Gift Aid – let’s fix the model

In today’s world, where every penny can make a significant difference, charities are losing out on millions of pounds due to the very processes set up to help them make gift aid claims. Administrative burdens and data privacy concerns associated with gift aid have particularly affected micro donations, an innovative method of giving that has the potential to channel substantial funds to charitable causes.

The Power of Payroll Micro Donations

Microhive, a fundraising company driving micro-giving across the UK, is at the forefront of this issue. One-way Microhive is raising money for charity, is through payslip micro-giving which allows employees to round down their monthly pay to the nearest pound, donating the pennies to charity. While each donation is under 99 pence, the collective contributions from entire companies can be significant. To date Microhive has raised £8m for over 800 charities, proving the power of giving small.

Understanding Gift Aid and Its Challenges

Gift aid is a valuable scheme for charities, allowing them to reclaim 25p for every £1 donated by UK taxpayers. To claim the additional funds, charities must submit to HMRC details about the individual donors and their consent for gift aid to be claimed. This donor information is shared by the employers (name, address, donation, consent to gift aid). This requirement presents two blockages in the gift aid claim process; employers are cautious to share employers personal data (despite employees providing consent for this when joining Microhive) and the charities face heavy data input to access a relatively small gift aid claim.

The Impact

Employers are not releasing the gift aid data, and when they do, the cost to the charities to submit the gift aid forms to HRMC is greater than the value of the claim. Microhive estimates only 5% of its donations have been reclaimed as Gift Aid; a potential £1.9 million loss in funding. This shortfall highlights the urgent need for reforms in the Gift Aid processes.

Call for Reform

Kate Frost, CEO of Microhive, is spearheading the call for change. “Every penny counts when it comes to making a difference in our communities,” she says. By advocating for reforms to the Gift Aid claim process, Frost believes that greater opportunities for charities to receive much-needed funding can be unlocked.

A Vision for the Future

Frost emphasises the need for modernising the Gift Aid process to unleash the full potential of payroll micro donations. “At Microhive, we believe that change can be achieved one penny at a time, and even the smallest contributions can make a significant impact,” she asserts. Frost is committed to working with government officials to implement small yet impactful changes that could significantly enhance the efficacy of micro donations.

Microhive’s Mission

Founded in 1999 as Pennies from Heaven and rebranded under Frost’s leadership in 2024, Microhive has facilitated millions of pounds in donations to over 800 charities across the UK and Ireland. The organisation is dedicated to unlocking the power of charitable giving through micro donations, harnessing the collective power of businesses and individuals to drive positive social change. Notably, the NHS has been a long-standing participant in Microhive’s micro-giving scheme, raising over £1.6 million for NHS charities.

In conclusion, reforming the gift aid process is not just about alleviating administrative burdens; it’s about enabling charities to receive the full benefits of the generous donations made by individuals and companies. By simplifying these processes, we can ensure that more funds reach those in need, driving meaningful change in our communities.