Payroll giving is a unique form of fundraising; it enables charities to raise income which keeps coming in long after the fundraising activity has ended. The funding raised can; be used for ‘core’ or project funding, can generate new donors, raise the charity’s profile, make new friends and supporters and it can give you opportunities to promote your charity’s services to a new audience whether you are a local, regional or national charity.
Definition:
“a means by which employees may contribute to charity through their employer’s payroll”
It is as simple as this, the only addition to the mechanism is that the donations are administered by outside agencies called Payroll Giving Agencies. WCVA operates a Payroll Giving scheme without charge for employers in Wales.
The main benefits of Payroll Giving are that:
- It provides a regular, reliable unrestricted source of income
- Donors receive immediate tax relief
- It is easy to set up and donations often continue for many years , until employment ceases
Snow ball effect
Payroll gifts are continuous; building weekly, monthly and annually, year after year. The average monthly gift is £8.00 per donor and is likely to continue until the employee leaves the employer.
Fundraising for Payroll Giving offers a unique opportunity for charity’s and employers to work together for the long term, to mutual benefit at a minimal cost. Additionally, a good relationship between charities and employers can lead to further benefits for both parties concerned. Payroll Giving can be an initial step which leads to:
- Building relationships with employers
- Further fundraising support from employees
- Other non financial benefits, such as volunteering, PR, raffle prizes etc
Where to start?
The most effective form of payroll fundraising, as with any form of fundraising, is via face-to-face workplace promotions, this involves gaining an employer’s permission to approach employees at their place of work. Once access has been gained, this provides the fundraiser with an excellent opportunity to ask the employer to become the charity’s ‘corporate friend’. Do not forget the smaller employers! As the best way to recruit new donors is to talk to them personally, smaller organisations with less staff often allows the fundraiser to build a stronger rapport with staff.
Once a relationship has been developed with employers and employees alike, the fundraiser should look at developing a long term relationship. The company should be visited regularly to promote the charity to new employees, to thank existing supporters and to provide updates on the service offered by the cause. Employers easily forget about the scheme as the process is continuous without maintenance, it is therefore important that charities remind employers to refresh the internal promotion of the scheme; every 18 months or so.
Payroll fundraising is about long term relationships and long term support; when maintained effectively, these relationships can lead to:
- Employer’s and employees’ ongoing support and loyalty
- The probability of improving/ increasing support in the future
- Recommendations to other contacts, companies or branches
- Offers support to other fundraising activities
- Corporate/ business contributions, raffle prizes, stalls at company fetes etc
How does the pre-tax scheme work?
The pre-tax or tax free scheme involves a contractual agreement between an employer and a Payroll Giving Agency (e.g Payroll Giving Wales). Employees subsequently contribute from their gross pay to any charity of their choice, before tax is deducted. The employer is expected to forward the total monthly contributions to the Payroll Giving Agency which then distributes the donations to the employees’ specified charity within a specified time frame.
There are Professional Fundraising Organisations (PFO’s) operating nationally who can be contracted to promote your charity on a cost-per donor basis, for more information see www.apgpfo.org/.
Payroll Giving Consortia
A number of localised charity consortia have been developed specifically to benefit from Payroll Giving donations and other forms of support from local businesses.
A charity consortia is a group of charities working together for a joint venture. This method of fundraising can be beneficial as is allows the individual charities to:
- Share resources of time and money
- Combine contacts from local businesses and public sector
- Offer a more broad appeal to donors - e.g each donation made could benefit up to 5 charities
For an example of a charity consortia visit:
www.swanseacharitypartnership.org.uk
How can WCVA help?
The Giving Wales project can offer help and and advice answering any queries that you may have.
You can download toolkits which will help you with your fundraising strategies.
Payroll Giving Wales offers a free service for any employers in Wales offering Payroll Giving to their staff, this reduces the barrier which fundriaisers can face due to the administration charge that all payroll giving agencies charge. The agency is responsible for all of the administration on your behalf, you receive the monthly gifts via BACS or cheque.