Would a Gift Aid ‘Allowance’ Encourage Giving?

Research consultancy nfpSynergy has released a paper which looks at how the Gift Aid system can be improved in order to generate more income for charities. It suggests that if people knew that a tax break would automatically be added to their donations, giving would be encouraged.  This would involve assigning an annual sum of money to every person over the age of 16 from which donations would be treated as tax-effective.

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The Problems with Gift Aid

The report outlines the current issues with the way Gift Aid works. This includes rising tax thresholds, bureaucracy and the fact that invalid Gift Aid payments are reclaimed from the donor, discouraging donors from ticking the Gift Aid box. These factors can contribute in making things difficult for charities and even reduce the amount of donations being made in the first place.

The Solution

The report presents a number of solutions for the issue, including a Gift Aid allowance for every adult. nfpSynergy names Scotland as an example where income tax is devolved to the Scottish Government.

The ideas set out in the report are certainly interesting. Looking at the way in which people give in the 21st century, the report also suggests that the way Gift Aid currently works doesn’t address the change in technology or donors’ attitudes. Perhaps the introduction of a new system, such as the suggestion offered by nfpSynergy, would help to encourage more donations, as well as allow charities to see an increase in their Gift Aid revenue.

Our charity EPoS system includes a Gift Aid on Rags (GAoR) solution which ensures that charities are able to capture Gift Aid on items marked as rag. Our efficient system is simple to use and can make sure that you make the most of any donations you receive.

If you would like to find out more about our charity EPoS system and how it works, please don’t hesitate to get in touch with a member of our friendly team. You can call us on 01204 706 000 or simply fill out our online contact form to request a call back or book a demonstration.

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