For charities based in the UK with British taxpaying donors, it’s extremely important to understand how to use Gift Aid to your advantage.
Gift Aid is a tax relief scheme allowing UK charities to reclaim an extra 25% in tax on every eligible donation made by a UK taxpayer.
According to Fundraising.co.uk:
“Gift Aid is one of the greatest sources of revenue for all charities, acknowledging the fact that donors have already paid basic-rate income tax on their earnings and allowing the charity to claim back the difference. However, a large proportion of all charities aren’t claiming any Gift Aid at all.”
Not to mention, the scheme has recently evolved, meaning that even the charities currently using it aren’t taking advantage of it to it’s fullest extent.
As more charities increase their digital fundraising and crowdfunding efforts, it’s worth taking the time to truly understand how to get the most out of Gift Aid so your charity or organisation can stay competitive in the digital fundraising landscape and get more out of your existing donors.
Getting More Out Of Gift Aid
1. Understand how to use HMRC’s Charities Online
Designed to make it easier and faster to claim payments, HMRC’s Charities Online service helps charities to receive Gift Aid payment in as little as 15 working days. To process your claim, you’ll need:
Eligible software (The Donorfy CRM integrates with Gift Aid)
A spreadsheet of your donations
You can read more on using the Charities Online service here.
2. Improve your donation page
If your donation process is already a poor, confusing and bloated user experience, it’s not very likely that your potential Gift Aid donor will take the time to tick that extra box or provide extra information.
You need to ensure this experience as is smooth as possible by taking the steps to improve the donor experience on your donation page.
You can read a bit more about improving your donation page on this post we wrote earlier.
3. Process and Track
You’ll need to embed the Gift Aid declaration in your donation payment processing, and you’ll need to find a system to properly track and process Gift Aid donations.
Although is may be difficult to justify spending on technology, there are many IT and CRM suppliers available to make the entire process a breeze.
Uniquely, Donorfy automates the whole Gift Aid tax claim for you, so you can simply get on with raising more funds in the first place.
Start your 14-day free trial of Donorfy to see how it works for yourself.
4. Promote Gift Aid Properly
Are you properly promoting Gift Aid on your website, your newsletters and your social media channels?
Make an appeal to your donors and your audience to help you make their donations go even further. Promote this and explain it across your channels, providing them with the emotional plea necessary, because sometimes, all you have to do is ask.
A call-to-action is always going to be more successful than not requesting action at all. Once your donor pool understands that you’re specifically asking for donors to claim Gift Aid, they’ll be more likely to take the time to help you and give that extra bit of information.
5. Train staff and volunteers on Gift Aid
The best way to make sure that your staff is clued up on how to integrate and claim Gift Aid is to train them. It helps to nominate one person who is overall responsible for Gift Aid, as well as training any staff or volunteers to understand who is eligible.
The Museums Association suggests the following:
“Ensure that any staff or volunteers who will be accepting donations fully understand the rules: who is eligible to make a donation and what their Gift Aid declaration should contain. This is very important in case of an HMRC audit; declarations found to be invalid must be repaid with interest”
6. Keep abreast of Gift Aid changes
In 2016, HMRC made changes to Gift Aid to ensure that only eligible UK taxpayers were able to take part - meaning the charities have to be doubly sure that their declarations are complete and free from error or fraudulent Gift Aid claims from non-eligible donors.
Assign your Gift Aid lead the task of keeping on top of changes as the scheme evolves each tax year. (The HMRC guidance is a good place to start).
Don’t forget - Donorfy automatically reclaims your Gift Aid for you, so you don’t have to fill out any forms. Start your 14-day free trial of Donorfy to see how it works for yourself.
Want to learn more? Read about our 2016 Civil Society win, where we were voted BEST Charity CRM for functionality, cost, integration and more.