Over a quarter of workers express readiness to utilise payroll giving for charitable donations in the future, but the younger demographic may refrain due to a lack of understanding, according to research by the Charities Aid Foundation (CAF).
Payroll giving, known for its tax-efficient contributions, appeals particularly to younger employees who prioritize social impact. Yet, misconceptions abound; many are unaware of the option to contribute to multiple charities, continue donations post-retirement, or support unregistered charities.
CAF reports that payroll giving is offered by over 4,000 UK employers, including major corporations like Tesco and AstraZeneca. Understanding is highest among industries such as banking, insurance, real estate, and technology.
To effectively promote payroll donating, CAF suggests businesses implement payroll-giving programs and consider enhancing them with employer matching, offering flexible matching options to accommodate various budgets. Additionally, fostering a sense of community through initiatives like holiday matching campaigns can inspire collective giving. Lastly, to cultivate a culture of giving, employers should lead by example, openly discussing payroll giving, ensuring information accessibility, and publicly endorsing the practice.
RBC Brewin Dolphin charity investment manager Wolfie Papirnik says: “As someone who works in the finance industry, I believe it’s essential to use our resources to make a difference in the world. Businesses generate a significant amount of wealth, and it’s imperative that we allocate it towards promoting social good. Payroll giving offers several benefits including savings for both the employee and the charity. It’s a tax efficient way to give to charity. My employer covers the fees and matches my giving so the impact is financially more significant to the charity than the cost to myself. It’s a great incentive for me to give knowing my organisation is supporting the cause I care about.”
Barnardo’s head of payroll giving Terry Stokesg says: “Payroll giving offers a vital source of income to Barnardo’s. Our services are facing even greater demand against a backdrop of increased child poverty, so the consistent reliable income we get from payroll giving enables us to better plan where we need to allocate our resources. Importantly for charities, with the tax relief coming at point of donation, it removes the need to claim Gift Aid at a later date.”