Charities losing out on £750 million in Gift Aid
17 November 2009
virginmoneygiving.com says 89% of its donations attract Gift Aid
Charities are losing out on as much as £750 million a year because of unclaimed Gift Aid, analysis from not-for-profit online giving service virginmoneygiving.com warns.
Good causes can benefit from 28% in tax relief on every donation if donors are UK taxpayers who fill in a Gift Aid declaration** – on an average donation of £31 that would be worth another £8.68.
But currently just 40% of donations claim Gift Aid according to the report UK Giving 2009 from the Charities Aid Foundation and the NCVO and the proportion of donors using Gift Aid is only increasing marginally year-on-year leaving around £750 million unclaimed.
Virginmoneygiving, which opened to fundraisers in October, is currently seeing Gift Aid uptake at 89% - more than double the UK average which helps deliver a significant boost to good causes.
Former Cabinet Minister David Blunkett has urged the Government to introduce an opt-out system for Gift Aid in order to dramatically increase uptake of the scheme.
However, despite being backed by the charity sector experts believe the scheme is unlikely to be introduced in next month's Pre-Budget Report.
Joanna Barnett, executive director of virginmoneygiving.com, said: “Charity funding is under severe pressure as donors cut back in the recession which makes it all the more depressing that Gift Aid is not delivering its full potential.
“More needs to be done to increase awareness of Gift Aid as it is a straightforward way to deliver extra funding to good causes across the country.
“We are delighted that we are delivering 89% uptake of Gift Aid but admit that there is no magic formula. Online giving makes it simpler to opt into Gift Aid as it minimises paperwork and form filling.”
Gift Aid usage in the year to 31 March 2009 is estimated at 40% compared with 38% in the previous year and 35% in 2006/07. Use of Gift Aid is much higher among donors giving large amounts – around 71% of donations over £100 use Gift Aid, according to UK Giving 2009.
Research by virginmoneygiving.com among charities and fundraisers shows online giving is potentially more efficient than traditional sponsorship forms and collection tins and can increase the use of Gift Aid.
virginmoneygiving.com, a not-for-profit business, which is already backed by hundreds of major charities, officially opened to all fundraisers for all charity events across the country in October.
Virgin Money has invested over £3million in the launch, using its experience as a financial services business to build the hi-tech website. Virgin Money Giving ensures card payments are processed as securely as possible and offers charities state-of-the-art reporting tools to help them maximise the efficiency of their online fundraising efforts.
virginmoneygiving.com, which is free for fundraisers, charges a flat £100 + VAT registration fee for charities and a 2% fee on all donations before Gift Aid which means for every £10 donation charities will receive £12.46.
As a not-for-profit business Virgin Money Giving charges charities the minimum fees needed to cover the running costs of the site. Any money left over after covering operating costs will go towards reducing fees further or improving services for fundraisers and charities.
virginmoneygiving.com is the official sponsorship website of the Virgin London Marathon, Royal Parks Half Marathon and Sony ‘Run to the Beat’.
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Notes to Editors
* UK Giving 2009 produced by the Charities Aid Foundation and NCVO.
For further information:-
About Virgin Money
Virgin Money is Virgin's financial services arm and was established in 1995.
Virgin Money has over two million customers and offers a wide range of financial products across lending (e.g. credit cards), savings (e.g. deposits, investments and pensions) and protection (e.g. household and car insurance) to the UK market.
For more information, please visit Virgin Money
About the Virgin London Marathon
Virgin has signed a five-year deal to be the official sponsor of the London Marathon, the biggest annual fundraising event in the world. The inaugural Virgin London Marathon is on the 25 April 2010. Virgin Money, the financial services division of the Virgin Group is leading the London Marathon sponsorship with the ambition to help runners raise £¼ billion over 5 years and will use its infrastructure, online capability and financial expertise to deliver that through Virgin Money Giving.
For more information, please visit Virgin London Marathon
Virgin Money Giving Limited, Company No. 0273 3492