Payroll giving allows UK tax payers to donate to charities straight from their wages or pension on a tax-free basis. Payroll giving agencies then collect donations and pay out the money to charities.
The memorandum of understanding, signed by Priti Patel MP, Exchequer Secretary to the Treasury, Peter Lewis, Chief Executive of the Institute of Fundraising, and a number of payroll giving agencies, aims to increase transparency and clarity in information sharing between the government, charities and payroll giving agencies, so charities improve their payroll giving programmes and ultimately increase donations.
The memorandum includes an agreement to work towards a standardised disbursement report provided by payroll giving agencies to charities.
Currently, charities can receive reports from multiple agencies in different formats. As part of the memorandum, agencies will now start standardising their formats towards an agreed template to reduce the administration costs for charities and increase clarity.
The memorandum also includes a commitment to help charities find out the most successful avenues for recruiting donors. Payroll giving agencies will submit their donation figures to a database via an online portal. The data will then be collated and presented into a report, which will be available online.
Chief Executive of the Institute of Fundraising, Peter Lewis, welcomed the memorandum of understanding: “Our members have been consistent in their belief that more and better data and transparency in the payroll giving system is needed so that charities and fundraisers are able to grow payroll giving income across the UK.
“I’m particularly pleased that this MoU has come about through consultation and engagement with payroll giving agencies and charities talking together and agreeing the terms of the document and the standardised reporting mechanisms.
“Payroll giving is dependent not only on the generosity of employees and the commitment of employers, but also on the successful relationship between charities and payroll giving agencies. This MoU will help to standardise that relationship and give everyone a greater depth of information on what’s happening with payroll giving which will allow charities to better plan fundraising campaigns to grow this important source of voluntary income.”