Tom Latchford comments on making online giving as easy as a pound in a bucket
Since its inception in the 1990s, Gift Aid has only undergone two major changes, pertaining to online returns and small donations - and both these changes are very recent. The Gift Aid system is still archaic and in need of a radical overhaul.
Which is why the Treasury’s consultation, Gift Aid and Digital Giving, is promising. In essence it recognises that advancements in technology which boost charity fundraising campaigns are being hampered by antiquated Gift Aid processes.
Ultimately, donating via a charity’s digital channels should be the equivalent of popping a pound in a bucket - or as easy, quick and painless as ordering shopping from Amazon.
Sadly, the reality is very different. Raising IT recently carried out a simple online experiment, where we removed Gift Aid declarations from a donation form. Worryingly we saw an increase in donations proving what we’d all feared: the cumbersome and confusing process of claiming Gift Aid hinders spontaneous text and online giving.
Key to the success of Gift Aid reform is translating this explanation into layman’s terms and making the donations funnel as short and straightforward as possible. It’s amazing how easy it is to put someone off giving by asking people for too much detail. Instead the third sector needs to catch-up with commerce and replicate one-click payments, storing the Gift Aid status of a donor for use across multiple donations.
And the same applies for staff, not just supporters. Smaller charities are forced to spend far too much time on administration, fearfully checking the eligibility of donors for Gift Aid. Their salaried time can be used much better and the government could be doing more right now to assist technology companies helping charities transition to the new online returns system by September.
Disappointingly, while millions of pounds could be saved from streamlining the system – and the government is essentially offering £15m in tax relief through this latest consultation – this paper is too bland to really shake things up. One needs only to look at innovations in the US to see how defective our tax incentives are.
The public still needs educating when it comes to understanding Gift Aid, so there is plenty we need to be to doing, not only to make the process simpler in practice, but also to communicate how it works.
The hurdle that really needs to be overcome is that the Government sees Gift Aid a huge incentive to boost giving, but without education, that message simply doesn't translate. Digital giving systems, where Gift Aid is automatically applied, will solve that problem. But we need more than a consultation. We need fast change.