New Gift Aid wording suggestion

Following the Government’s decision to allow charities to continue benefiting from Gift Aid at the pre-tax cut rate of 22p in the £1, the Institute of Fundraising, after consultation with the HMRC, has come up with the following text to go on all Gift Aid declarations:

“If you Gift-Aid your donation, ‘x charity’ will continue to receive an additional 28p. ‘X charity’ can claim Gift Aid tax relief of 25p on every pound you give. HM Revenue & Customs will also be operating transitional provisions for Gift Aid donations made from 6 April 2008 until 5 April 2011, paying a Government supplement of 3p on every pound you give.”

For any charities that had already reprinted their Gift Aid and other donation literature to take into account the new reduction in income tax rate, the HMRC have said it will be OK to continue using these, until existing supplies need to be replaced. There is no requirement to either shred or reprint any materials, which would only be a wasted cost to those charities.

It is important that all charities, no matter how large or small, should continue to make best use of this opportunity to continue to promote the use of Gift Aid and try to increase the % of donors taking advantage of if. In this way, they will lessen the impact of the reduction in income when the 3 year special provision comes to an end.

For more information about Gift Aid and how to make the most of it, check out the Institute of Fundraising’s special briefings at: www.tax-effective-giving.org.uk/downloads.html

The Chancellor did giveth…but it still cost many charities!

Following on from my previous blog about the reduction in Gift Aid from 28p to 25p for every £1 donated, the Chancellor, Alistair Darling (don’t you love that name?) made a surprise move in his recent Budget. The rate of Gift Aid, which was based on income tax at a rate of 22p in the £1, is not going to change for charities for the next three financial years, as a way to lessen the blow to income when the tax rate falls to 20p in the £1.

He also announced some tweaking of the system to make it easier for charities to collect and claim their Gift Aid. However, he failed to go along with the majority opinion, which was to change radically the way that Gift Aid is calculated, from the current system based on individuals having to declare they want the charities to claim the Gift Aid, to a system where it is given by the HMRC based on the proportion of a charity’s donors who are tax payers. This would have greatly reduced the time and money it costs charities to administrate Gift Aid. Still, I suppose we mustn’t grumble!

The thing that has really annoyed so many charities, is that there was no warning that he was going to keep Gift Aid at the same level for another 3 years. As a result, hundreds of charities have been getting all their donation literature re-printed, at considerable cost to some organisations, in line with the lower Gift Aid rate we were due to move to. Now they have piles of unusable literature, because the facts and figures are incorrect.

Sometimes a surprise can backfire and in this case I doubt the Chancellor will be offering to compensate the waste of time and materials his unexpected announcement has caused.

Goodbye Nokia!

When a donor gives to charity, they are doing so voluntarily. It is their choice to do so, no one can make them. (Convincing them to give is very different from forcing them!) So it is the fundraiser’s duty to make sure that the service the donor receives is second to none.

 

This doesn’t mean wasting cash whilst pampering donors with questionable small gifts, such as badges, or sending a series of letters and cards telling them how wonderful they are! They will soon see through this and wonder why you are spending their donation on them, rather than the people they intended it to be spent on through your charity’s services.

 

There are a few key points that should be stuck to at any cost:

 

1. ALWAYS thank the donor, no matter how large or little the donation. The £2 from old Mrs Pickles might be worth more in real terms to her than the £200 from Colonel Farquhar-Splatt. Anyway, Mrs Pickles lives alone in the council house her late husband bought under that woman Prime Minister’s initiative, whereas Col Farquhar-Splatt has a large family of sons, daughters, grandchildren and great grandchildren, as well as a wife who likes polo matches and being seen at society events. Who do think would really appreciate a letter or card of sincere thanks and who do you think might be more likely to leave you a significant gift in their Will?
2. ALWAYS make sure you say “thank you” promptly. A couple of weeks later is too late. Make it your policy to always send your thanks within 5 working days. The sooner the better! Mrs Pickles and Colonel Farquhar-Splatt will both appreciate your promptness.
3. ALWAYS be courteous and polite when dealing with the occasional time a donor gets upset. It’s better to acknowledge fault than to try and justify it, even if you know you are in the right! Be a calming influence, not an agitator when a complaint arrives, be it by post or telephone, etc.
4. ALWAYS try and go the extra mile. Don’t just do the minimum of what the donor would expect, go beyond. They will notice and you might turn a potential enemy into a generous friend.

 

We would do well to learn from our commercial neighbours. Companies noted for excellent customer service are far more likely to get repeat custom from people. Those who don’t…beware! Let me give you an example of poor customer service, that has blighted a previously favoured company for me:

 

A couple of years ago I bought a wireless Bluetooth earpiece from Nokia. It wasn’t cheap. I’ve had several Nokia phones in the past and always found them to be reliable. The earpiece came with a removable rubber-coated wire that you mold round your ear to hold the device in place. After 18 months the wire inside the rubber broke, just from normal wear and tear. Several enquiries in shops failed to find a replacement part. I looked on the Nokia website. Nothing was there about replacement parts. I found their customer service pages and an email form to complete, which I duly did and sent it off.

 

A couple of weeks later, too long in my opinion, an email arrived back. It said that I needed to take it to certain branches of a national mobile phone retailer, whose larger branches acted as agents for repairs of Nokia equipment. My nearest one was 30 miles away. So I took an afternoon out and drove there, only to be told that they provided no service for these Bluetooth devices!

 

So I wrote to their CEO at the UK head office, explaining politely what had happened, that I liked Nokia’s equipment and asked if it would be possible to replace the part (estimated cost £1 - £2). I suggested that as their own customer services had led me on a 60 mile wild goose chase, taking an afternoon out from work, they might consider sending me the part for free.

 

A month later, I wrote again, after not receiving a reply. I was less complementary this time, saying that it was very poor customer service and I would be unlikely to use their products again if they couldn’t meet such a simple request.

 

A week later a letter arrived saying that these devices are sold as a unit and as it was outside the warranty period, they could not offer free repairs. Goodbye Nokia!

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!