Institute of Fundraising – South West Gift Aid 2018 Ms Phil Robson Mrs Elanor Hoskin Wednesday 2nd May 2018

Gift Aid at eighteen

Government report on Gift Aid published March 2018 The stats Government report on Gift Aid published March 2018

Has Gift Aid come of age 2000 – 2018 and beyond

£179m incorrectly claimed £600m underclaimed £179m incorrectly claimed HMG: 2017 Research - Charities missing out on £600m because people are not enabling them to claim Gift Aid on donations

Eligible Donors who don’t sign up for Gift Aid Ineligible donors who have not paid tax, but take tax from the Treasury to give to charities Gift Aid tax Gap

Overview Gift Aid – Collective industry responsibility What are the barriers to successful Gift Aid Why are charities losing £600million a year in unclaimed Gift Aid What is my charity doing about Gift Aid

How does Gift Aid breakdown Gift Aid added to 52% of the total value of donations, with charities claiming £1.16bn (2017) Proportionally, 73% of donations to online giving added Gift Aid- compared to 50% Gift Aid across other channels. Whilst Gift Aid declaration is lower for direct debits, this channel generates the highest Gift Aid value because donation values are the largest.

Non-taxpayer: Individual with a gross personal income of less than £10,600 a year (income levels change) – No Gift Aid Basic rate taxpayer: Individual with a gross personal income between £10,600 and £42,384 (inclusive) a year (income levels change) – Gift Aid for the charity Higher or additional rate taxpayer: Individual with a gross personal income of £42,385 or more a year (income levels change) Gift Aid for the charity and tax refund for donor Three tax statuses

HMG found: most effective ways public donate to charities More people donate through bucket and tin collections Most income is raised is through Direct Debits HMG found: most effective ways public donate to charities

Volume versus value In “people” numbers More people Gift Aid online either through sponsorship or direct to the charity Conversely more people donate without Gift Aid via buckets (not including GASDS) Most income not collecting Gift Aid is Direct Debits and charity envelopes containing cheques And yet we know Direct Debits generated the highest Gift Aid £ for £ Other than legacies, Committed Giving is closest bond between charity and donor

Main Barriers to Gift Aid For tax paying Donors who do not opt into the scheme They do not engage with charities beyond the donation Charities who do not know how to engage with these donors Cite confusion around the rules of who can gift aid their donation Main Barriers to Gift Aid

HMG Research: Donor Awareness Across all tax statuses Donor Awareness is high, over 80% have heard of Gift Aid However when asked if they understood Gift Aid this dropped to between 30-35% Even people who said they understood Gift Aid said their knowledge of the scheme was “good to fairly good”

Why do eligible donors not add Gift Aid “sometimes/never” It is mostly driven by a perceived lack of opportunity to add Gift Aid And by a misunderstanding of Gift Aid and not recognising their eligibility to add it. Why do eligible donors not add Gift Aid “sometimes/never”

% of Income by Source to which Gift Aid is added (2016/17)

The facts

What can charities do to increase income and mitigate risk

What is a Gift Aid Income Stream Individual Donations Sponsorships (via events) Visitor sites (Museums. Zoos etc) Membership and Friends Schemes Retail Gift Aid (High street charity shops/furniture collections) Gift Aid Small Donations Scheme (GASDS) What is a Gift Aid Income Stream

Understanding the Gift Aid Rules At least 6 different Gift Aid Income Streams Over 35 HMRC rules affect Gift Aid Each income stream has its own particular set of Gift Aid rules Charity has to know which of these rules affect particular income streams so can explain to donors Understanding the Gift Aid Rules

Why is Gift Aid confusing donors and charities Gift Aid declaration Benefits Rule Individual Donations Annual Pass 10% on entrance fee Visitors Sites People put money in a bucket No Gift Aid Declaration Form Gift Aid Small Donation Scheme Personal items donated to charity Donors own Gift Aid to point of claim Retail Gift Aid

S.W.O.T. What are our potential Gift Aid income streams Can our data and technology support a Gift Aid programme Do we understand the Gift Aid rules Can we engage effectively with donors Gift Aid

Most Common “weaknesses” and lost “opportunities” Charities unclear of the rules Ineligible donors are signing up for Gift Aid Donors sign invalid declarations Eligible Donors are not signing up Most Common “weaknesses” and lost “opportunities”

Failure to understand the “Benefits Rules” Annualising gifts against incentives - especially for Major Donors Individual Donations Exceeding the benefits participants and their connected families are allowed before invalidating Gift Aid Sponsorship Do the benefits your membership receive exceed the benefits rule Memberships Failure to understand the “Benefits Rules”

Charities need to train and educate people directly connected Head Office Shop Managers Volunteers Donors RGA

HMRC ruling on the RGA audit rules “Charities should keep records of staff/volunteer training and guidance, to demonstrate that all their staff and volunteers have a good understanding of the processes.” “records of checks the charity has carried out on each of its shops to ensure that the Retail Gift Aid process is operated correctly” HMRC ruling on the RGA audit rules

Visitor Sites – common mistakes making Gift Aid invalid No understanding of difference between the Annual pass and 10% on admissions rule Volunteers expected to deliver the Gift Aid rules with little or no knowledge as to how to explain No clear signage for and engagement with visitors to explain what Gift Aid is, and their rights to enter if they choose not to Gift Aid Visitor Sites – common mistakes making Gift Aid invalid

Common errors in what a Gift Aid Declaration is Web declarations can be written or oral but there is no “web” declaration Web Declaration Depending on your technology, most is written Gift Aid but there is no “Visitors Pass” declaration Visitors Pass Special scheme embracing both written and oral Written declaration to join, there is no “RGA Declaration” RGA Common errors in what a Gift Aid Declaration is

Different Income Stream different rules Oral/Written Visitor Sites Written RGA Web Oral Telemarketing Different Income Stream different rules

However you dress it up there are only two Declaration Types Written Oral However you dress it up there are only two Declaration Types

Top reasons charities fail Gift Aid audits Lost Gift Aid declarations Invalid Gift Aid Declarations types Incomplete Audit trail Top reasons charities fail Gift Aid audits

£Hundreds of Millions remain unclaimed each year Be honest about your own Gift Aid Knowledge. If you need training – ask Make sure your charity educate and train both donors and charities (including your volunteers!) S.W.O.T. Invest your Gift Aid resources in the best chance of a risk free return All good work on recruiting Gift Aid will be lost in poor Gift Aid management and administration £Hundreds of Millions remain unclaimed each year

Putting resources into your Gift Aid programme 5% of your Gift Aid income invested back into Gift Aid Put the Gift Aid rules into the charity, do not rely on one person to run your scheme Treat Gift Aid as any other income stream – it needs experts to run an effective scheme

Who is liable for Gift Aid at your charity Charity trustees are ultimately responsible for ensuring that all claims are correct And have an obligation to ensure that appropriate systems are in place to achieve that result This includes making sure proper training is available And making sure resources are made available Trustees Who is liable for Gift Aid at your charity

Remember Most people have heard of Gift Aid, very few people understand Gift Aid The charity need to understand the Gift Aid rules or cannot target Gift Aid donors Understand the Gift Aid rules that affect your income streams.

Venues to be announced Workshop Content To book a place please contact 19th and 20th September 2018 16th and 17th of October 2018 Venues to be announced Workshop Content To book a place please contact

Question Time!