Following a lengthy consultation process (The Government received 98 written and 257 online responses plus approximately 300 sector representatives attended consultation events)  and energetic lobbying from the key bodies in the sector – especially the Institute - the Chancellor has announced the implementation of measures aimed at increasing the long-term take-up of Gift Aid and streamlining processes for many charities.

The Government announced a universal de minimus 4% error rate  and a raft of measures aimed specifically at small charities with under £1m turnover, providing simplification of the process burden, along with training and mentoring, and standardised tools and guidance. On top of this de minimus 4% error rate, charities have up to 60 days after the initial audit visit to rectify any invalid or missing declarations found first time around . For charities who claim up to £2,500 per year, if there is a 4% error rate or less then no repayments will need to be made. This should benefit thousands of smaller organisations 

A self certification scheme has been announced for larger charities but clarification of how this will work is still being sought. There was also an initiative to extend the Tax-effective Giving Initiative to build on the Institute’s vast experience in this area. 

So all in all perhaps its what we expected. None of the big radical changes some might have wished for but wide-ranging change that benefits thousands of donors, charities and the causes that they serve. And although this represents significant progress in the area of Gift Aid I feel there is still much opportunity to increase the amount of monies rightfully claimed by the sector on donations by UK taxpayers. Blackbaud remains firmly committed to furthering that cause by facilitating knowledge and events, promoting the exchange of views with HMRC and providing products and services that both protect and preserve the sector’s income in this area and the reputation of Charities receiving donations from their supporters.

The Institute of Fundraising has published a paper on ‘Gift Aid, the change in Basic Tax and Transitional Relief’ - click here for more details. They are also running a survey to obtain feedback from organisations about tax effective giving. You can take part in the survey by clicking on this link.

April is fast approaching and there are a couple of things for charities to consider relating to Gift Aid.

Firstly, there is the reduction in income tax and thus, the reduction in the rate of Gift Aid from 28p in the £ to 25p in the £. There appear to be some misconceptions about this though. You are able to claim the full 28p in the £ for any gifts you receive up to and including the 5th April 2008 that are covered by a valid Gift Aid declaration regardless of whether you put this claim in before or after the 6th April 2008. The reduced 25p in the £ rate only applies to gifts received on or after the 6th April 2008. You will not loose out on Gift Aid for gifts prior to this date by delaying submitting a claim.

Secondly, and not to be forgotten, is that as we are coming to the end of the tax year; the not so new Gift Aid scheme is approaching 8 years old. If you have gifts still to claim for that were donated during the 2001-2002 tax year then you need to claim for these on or before 5th April 2008 or you will loose any Gift Aid applicable on these gifts. Of course this cut off date will vary depending on whether you are a Trust or a Company and when your financial year runs from and to.

We are running a Sponsorship Webinar at 10.00am on Tuesday 25th September; please join us to discover how you can:

Please click on the link below to enrol:

 https://bbeuropeevents.webex.com/bbeuropeevents/onstage/g.php?d=809347211&t=a

In light of the ongoing consultation processes The Treasury are holding to try and gauge what it is the sector actually want from Gift Aid, I think the answer to that question is who knows?

Finally Gift Aid is receiving the limelight it so rightly deserves and is front page news, but why does it take something that could ultimately affect charities in an adverse fashion before this is the case? We should have been shouting about Gift Aid before this and making the most of its added benefit and income.

There is a huge amount of speculation as to what will be decided, whether it is to fix the rate of Gift Aid and disassociate its connection with the Income Tax Rate altogether, or as the Tories have now proposed, a set percentage of donations to be assumed to come from tax payers without the need for paperwork. How these and other proposals may work in practice is another matter. There were a great many suggestions put forward at the Institute of Fundraising forum in May that were published shortly after the event.

The Institute of Fundraising has kindly given us permission to post their link with respect to this latest ‘Hot Topic’ on our Blog:

http://www.institute-of-fundraising.org.uk/informationaboutfundraising/forfundraisers/hottopics/giftaid.htm 

Please add any suggestions or comments you have about what you would like to see happen with Gift Aid.

A gift by definition is ‘the transfer of money’ or ‘goods, etc. without the direct compensation that is involved in trade’.

If a person is paying for the pleasure or pain that is involved in competing in an event; this cannot be considered to be a gift and therefore, the money paid is not Gift Aid applicable. If, however, they decide to raise additional sums to that required in order to allow them to compete; this would indeed be classed as a gift and would be Gift Aid applicable.

For example, if a charity decides to put together a fund-raising event that costs £100 per person, but only people who raise £500 are allowed to take part; Gift Aid cannot be claimed on the £400 difference; as this extra funding is not a gift, but a prerequisite so that the person can take part in the event. If this same person then went on to raise £800; Gift Aid could be claimed on the additional £300; as this is truly a gift and are giving money to the charity for no personal gain; i.e. there is no benefit.

