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Gift Aid it

How JustGiving.com nudges people towards tax-efficient charitable giving

First, a declaration of interest: on Saturday I'm leaving England on a fundraising event with my family for Alzheimer's Research Trust. The trip is entirely independent and self-sufficient. We are attempting to cycle 1320km (820 miles) along the length of the river Rhine in less than 3 weeks, from Andermatt, on the Swiss side of the Swiss-Italian border, all the way along the length of the river to Rotterdam, on the North Sea.

In order to raise donations through this trip, I am using the JustGiving.com website. ResPublica is currently working on a project, sponsored by the Charities Aid Foundation, to modernise Gift Aid, a tax relief on charitable donations and applicable to gifts of money to charities by individuals who pay UK income tax. JustGiving.com has valuable lessons for this project.

In order to claim Gift Aid on a donation, a charity must obtain a Gift Aid declaration from the donor, stating that the donor is a UK taxpayer (usually in the form of a “ticked” box). Obtaining declarations can be quite tricky. There are a whole host of factors at play, from donors being unsure about what Gift Aid means and whether they are eligible to claim it through to the cost barriers faced by charities who want to contact donors and ask them to Gift Aid their donations retrospectively. But there is one big barrier to obtaining Gift Aid declarations: donor lethargy. Particularly for smaller gifts (under £10 for example), many donors do not feel that completing a Gift Aid declaration is worth their time. And for such small amounts, even when a charity receives declarations, the administrative costs of claiming Gift Aid may outweigh the additional revenue.

At this point I would like to draw attention to two specific instances of this problem that I have encountered during my attempts to fundraise. However, before I do, I would like to state how stunned I am by all the engagement and positive capacity people have for charitable causes. In my fundraising efforts to promote our modest target, I have encountered several others who are similarly raising money for exceptional causes. In the first instance, one individual, who is running for the charity Over The Wall, would have met their target but unfortunately almost half of the amount donated did not receive a Gift Aid declaration. In the second instance, a couple raising money for MacMillan Cancer Support organised an Open Garden Event. They raised an impressive £10,000. However, the vast majority of this was through cash donations of £20. Although the couple asked each guest to fill out a form, many were not completed. I have to commend the perseverance of this couple, who spent considerable amounts of time after the event contacting guests to ensure as many donations as possible received Gift Aid. But I have to ask myself whether charities could possibly have the capacity for this kind of perseverance?

I ask this because JustGiving.com is an excellent example of a system designed to overcome donor lethargy, and they achieve this simply by re-ordering the process for making a donation. As opposed to many donation forms, which feature a tick-box for Gift Aid at the bottom, the JustGiving website asks donors to tick the box immediately after they have entered the amount they would like to donate. It is the second step in the payment process, coming even before the request for credit or debit card information, which is the third step. Finally, the donor is asked to enter their name. For charities, JustGiving.com takes on all the costs of administration and charges a small percentage fee, which means that claiming Gift Aid on online donations, however small, is profitable for charities.

Contact with other people fundraising has shown me how popular a platform for donating Just Giving truly is; in every instance people directed me to their Just Giving page. At the risk of being accused of blatant self-promotion, why not see for yourself and make a donation, however small, at http://www.justgiving.com/Jonathan-West

Comments on: Gift Aid it

Gravatar Adam Schoenborn 02 July 2010
Good luck with your trip and your fundraising Jonathan, hope lots of people give!
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Detailed Summary

Date Published
01 July 2010

Categories
charities
Gift Aid

About The Authors

Jonathan West

Jonathan West was a research assistant at ResPublica from March 2010- April 2011. He graduated with a BA (Hons.) in Hist...