Action needed to get people giving as they earn - report

31 December 2012

Concerted action is needed to encourage more people to give direct to charity through their pay packets, according to a new report.

A study of payroll giving by the Charities Aid Foundation (CAF), which promotes charitable giving and provides financial services and social finance to not-for-profit organisations found only 1.9% of the under 30s in employment give through the payroll compared with 4.5 % of employees aged between 30 and 49.

The report, which looks at trends in payroll giving over its first 25 years, argues that reforms are needed to make payroll giving schemes fit for the internet age, to harness the scheme's potential and repeat the growth of payroll giving in the late 1990s.

Under the scheme, introduced in 1987, employees can arrange for their employers to make charity donations from their gross pay before tax is deducted. For higher rate taxpayers this means £55 donated from net pay will become a £100 donation.

Last year (2011/12) £118 million was given to good causes by 735,000 people through their payroll, equivalent to 3% of employees.

Overall the numbers of people giving through the payroll nearly trebled between 1999 and 2003, boosted by Government-backed campaigns to promote payroll giving.

But the report argues a fresh drive is now needed to bring payroll giving to a new generation. Many employers do not offer staff the chance to give through the payroll.

Research published earlier this year by CAF showed that more than half of all donations now come from the over-60s, compared to just over one third of donations 30 years ago. And the over-60s are now more than twice as likely to give to charity as the under 30s.

CAF, which is Britain's largest provider of payroll giving, has launched the Growing Giving campaign to get younger people giving.

Hannah Terrey, Head of Policy and Campaigns at CAF, said: “Payroll giving has massive untapped potential to encourage people to make a regular contribution to the causes people care about.

“Many major companies and their staff take advantage of this means of giving, but we need to do so much more to encourage millions more to give. We need to recruit a new generation of employees to get into giving as they earn so they can build long term links with charities and experience the joy of supporting a cause they care about.

“There is huge potential to expand the numbers of people giving direct from their salaries. The massive increase in people signing up a decade ago shows what can be achieved.

“We need to streamline the system to make it easier for a new generation of employees to get involved and get people giving.”

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Payroll giving: the journey so far

Only 1.9% of the under 30s in employment give through the payroll compared with 4.5% of employees aged between 30 and 49.

Download our report '25 years of payroll giving'