Gift Aid: A guide for charities

Who is this guide for?

What is Gift Aid and why is it important?

How Gift Aid works

How to make a Gift Aid claim

Claiming Gift Aid is relatively simple, once you've got a system in place for gathering the key information HMRC requires.

If you've never submitted a Gift Aid claim before, it's important to do these things first:

1. Ensure your organisation is registered with HMRC as a Charity or CASC 
2. Decide how you're going to ask for donor information and collate it safely
3. Decide how often you'll be able to make submissions.

When you're ready to make a claim, go to the HMRC portal to upload your donor information for validation and successful Gift Aid claim.

More Info:

  [Article] Using a Donation Station for Gift Aid

[Form] Example Gift Aid report from GWD

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Opportunities and Benefits of Gift Aid

It's worth reminding ourselves what drives people to donate to causes in the first place, because using Gift Aid is so intrinsically tied to the psychology of fundraising.

Gift Aid is an opportunity to gain more, for your community, charity or faith group.

Engaging Hearts and Minds

Research on charitable giving, has indicated supporters are often ruled by hearts over their heads, giving more to charities who show the tangible impact of their work on just one person in need. We connect more easily with this idea, and are more attracted than through seeing statistics.

But what about those statistics?

Gift Aid can increase fundraising income by 25%, when all requirements are met.

So how do we encourage more people to sign the declaration, and help meet those fundraising targets?

Reduce the barriers

• Talk to your finance team about reducing paperwork, and moving to digital accountancy systems if they're not already in use, to reduce time and risks
• Adding a digital donation device such as the Donation Station that takes the place of cash envelopes, and paper-based accounting methods can be the first step you make.
  

Share the Good News

Any new device, or online donation service you add should provide a good return on your investment, but success will be dependent on how its communicated.

Share the news, to encourage more supporters to Gift Aid their donations.

5 Tips for integrating Gift Aid into Fundraising   Let people know what's going on, and what Gift Aid can do for your cause. It's worth sharing this outside the fundraising team, as anyone can tell your story and pass on the message.   Brief the volunteers, and fundraising teams at your site, or before each event you'll be collecting funds at.   Give them a demonstration on a device or online, so they are confident they can help guests or visitors.   Signpost your devices so it's clear where donations can be made, and at what point in the donation journey Gift Aid can be collected.   Add strong messaging that creates an emotional connection with your supporters.

When designing the messaging you use to connect supporters and your cause, also think about including how making a Gift Aid declaration will help even more.

Tax Relief for Higher Earners

Another benefit of Gift Aid is the additional tax relief supporters can gain from their donations.

If your supporter groups feature higher rate taxpayers, they can obtain relief for the donation on their tax return, increasing their basic rate band by the gross charitable donation, therefore boosting the proportion of their income taxed at lower rates.

It could be worth highlighting this opportunity within your supporter newsletters, or adding a note to your next a targeted email campaign, using marketing segmentation tools.

However, we aren't tax experts, so it's a good idea to consult a financial adviser to confirm the exact guidance.

Read more:

  [Article] Charity Tax Group's Gift Aid advice for Tax Payers

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Tools for Gift Aid fundraising

What tools help capture Gift Aid submissions?

There are a number of ways to optimise your organisation to collect Gift Aid. Tools such as digital donation stations, or online declarations are our favourites, as they're designed to speed up your admin and reduce risks by handling data safely.

Here's an overview of how they work:

  Donation Devices - integrating the Gift Aid declaration within a donation journey is probably the best way to convert a donor to make a submission. The Donation Station by GWD makes it clear how much a person's donation will be boosted by in pounds and pence, and ask them for their details simply and quickly.

  Declaration Forms - online forms are needed to legally make a Gift Aid declaration when donating money via websites. And paper versions are still needed in some situations, and are a simple tick box alongside inputting contact details (whilst we advocate strongly for digital fundraising it's important for the inclusivity of any social organisation and its services that cash collections are available where needed).

  Entry Tickets - some charitable venues can add the 25% value of Gift Aid as an additional fee onto the price of entrance, so once again a declaration and contact details are needed at point of purchase.

Creating your Strategy

When deciding how to add Gift Aid to your fundraising activities, it can be helpful to view it through the lens of your audience and the typical donor that your charity wants to attract, as well as the fundraising strategy of your organisation.

Who is your audience, and what are their interests?

You may have already identified your charity supporter and their usual supporter journey from discovery to legacy. But if not, there are some handy guides on identifying your supporter's 'persona' in order to gain focus on their interests and beliefs.

When you know your audience's habits, it can help you work out the right communication channels, find the events they'll be at and even adopt language that will connect best.

Sounds strategic doesn't it?

The methodology comes from commercial marketing, and works equally for charities and social groups that rely on building good supporter relationships. The primary benefit of knowing your supporter personas is they allow you to target your audience with content and information (like specific causes and campaigns) that's more likely to reach their hearts and minds.

Read more:

  [Article] How to use Personas for Digital Fundraising by Charity Digital

  [Info] Using the Causes feature in Getting the most from your Donation Station 

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How to choose the right tools for your organisation

As fundraising strategies differ, so can your approach to digital fundraising.

Whether you're aiming at building supporters through philanthropy, or more engaged with community-based fundraising, it will be important to choose the right tools that will reach your supporters and grow your subscribers.

It's important to consider what your organisation is most focussed on, when choosing the right fundraising channels and devices, and how you want to capture Gift Aid.

We've written more generally on how to use digital devices to support your digital fundraising strategy but when it comes specifically to Gift Aid, consider the following questions:

  What is your budget allocation to digital fundraising tools?

  What return on my investment do I want to see, from any new tool?

  How does the tool capture Gift Aid, and what data does it give me?

  Can I use the data to improve my fundraising initiatives?

Measuring and Managing your data

When it comes to data, we know how helpful it can be to delve into supporter behaviours, and see when and where, and how much is donated. Plus, when you can see who makes a Gift Aid donation, and who doesn't it can be further beneficial.

There are a few key points to think about when working with Gift Aid data:

Managing data

Where is the data held and how will it integrate with existing data management?
Also, how do I ensure it's captured safely in line with GDPR rules?

As HMRC requirements state, the contact details of each Gift Aid submission should be taken at point of payment or donation. So, taking this information safely is important to avoid data loss. Reduce your risks by using secure databases, following best practice IT management, and when paperwork is involved, keeping any  of this securely filed with accounts, or treasury individuals.

Any digital donation device should manage your data safely too, and avoid storing it on the device permanently, to avoid the risk of data theft.

Analysis and Optimisation

Making the most of your Gift Aid data is probably one of the biggest opportunities for charities when it comes to implement new digital fundraising activities.  Through analysing activities it should be possible to optimise a digital donation device, tweak messages and the user journey to gain more revenue.

For instance, our Donation Stations have a customer portal, where you can download reports based on the enabled features, from Gift Aid to Marketing Email subscriptions, or a 'Remember My Card'  feature, that will recall contact and payment details of a regular giver.

Read more:

  [Article] Getting the most from your Donation Station

Refine your approach

Consider testing your strategy for a given timeframe (maybe 3 months) to see if these additional features and revenue building opportunities make a difference.

Ask your provider to switch on any features on your device for a few months, and then off for the same timeframe, with the same approach on any online donation portals.

After this, review the results to see what difference these make.

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