In this guest post, James Redhead, director at Technology Trust, brings to light the four myths surrounding Gift Aid and what charities can do to dispel them.
Mention ‘Gift Aid’ to anyone in the charity sector and you’re guaranteed to elicit a response – it may involve eye-rolling, blank looks, or a knowing glance and a curt “we have it sussed” though.
The truth is, as a sector, we don’t have it sussed at all. In fact, according to the Charities Aid Foundation, over £750 million of potential Gift Aid income goes unclaimed every year.1 So where are we going wrong?
Gift Aid is meant to be simple – UK taxpaying donors tick a box and charities claim the basic tax rate for these donations back from HMRC. Unfortunately in practice, it’s not that straight-forward.
People forget to tick boxes or the wrong people do it – pretty soon it all gets too complicated to bother with, especially for small donations. Right?
Wrong. A huge percentage of the £750 million figure I mentioned earlier comes from unclaimed Gift Aid on small donations. The average unclaimed gift aid from cash donors ranges from £11 – £24. Not claiming on these amounts really adds up, and can essentially rob you of thousands of pounds per year in fundraising.
There are a lot of myths like this about Gift Aid, so next time, before you roll your eyes, walk away or say you have it sussed, I encourage you to take a look at some of the typical responses below and ask yourself the questions we pose – chances are your charity is losing out on unclaimed Gift Aid.
Myth #1: “We collect all our Gift Aid, so it’s not a problem for us.”
Consider: Do you include all Gift Aid – even with a value under £10?
Myth #2: “We undertake regular Gift Aid conversion mailings, so everything is in hand.”
Consider: Mailings usually convert 1 in 10, what about the other 9 donors?
Myth #3: “We checked recently and it’s not very much, so it isn’t really a priority for us.”
Consider: Are you sure? Typically, over 80% of unclaimed Gift Aid is less than £15 in value.
Myth #4: “The cost of trying to collect the smaller amounts is far too much, so we just concentrate on the higher value amounts.”
Consider: There can be high costs if you use a standard telephone fundraising model in which the risk stays with you, but there are other approaches now.
If you found yourself falling into the trap of any of these myths, help is out there! You can learn more about reclaiming Gift Aid and our tt-giftaid service here. Alternatively, feel free to get in touch.
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