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Payroll giving consultation is disappointing, says IoF

Fundraising | Vibeka Mair | 25 Jan 2013

Peter Lewis, chief executive of the Institute of Fundraising, has given a lukewarm response to the government’s long-awaited consultation on how to reform payroll giving, saying it does not go far enough to address fundamental problems in the system.

The consultation, which addresses how to make it easier to administer payroll giving and drive up the amounts raised through the scheme, makes a number of suggestions, including introducing standardised sign-up forms for all donors, employers and agencies.

However, Peter Lewis, chief executive of the Institute of Fundraising told civilsociety.co.uk that he was disappointed with how far the consultation goes:

“While this consultation addresses some specific issues, on which we will be engaging our members and responding in full, we are disappointed that it does not go further in trying to address the fundamental problems in the system which could make it work better for employers, donors and charities," he said.

The Institute’s members have said the payroll giving system needs transformational reform based on the principles of universality, connectivity and portability. Lewis says these three principles are not addressed in the consultation.

The consultation stops short of recommending that offering payroll giving should become mandatory for all employers, saying it should remain a choice. And while it recommends creating “exit packs” for donors that stop giving through the scheme, to help them continue their relationship with the charity, Lewis says this does not go far enough to embed portability and connectivity into the scheme.

Extra burden for charities

Joe Saxton, driver of ideas at nfpSynergy, was also underwhelmed by the consultation, saying the recommendation to open up payroll giving to the private sector was not a revolutionary change.

Currently payroll giving agencies must be charities, but the government has suggested scrapping this requirement.

Saxton said it would be very unlikely that the big companies who are already signed up to payroll giving, such as Tesco or the Royal Bank of Scotland, would switch payroll giving providers. “What would be their motivation?” he said.

Lewis also warned that opening up payroll giving to private providers would increase the burden for charities. “Multiple providers from a charity’s point of view is not a good thing. They already have to deal with eight to nine agencies at a time. More would increase the complexity.”

Charities welcome payroll giving review

Elsewhere, John Low, chief executive of the Charities Aid Foundation, which pioneered the concept of payroll giving, welcomed the consultation.

“It is excellent news that the government is committed to making this important tax relief scheme work,” he said. “With the right reform, payroll giving can play a huge part in encouraging more people to give and increasing the vital funds reaching charities at a time when demand for their work is higher than ever.”

Sir Stephen Bubb, chief executive of Acevo, also welcomed the consultation and took credit for encouraging the government to launch it. “We welcome the Treasury’s proposal to reform payroll giving, making it easier for donors to give regularly on a tax-free basis. This is what I called for in my letter to the Prime Minister earlier this month. There is massive untapped potential in payroll giving, and as a country we have to raise our game at making it work.”

Simon Hopkins, finance director at the British Heart Foundation, said payroll giving was “ripe for change":

“Today’s workforce is highly mobile and yet when someone changes jobs they must register for payroll giving all over again. It costs the sector an estimated £7m a year and is ripe for change."

And an NCVO spokesman said it was a good time for a review:  “Payroll giving levels have hit a plateau in recent years so it’s a good time to review what we can do to boost giving in the workplace. We’re pleased the Treasury are taking action on this and look forward to contributing to the consultation.”

The deadline for submissions to the consultation is 19 April 2013.

Directory: nfpSynergy | Association of Chief Executives of Voluntary Organisations (ACEVO) | British Heart Foundation | Institute of Fundraising | National Council for Voluntary Organisations (NCVO)
Who's Who: Joe Saxton | Peter Lewis | Simon Hopkins | Sir Stephen Bubb