The Disappointment of Payroll Giving

Tom’s latest article for Progress Online: despite raising a billion pounds for charity Payroll Giving underachieves


It’s Jubilee Year! Yes, 25 years since the instigation of payroll giving, that remarkable means by which you can donate to charity from your earnings and not pay tax on that sum.    In that time Britain’s employees have contributed £1.2 billion to charities of their choice… which represents a huge missed opportunity.

Payroll Giving currently raises just over £100 million each year, a figure that has remained fairly constant for some time. The British are big givers; those on middle and lower income more so, as a proportion of their income. That payroll giving has never really ‘taken off’ is a missed opportunity for charities and employers alike. Just four in every hundred employees focus their giving in this way, compared to 35 in USA. Payroll giving is cheaper to the employee than dropping coins in a tin and charities like the reliability and regularity of this form of modest giving.

In the giving world, organisations can achieve a bronze award from the Institute for Fundraising if just one per cent of their employees gives in this way; a silver award recognises 5 per cent and a gold is for ten. 3,000 out of a million employers in this country reach those giddy heights and precious few reach 20 per cent; Royal Mail is one of the highest, on 26 per cent. Some, like the much maligned RBS group, match their employees’ contributions to double the first £100 raised each month. Is that not a great way of building a rapport with employees and increasing their engagement, loyalty and, by that means, productivity?

Payroll giving provides a reason for communicating with employees on non-work-related issues. Contrary to what some believe, the employer cannot dictate (and need not even know) which charity an employee is supporting but where a mission driven partnership between a corporate and a particular charity exists, why not promote it like this?

So why has payroll giving not really taken off? Employers and employees don’t know about it. Some say it’s highly bureaucratic and technical (it isn’t). Direct debit gives the giver more control, perhaps, but there’s something about doing stuff together that makes payroll giving attractive.

Privacy rules currently make it difficult if not impossible for charities that benefit from payroll giving to say ‘thank you’ to donors or to let them know what difference their giving has made. That needs to change. Employers should be encouraged to promote engagement in small scale philanthropy and charities should encourage supporters to insist on being allowed to give in this way.

Is payroll giving something your boss makes available? How many staff take up the offer? Do you?

Part of a sustainable and healthy economy of the future must be greater involvement of the private sector in communities and benevolence generally. This is a small step in that direction.

A recent award for the payroll giving champion of the year went to the Police Service of Northern Ireland. There, half of all new recruits were signed up to payroll giving for their chosen charity. It’s a start. But after 25 years we can and should do better.