Whenever in doubt about whether monies raised or donated are allowed to have Gift Aid claimed on them or not, it is prudent to check the dictionary definition of ‘gift’. 

We are sorry to say that the Sponsorship Workshop taking place on 3rd of May is now fully booked.

This invaluable session contains 3 presentations; one from Helen Elliott of Sayer Vincent detailing how to maximise Gift Aid from fundraising events, the second from Blackbaud Gift Aid explaining our sponsorship utility, and last, but certainly not least; Andrew Kayley from the HMRC giving an invaluable insight into how to provide accurate Gift Aid claims for sponsorship.

We are planning to hold another workshop soon. When we have details of this we will publish them; so if you have missed out this time round, please let us know and we can reserve a place for you on our next workshop.

There are few departments within a charity that don’t play a role in the process of Gift Aid management.   It would stand to reason that all departments with any degree of responsibility in the management of Gift Aid share the responsibility to help grow this valuable income stream.   Although fundraisers spearhead the promotion of Gift Aid other departments such as Marketing, Supporter Services, Finance and IT all can make a valuable contribution.

This makes it all the more important that suitable systems and processes to effectively manage Gift Aid are not only implemented but also kept up-to-date.  It is already becoming vital that such systems offer the kind of Gift Aid program clarity that will help induce growth. 

Business growth generally is driven through investment in more advanced technology.  Although generally the focus of Gift Aid growth is concentrated upon innovative ways of appealing to the socially conscious public can growth be realised through greater clarity of your existing supporter base?

Gift Aid in it’s current form (post changes to the Finance Act 2000) took 2-3 years to start realising it’s strongest growth.  One reason suggested for this lethargic start was the time required to invest in new systems.

Is there still scope for improvement in the management process of your Gift Aid program and will a more granular analysis of your supporter base lead to even greater Gift Aid success?   

Experience tells us the answer to this is Yes.

So, what possible steps can an organisation take in order to start maximising the return on Gift Aid scheme investment? 

Perhaps a good starting point would be to take full stock of the existing ‘health’ of your Gift Aid and non-Gift Aid supporter base.  By analysing and understanding possible grey areas in the current management of Gift Aid a firm platform can then be established allowing you to confidently claim, develop and grow Gift Aid income for the years to come.   

Looking at the amount of Gift Aid revenue that is left with the Chancellor each year and in light of his recent budget announcement it is clear that improvements in Gift Aid management must be sought, and that this responsibility should not be solely shouldered by Fundraiser’s. 

Welcome to the Gift Aid Blog

What a time to launch. Whilst offering encouragement to Charities to claim their Gift Aid entitlement the Chancellor takes £70m - £100m (it depends who you ask!) of claimable Gift Aid out of the system in the recent budget.

I think its time to fight back. Let’s use this blog to share ideas on how to maximise Gift Aid claims and to secure the claims that are made such that HMRC Audits can safely be passed and these hard earned donations can be maximised in terms of fundraising effectiveness. Lets use it to lobby, to argue, to think creatively and to make a real difference.

I’d like to think of the blog as having a really positive role to play. Its easy to feel like victims when Gift Aid can seem complex, HMRC are coming round to audit and even the Chancellor seems against us.

But in the democratic world of the Internet it will be exactly what you want it to be. And that’s even more exciting.

Happy Blogging!

We’re coming to the end of one financial year and starting another.

So, what needs to be considered when planning your Gift Aid strategy for the upcoming year?

The most important consideration needs to be the wording within your Gift Aid declaration, or more specifically the date gathered within the wording. The 6th April 2000 is no longer a valid date to claim tax from, on your constituent donations; this must now be changed to 6th April 2001. Check all of your Gift Aid forms to ensure they comply with this date change.

Take advantage of this date though, rather than having wording relating to claiming tax ‘from this date forward’, incorporate the earliest date possible; otherwise, who knows how much Gift Aid you could be missing out on!

Of course, the earliest date you can claim Gift Aid on is dependant on whether your charity is a Trust or a Company. With this in mind there is a new business rule incorporated within The Raiser’s Edge 7.81, which requires you to choose your status and, therefore, only allows you to claim Gift Aid for the finite time allowed by your status. This is set within the Configuration page.

Keep your Gift Aid declarations to the point. Make sure you have a valid tax declaration, the date applicable (within the declaration) and either a tick box or a signature line, if you would rather. If you over-complicate, your donors are less likely to complete the Gift Aid declaration accurately and you will increase your costs in ascertaining your donors’ Gift Aid eligibility. Make it simple!

I have no doubt that Gift Aid is a relevant and important issue for charities but so far I have only been made aware of one industry event to focus on this as a key revenue generator. Recent Budget annoucements and the furore of comment still, in my opinion, leaves this as an open issue. The focus continues to be around Fundraising etc and I suspect that is to do with how charities measure their activities.