Payroll giving falls by a quarter3

Fundraising | Celina Ribeiro | 30 Nov 2010

The value of payroll giving has fallen by more than a quarter, taking up to £27m out of charity pockets, according to new research.

Not only have the number of payroll givers dropped since the onset of recession in 2008, but they have significantly reduced the amount they give each month says one payroll services company.

The proportion of payroll givers in the workplace has fallen, Equiniti ICS found in its survey of the 125,000-plus employees whose pay it processes, from 4.3 per cent in 2008 to 3.8 per cent.

Of more concern, however, is that the average amount given via payroll giving has fallen also: from £19 per month before the recession to £14 now.

Equiniti estimate that this fall is equivalent to 25 per cent of the worth of payroll giving, or £27m from the £109m raised by the mechanism in the 2007/2008 financial year.

Alan Foley, director of the company, blamed the recession for the drop, but said there was hope in the figures.

"What is significant, and bodes well for the future, is that employees are not deserting their charities altogether and stopping donations completely; instead they are choosing to cut back, which is much more positive in the long term," he said.

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Janet Forster
Chair
APGO
4 Dec 2010

Payroll Giving year end results 2009-2010 show a completely different picture to the one reported in the press this week.

Janet Forster-Warnes Chairman of APGO reported that figures collated by their members in April 2010 gave an indication that revenue was up but with a slight drop in employee numbers giving.

This was backed up with official figures released by HMRC which showed Payroll Giving continuing to grow with £106 million being donated to UK charities during that period by 724,000 donors. The previous year’s figures were £104 million donated by 754,000 donors. Additionally over £12.5 million was given during this period through employer enhancement.

It appears that Equiniti ICS has released this information based on their research among the 220 organisations for which they run Payroll Giving services and projected from these trends that £27million could be lost.

Janet Forster-Warnes Chairman of APGO comments; “It has been reported widely as if these monies have already been lost by charities which give completely the wrong picture of the current marketplace. Payroll Giving has been seen to be very resilient even in the current climate and official figures show an additional £2 million increase in the past year, compared to the previous year”

Janet Forster-Warnes Chairman of APGO continues; “Payroll Giving is still the most tax effective way of regular giving to charity. The APGO are very aware that the scheme has not reached in full potential with over 10 million employees still without access to the scheme and we are working with charities, businesses and official organisations to develop it and make it more widely available.

The future of Payroll Giving is secure with so much interest being shown by so many organisations that see it as an excellent way to support charities.”

Payroll Giving remains the most tax effective way for an employee to donate to a charity of their choice. For a 40% and the new 50% taxpayer, Payroll Giving remains the only way that a charity can automatically receive all your tax on your charitable donation.

[Reply]

Elena Joseph
Head of New Projects
Workplace Giving UK
1 Dec 2010

It is such a shame that people simply repeat misleading figures without checking first.

The real and much bigger picture is that the British workforce continue to dig deep and the amount of money they are giving to charities from their pay actually increased by £2million between 2009/10 and now stands at an impressive £106 million – plus an additional £12.5 million from employer matching. Not only that but the average monthly donation rose from £11.49 to £12.20 per month.

This research comes from the 220 odd companies working with Equinity BUT there are 8500 running such schemes!

Rarry is right in as much as the real average gift is about £5-7 and that some very large donations scew the figures and make the average much higher.

Unfortunately the media seem to love a negative story!

[Reply]

Rarry Revan
Ranter
Rantingrules
1 Dec 2010

Aarrghh! Reforecast payroll income down down down! Don't panic Mr Mannering, this analysis isn't all it is cracked up to be.

1) Average gift falls from £19/month to £14/month? I have signed off thousands of payroll PFO invoices and the average gift rarely exceeds the standard £5 per month. Equiniti clearly are sampling some rich city bods who I thin will make up a small proportion of the payroll giving donors in the UK.

2) The number of payroll givers in the sample of 125,000 has fallen from 5375 to 4750. So that is an attrition rate of 11.6%, fairly standard for payroll giving, not much higher than in previous (non-recessionary) years.

3)Income has fallen from the sample has fallen from £1,225,500 to £798,000, a fall of about 37%. So where does the 25% of the overall figure come from.

4) Why are they using 2007/08 figures?

I wouldn't wipe my bum with this research.

Big hugs,

Rarry.

[Reply]

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