weren’t perfect.

We couldn’t find all the forms we were claiming for, some income was incorrectly claimed and our gift aid forms weren’t technically 100% (although our statement which doesn’t mention the transitional 8% wasn’t queried).

We had to give back some money, not a great deal in proportion to the amount we claim, but that is still a hit to our budget at a time when cash is king (or Queen as the case may be at PF).

So, now is a good time to do a mini audit of your own:

1) Pull 100 individual claims from your most recent gift aid file and find the hard copy or digital image of the form. This is exactly what HMRC will do and they will use that sample as an indicator of your overall database.

Fail to find too many and you may well face further scrutiny. In the meantime you could be using your warm telephone programme and budget to mop up any missing gift aid forms.

2) Review your training procedures for data entry, human error can lead to costly errors. Are your systems set up not to claim Gift Aid on CAF cheques which are already tax effective?

3) Review all materials with a gift aid statement. Are they consistent? Not all should be. If a donor collects change in a home money box, the box should tell the donor only to tick the Gift Aid box if they are the only person putting money in. Fail to do this and you can’t claim Gift Aid on those donations

If you find that you have incorrectly claimed, give the money back by subtracting it from your next claim and tell the HMRC why you are doing that. Honesty and transparency go a long way in the eyes of the taxperson.

Finally and I know this is a bit of a long blog (or a slog as Joe Saxton called my first PF attempt), we heard from The Print Connection, our print managers that their suppliers are putting up paper prices by 8-10% on the 2nd of February. If you can pre-buy and store your paper, you could make a real saving now for next years’ budget.

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Directory: The Public Fundraising Regulatory Association (PFRA)
Who's Who: Michael Naidu