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Explore one government payroll giving agency, review advises

Fundraising | Becky Slack | 6 Jun 2008

The fundraising sector should explore the viability of creating one payroll giving agency as a non-departmental public body, the authors of the Institute of Fundraising’s review of payroll giving have concluded.

And common service standards for existing payroll giving agencies (PGAs), along with robust audit and accountability systems are needed if payroll giving is ever to fulfil its potential as a significant source of funds for charities.

These are just three of the recommendations made by Strategy Complete following a six-month review of the fundraising mechanism.

The Institute of Fundraising commissioned Strategy Complete to conduct the review last September after it was forced to hand back to the government nearly half of an £8.3m grants pot it was administering to encourage small and medium-sized businesses to sign up to payroll giving.

At the time, the Institute blamed employer apathy, but some in the sector criticised the way the scheme was run.

Seven main barriers to growth 

Strategy Complete’s review found seven main barriers to the growth of payroll giving, ranging from ongoing perceptions of bureaucratic and administrative inefficiencies, to perceptions that it is harder to build long-term relationships with payroll donors than it is with other donors.

However, the review also found many benefits to using payroll giving. Donors were found to be younger than traditional donors, with 51 per cent falling in the 31 to 45-year-old bracket, and more men than women use it.

Also, said the report, “around 40 per cent of those who give via payroll do not give in any other way”, highlighting that payroll giving is the only way to reach some supporters.

Eight recommendations for change 

Altogether Strategy Complete made eight recommendations for change, which it said are essential if the mechanism’s full potential is to be realised. They are:

• Steps towards achieving a universal payroll giving system that makes the scheme compulsory in certain circumstances.
• Finding an interim solution to support the easy transfer of payroll donors as they move jobs between employers.
• The introduction of robust audit and accountability systems across all payroll giving transactions.
• Reviewing the statutory framework within which PGAs operate.
• The introduction of common service standards for all PGAs and an external system to monitor and report on their performance.
• A systematic mapping of payroll giving to provide robust data to support policy.
• A review of the role and management of PGAs. Strategy Complete said many respondents to its research questioned the need for PGAs; however it doubted they could be removed from the process “in the short term”. In the meantime, “we recommend that there is a detailed review that looks specifically at the viability of creating one PGA as a non-departmental public body. Specifically this should consider the role that competition plays in this market.”
• Continued promotion of payroll giving and support for incentive schemes.

However, questions have been raised about whether these recommendations will be implemented.

Is the effort worth it? 

Simon Burne, senior consultant at Think Consulting Solutions and former chair of the Institute of Fundraising, said: “When you look at the effort that is needed and compare the potential results with what could be achieved if the same effort was applied to simplifying the gift aid system, I would question whether it is worth it.”

However, Strategy Complete’s Vanessa Potter (pictured) said improvements should be made.

“This review has shown there is a difference between people who give via payroll and those who give via other means. We also know that many people who donate through payroll giving don’t give via any other mechanism,” she said.

“We believe there should be further research conducted into these donors and their characteristics, the results of which could prove very valuable to the sector.”

The Institute of Fundraising is inviting people to respond to the recommendations, from which decisions will be made about what course of action to take. The document can be viewed at www.institute-of-fundraising.org.uk and comments emailed to policy@institute-of-fundraising.org.uk by 5 September 2008.

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