Gift Aid Services

How much giving is gift aided?

• The way that the current Gift Aid scheme is structured means that only about half of the potential GA tax refunds are claimed. This is mainly because the most frequently-used forms of fundraising do not easily lend themselves to collecting Gift Aid declarations. Even major public appeals with masses of television coverage (LiveAid, Comic Relief, DEC’s Tsunami, Christian Aid Week etc) find it difficult to obtain a really substantial proportion tax-effectively.
  
  Research commissioned by HMRC shows that the donors give most often through collecting tins 54%, raffles 52%, buying charity goods 43%, sponsorship 37%, house-to-house 34%, fundraising events 26%, entrance or membership fees 23%, and church collections 20%. These are predominantly spontaneous one-off giving methods for smaller donations, for which charities find it incredibly difficult to collect valid Gift Aid declarations (GADs). Several of these fundraising methods are not voluntary donations (eg raffles) or provide a personal benefit to the donor, so are not eligible for GA. It is estimated that overall about two-thirds of charitable donations comes through these methods, of which perhaps only 10% - 20% are made tax-effectively.

• Charities have been much more successful at getting GADs (typically over 70%) for the more committed but much less frequently used methods like one-off cheques or credit cards 16%, direct debits or standing orders 11% and payroll giving 2%, which often involve other “form-filling” (eg for banks or employers) by dedicated donors.
  
  In 2006-7 fewer than 64,000 charities claimed GA repayments from HMRC. 70% of these repayments went to about 1600 large charities (2.5% of the total recipients) that claimed over £50k each. Less than half of all registered charities made any GA claim at all.
  
  The HMRC/ONS’s 2004 research showed that even prompted awareness of Gift Aid was fairly low (27%) amongst the public, and roughly the same for Payroll Giving (28%). So it is clear that the majority of potential donors still do not make their charitable donations tax-effective.