Txt donations - the VAT dilema

For years the Institute of Fundraising and major charities have been trying to get the cost down of making donations via TXT on your mobile. One of the last major hurdles is VAT, as the mobile phone companies say they can’t distinguish between the various premium-rate lines they operate.

The HMRC (Her Majesty’s Revenue & Customs) stated 2 years ago that VAT was not chargeable on text donations, but the phone companies are charging charities an estimated £1m a year in VAT. Neither are they then returning the money in the form of a corporate donation.

However, at last the HMRC and the telephone companies have met and begun discussions on how to get round this problem. It would appear that all the phone networks are in favour of the no VAT charge, but they claim it is a very complex business and there will be no quick fixes to it.

We will have to wait and see if the phone companies follow through their words with real actions, in the meantime, try and choose a more cost effective way to donate to your favourite charities, preferably one that lets you Gift Aid your donation as well. That way, your £1 is worth £1.28 to the charity, which is better than losing 17p in unnecessary VAT!

Poor investment in legacy marketing?

According to a report in Third Sector magazine (9 Jan 08), charities are under investing in their legacy marketing. Think Tank, nfpSynergy surveyed 54 charities and found that 75% of them spent less than £200k p.a. on promoting the idea of leaving a gift in your Will to charity. These charities averaged £14m a year each in legacy income.

However, in reality, these must all be “big boys” in the charity world, as the majority of charities will be spending little or nothing on legacy marketing. With numbers like this being quoted, it simply makes small charities believe that legacy fundraising is only for those with megabucks to spend on legacy marketing.

This is sad, as it means the share of the cake will probably be disproportionate, if the big boys are getting heard and seen, whilst the small charities never get their message across.

Ironically, I believe it is the small, local charities who stand a better chance of being successful at receiving gifts in Wills, as they are (literally) more close to the hearts and minds of the people around them in their locality. These local people get to see what the charity achieves, maybe even experience their good work first hand. At the least, they may know someone who has benefited from their local charity’s endeavours.

Also, it is a myth that legacy marketing has to cost megabucks to produce. Local and regional charities can use their local knowledge and contacts to their advantage, through gifts and services in kind, sponsorship and tapping in to networks. They can also advertise their need for no cost at all, by utilising their existing communications, such as newsletters, websites and charity shops.

OK, the small fry might not average £14m a year legacy income, but I bet the ROI could be better than that of the big boys. My last charity, a local hospice, significantly increased its legacy income over 5-8 years and saw a ROI of 1:1000. Now that’s something all small charities ought to seriously consider!

If you’d like help or guidance on how to start effectively marketing legacies to your supporters, please get in touch. Contact details can be found on my “About” page of this blog.

Remember: Small is Bountiful!

Hello world!

Hello! A warm welcome to the first readers of this new Freelance Fundraiser’ s blog. Over the coming days, weeks, months…I hope to bring to your attention news from within the UK charity scene about fundraising issues, new and innovative ideas, personal comment on these things, events, resources and training opportunities.

I hope, too, that you might engage in some of these things as well, adding to the discussion or resources, etc.

With a fairly busy schedule, as well as what seems like a part time job taxi-ing a gaggle of offspring to all their diverse activities, I can’t promise to write a regular piece, but I’ll try my best!

If you’ve come across something you think would be of interest to others in the not-for-profit, charity world, please feel free to submit it to me. If it’s relevant, I’ll post it on the blog (and credit it to you).

Cheers

Graham