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Charities missing out as number of employees donating via Payroll Giving declines

30 April 2024

Charities missing out as number of employees donating via Payroll Giving declines

59% of people have not heard of Payroll Giving, which allows employees to donate to charity via their salary before tax

Hard-pressed charities are missing out on much-needed income as fewer employees donate through Payroll Giving, research by the Charities Aid Foundation (CAF) has found. 

Since its launch in 1987, Payroll Giving has been through periods of rapid growth, particularly in the late 1990s. But the total amount donated to charities via the scheme fell 7% year on year from £137 million in 2021 to £128 million in 2022, the most recent year for which data is available.

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Indeed, the latest data shows the number of employees using Payroll Giving has fallen by 13% since 2020 to just 516,000 employees. Meanwhile, there are currently 30 million people on PAYE who could be eligible to give through Payroll Giving.  

Employers have the option to provide staff with a Payroll Giving scheme, also known as Give As You Earn, which works in a similar way to salary sacrifice by providing employees with a simple and tax-efficient way to make regular donations to charities. 

Despite the benefits for a responsible business, fewer employers are now offering Payroll Giving to their staff. Only around 4,000 organisations currently provide this valuable benefit, including the likes of Tesco, AstraZeneca and government departments. 

However, there are clear opportunities to turn this downward trend around. Polling commissioned by CAF shows that 59% of people have not heard of Payroll Giving, pointing to a need to increase knowledge and understanding among the general public.

CAF’s research also shows the opportunity is greatest among the millennial generation of employees and jobseekers who increasingly want to work for a company with a social purpose. Younger employees are the most likely to say they would use a Payroll Giving scheme (36% of 16–34-year-olds). Although affordability can be seen as a barrier to giving, employers can also take steps to encourage take-up such as making it easy to opt in and out, and matching donations.

Neil Heslop OBE, Chief Executive, Charities Aid Foundation said:

“It’s concerning that the number of employers and employees taking advantage of this valuable benefit is declining. It provides an incredibly powerful platform for companies to support their giving in the workplace and can be a lifeline for charities at a time when their incomes are squeezed.

“That’s why we would like to see a renewed and joined-up focus on promoting Payroll Giving from providers, employers and the Government. For individuals who can afford to give, it’s a simple way to donate regularly or even on an ad-hoc basis to causes that matter to you.”

Terry Stokes, Head of Payroll Giving, Barnardo’s said: 

“Payroll Giving offers a vital source of income to Barnardo’s. Our services are facing even greater demand against a backdrop of increased child poverty, so the consistent reliable income we get from payroll giving enables us to better plan where we need to allocate our resources. Importantly for charities, with the tax relief coming at point of donation, it removes the need to claim Gift Aid at a later date.” 

Notes to editors

  • CAF is grateful to Charities Trust and Charitable Giving for their permission to use data for this report and to the Payroll Giving Monitoring Services (PGMS) UK for collating this data, representing members of the Association of Payroll Giving Organisations (APGO). 

  • Polling on attitudes comes from our UK Giving survey, run by YouGov. CAF has run the UK Giving survey in its current form since 2016. The survey is conducted online and collects responses from around a thousand people each month. The sample is constructed in such a way that it is nationally representative of the UK in terms of respondents’ sex, age, region/nation and social grade. All figures, unless otherwise stated, are from YouGov Plc. The survey was carried out online and the figures have been weighted and are representative of all UK adults (aged 16+). 

  • Additional data in this report is publicly available data from His Majesty’s Revenue and Customs (HMRC) and the Office for National Statistics (ONS).

About Charities Aid Foundation (CAF)

In 2024, Charities Aid Foundation marks 100 years as an organisation at the centre of the giving world. In a century, we have grown to become a leading charity that exists to accelerate progress in society towards a fair and sustainable future for all, distributing over £1 billion to charities around the world last year. CAF uses its unique position to bring charities, business, and philanthropists together to simplify how people give, allowing charities to focus more on the great work they do. 

CAF is the UK’s largest Payroll Giving agency. Over 100,000 UK employees donated £60 million via its Give As You Earn (GAYE) scheme last year, with individual donations ranging from £1-£15,000 per month. The highest one-off donation through a scheme with CAF was £750,000. 

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For more information or to arrange interviews, please contact media@cafonline.org