Charities miss out on more than £500 million every year in unclaimed Gift Aid
A campaign is calling for Gift Aid to be simplified so that charities do not miss out on vital funds.
Since the coronavirus pandemic arrived in the UK, 77% of charities say that Covid is affecting their finances with a projected loss of 48% to their voluntary income, at the same time they are seeing a rise in demand for many of their services since the pandemic. More than ever charities need to ensure they are optimising every penny of their donations.
Gift Aid has boosted charitable donations made by UK taxpayers over the last 30 years but an overwhelming one-third of donations don’t have Gift Aid attached.
Each year, it’s estimated that as much as £564 million of Gift Aid is missed by UK charities due to onerous processes or confusing criteria and that this burden is even greater for small charities.
By harnessing secure payment technologies through a transformative process that is simple and safe to use, The Future of Gift Aid project instigated by The Charity Tax Group (CTG) has said it can have a real impact to those who need it most.
“The power of people coming together sharing individual expertise is something quite incredible.” said Richard Bray, vice-chairman of the CTG.
If the campaign is successful, donors would no longer have to engage with clunky administrative processes nor understand changing eligibility criteria while charities would be able to access far greater funds driving far greater benefit to more.
The Future of Gift Aid project proposes a collaborative solution that will operate within the current Gift Aid policy requirements. Streeva, a next-generation payments company, uses behaviour driven development in combination with formal modelling and agile methodologies to ensure systems perform as required, and is leading technically on the project through their revolutionary technology that already exists in the form of Swiftaid.
Beth Michael, co-founder of Streeva, said: “In this time of crisis the charity sector needs our help more than ever. I strongly believe that with industry-wide support and expertise along with the innovative enabling technology Streeva can bring, this project will make a huge difference to the sector, bringing real hope in these challenging times.
The innovation will enable the use of an individual’s tax status to determine automatically if a Gift Aid declaration is valid and completely remove the burden on the taxpayer whilst processing Gift Aid automatically across all digital donation methods.
An automated process will also remove the possibility of overclaiming, something that is estimated to cost the UK government over £180 million each year.
The Future of Gift Aid project, is supported by a number of critical stakeholders including Streeva who are pioneering automation through smarter transactions as the technical lead, as well as charity payment and fundraising experts: JustGiving, LibertyPay, fintech charity and micro-donations leader Pennies, and Retail Gift Aid solution providers, NISYST alongside mobile payments and messaging specialist: Fonix.
Cancer Research UK, The National Trust, Sue Ryder, The Children’s Society, The Association for interactive media and micropayments (AIMM) and the Charity Retail Association provide perspective from the voluntary sector.