The gift that keeps on giving….
Gift Aid represents the long-standing principle that money donated to good causes should not be taxed. It recognises the role and worth of charities in society. It’s been with us for more than thirty years and has a current value to the sector of around £1.35bn. And it’s one of the simplest and most effective ways to make supporter donations go further! Yet according to an HMRC study in 2018, a staggering 25% of charitable donations from eligible tax payers are not Gift Aided – amounting to over £560m of potential charitable income, which could yet be claimed.
So why is this? Well one reason is that getting on top of your Gift Aid claims can a tedious and laborious process, and it can be particularly challenging for smaller charities with few paid staff. Other charities will employ fairly reactive methods to gain Gift Aid consent – perhaps relying on the supporter to respond to a letter or an email. And some charities might think because they have a ‘strong’ sign up rate, they really don’t need to do any more.
Our experience – and the experience of our clients – is that every single Gift Aid signature is worth it.
It’s worth doing, it’s worth doing proactively, and even if your Gift Aid sign up rate is as high as 90%, it really is worth pursuing that last 10%. The telephone is a particularly good channel for targeting those who ignore the Gift Aid ask on donation forms because perhaps they don’t understand it – a two-way conversation provides the opportunity to explain Gift Aid and respond to any questions or address any concerns the supporter might have. Even if the supporter doesn’t sign up, at least they might now understand Gift Aid for the future.
Another reason we think every Gift Aid signature is valuable is because one declaration can apply to every donation made in the past four tax years, as well as applying to present and future donations. The value of that signature really starts to add up – even for small charities and small numbers of prospects.
Also, we have seen by engaging people on the telephone about Gift Aid, sign up rates are higher than any other method. Results are normally between 30 – 60% agreed to Gift Aid – a really substantial sum of additional income. And Gift Aid calls also have a surprising impact on supporter retention; we have seen in numerous campaigns how this type of call improves retention by as much as 6%.
That was the experience of Aberlour – we spoke with Dario Lozza Head of Public Fundraising:
“Aberlour has worked with QTS twice in the past 18 months; from the tender process they were head and shoulders above the competition, and they are now a valued strategic partner for us. We have worked together on a range of telemarketing campaigns, and found them to be very experienced and reliable, but flexible as well; in our view they are an ideal partner both for established charities but also for newer entrants to the channel, as they will guide you step by step and ensure campaigns are set up in a compliant and effective way.
As well as having a friendly team looking after their Charity clients, QTS callers are an asset too. We have listened to dozens of calls recording, chosen at random, and found every single caller to work on our campaigns very polite, experienced and friendly. They are very good at building a rapport with our supporters, which is one of the main reasons why we recommend QTS. As well as a solid ROI, the extra value they provide by nurturing the relationship with our supporters cannot be overstated.
One of the campaigns we highly recommend testing is their Gift Aid Campaign; our first two campaigns resulted in an additional 111 Gift Aid declarations from donors who hadn’t initially provided one. These donors had maybe missed the Gift Aid section when donating online, or simply didn’t know what the scheme was about; QTS callers were able to explain the value of Gift Aid to our charity in an easy-to-understand way, and these campaigns were a huge reason why we quadrupled Gift Aid income compared to the year before.”
It’s also worth remembering that a Gift Aid call is not a marketing call; as long as the call does not contain any ask for funds, marketing consent or any marketing or promotion of the charity, Gift Aid TM campaigns can be classed as administrative calls. This is a great opportunity to connect and thank supporters, particularly those you might have normally have limited contact with. We find that supporters often really welcome these calls – conversations are short and the supporter is not being asked for money, and as a result we see the majority of eligible taxpayers choosing to Gift Aid their donations when asked.
Of course, not everyone will be eligible for Gift Aid. However, we’d suggest not to overlook non-taxpayers as a segment – particularly the student segment – revisiting them in future years to check whether their status has changed can be very worthwhile.
- Gift Aid can be claimed on individual and sponsorship donations, but not on activities where an entry fee has been charged or where people have entered a competition.
- If you arrange a ‘donation only’ event where people can attend regardless of what they decide to give, then Gift Aid can be claimed on these donations
- Membership subscriptions qualify for Gift Aid provided they don’t entitle the member to any services or facilities for their personal use.
- A Gift Aid declaration can be made verbally, but a written record of the declaration must be sent the donor before the claim is submitted.
- Record keeping is crucial – look at the format of the HMRC Gift Aid reclaim spreadsheet before you start recording data to avoid extra work later on.
- Remember that you have at least four years to claim so even if this task seem dull or daunting, you have plenty of time to complete it.
If you’re not running a Gift Aid TM campaign yet and you’d like a no obligation chat, then drop us a line. We’d love to help.