Getting more out of payroll giving



John Copps

John Copps

Payroll giving is one of the easiest ways for people to give regularly to charity. But it is also something that a lot of countries are really bad at, particularly us Brits. In the US in 2010, 35% of the full-time workforce gave to charity through a payroll giving scheme. But in the UK in the same year, this figure was just 4% – that’s 724,000 people – raising a combined total of £106 million. Compared to some other countries, there is no doubt that we perform dismally.

A few weeks ago, UK Treasury Minister Justine Greening told the Institute of Fundraising conference in London that she is looking into improving this – one of the splurge of ideas from the UK government’s recent Giving White Paper, which sets out its plans to boost philanthropy.

Employers could do a lot to inspire their workers to give and to improve the experience of giving. Offering volunteering opportunities, asking employees to suggest charity partners, and telling them about the impact of the company’s donations could all inspire more employees to give. Matched giving schemes are also underused – knowing your donation would be doubled at no extra cost to you could be a powerful incentive to give more, or to start giving in the first place.

Undoubtedly the most urgent priority is to increase the measly rate of take-up of payroll giving, particularly in the UK, but the government is also keen to look at ‘not just the big ticket items, but the smaller areas that can make a difference’. Such small ideas are in vogue following the fashion for ‘nudging’, a concept in behavioural economics made famous by Richard Thaler’s book.

There are several small ideas that are fairly easy for companies to do, and cost next to nothing, which could boost payroll giving. Here are three small things that I think could get more people involved in philanthropy in the workplace:

1. Committing a percentage of income, rather than a fixed amount – I signed up to New Philanthropy Capital’s payroll giving scheme when I joined back in 2004, but I’m ashamed to say that although my salary has risen, my contribution hasn’t because I have never bothered to change it. Making payroll giving a percentage of my income means I would automatically be giving more today.

2. Deferring payment – I recently read an unpublished research study that showed that if you ask donors to defer their payments, they will tend to give more. This is because we all have a tendency to value our future income much less than the money already in our pockets (to use the economic jargon, we heavily discount future costs). By asking donors to defer their initial donation by a couple of months, the overall amount given might be increased.

3. Tell us what our colleagues have contributed (anonymously) – knowing that others are giving, and how much, can lead to increased donations, both in terms of people signing up for the scheme in the first place and the amount they give – the power of the peer effect.

It is difficult to say what these measures might be worth if they were implemented. But as charities worldwide are working hard to boost donations, and the UK government is beginning its campaign to increase the take-up of payroll giving, it would be wise not to ignore the small things.

John Copps is head of NPC’s Well-being measure

Tagged in: Fundraising Giving White Paper Payroll giving UK

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