Donations

Benefit levels:

Donation Amount Maximum Value of Benefits

£1 - £100 25% of donation

£100 - £1,000 £25

£1,000 - £10,000 5% of donation

£10,000 + £500

Tax Efficient Giving

• Gift Aid

• Payroll Giving

• Gift of Shares

Gift Aid

The opportunity to reclaim the basic

income tax already paid on a

donation

• The money must be given by an individual

• The money must be given as a donation

• Donation can be of any size

• The donor has to be a UK tax payer

• A Gift Aid declaration has to be made (written or

oral)

• The donor can reclaim any higher rate tax paid

Gift Aid

Gift Aid

AmountDonation= X

Basic Rate of Tax

-------------------------

100 - Basic Rate

100 - Basic Rate

Basic Rate of Tax

Donation

Gift Aid - Charity

£60=20

-------------------------

100 – 20 (=80)

Gift Aid

Amount= X -------------------------£15.00

Changes made in the Basic rate of

tax…

So the Government introduced…

Transitional Relief

You apply for Gift Aid using the usual

calculation and they will then add an

additional 3.2% to any donation made

during the next 3 years.

You can talk about Gift Aid with or

without Transitional Relief.

Gift Aid Declaration

• Full name and address

• Charity‟s legal name and number

• Nature of the gift (single or on-

going)

• Permission to use gift aid

• Note stating that the Donor must

have paid sufficient income tax to

cover gift aid

Gift Aid – Higher Rate Tax Payer

Gift Aid

AmountDonation= X

Higher Rate of Tax –

Lower rate tax

-------------------------

100 - Basic Rate

Gift Aid - Charity

£15.00 £60= X20

-------------------------

100 – 20 (=80)

Gift Aid – Higher Rate Tax Payer

£15.00 = £60 X40-20 (=20)

-------------------------

100 – 20 (=80)

So….

a £60 donation

is worth

£76.92 to the charity

And costs a higher rate

tax payer

£45.00

11

Corporate Gift Aid

Sales

Costs

Income

Tax (28%)

Profit

Normal

£ ‘000

1,000

-600

400

-112

288

Sponsorship

£ ‘000

1,000

-600

Sponsorship -100

300

-84

216

Effective Cost 72

Donation

£ ‘000

1,000

-600

400

-112

Donation -100

188

Gift Aid +28

216

Tax Efficient Giving

• Gift Aid

• Payroll Giving

• Gift of Shares

Payroll Giving

Regular donations made from pay

before PAYE is deducted.

• The money must be given by an individual

• The money must be given as a donation

• Donation can be of any size

• The donor has to be a UK tax payer

• The Government added a further 10% to the

donation (stopped April 04)

Payroll Giving

Payroll Giving Agency (PGA)

• Collect and distribute donations.

• Approved and monitored by the Inland Revenue

• Can help to promote Payroll Giving in the

workplace

Payroll Giving Agencies• Charities Aid Foundation

• Charities Trust

• The Charity Service Ltd

• The Embassy of Man Payroll Giving Agency

• KKL Payroll Giving Agency - (JNF Charitable Trust)

• Northern Ireland Council for Voluntary Action

• Scottish Council for Voluntary Organisations

• South West Charitable Giving - (Federation of Master Builders (South West Region) Charity Fund Ltd)

• Sovereign Payroll Giving - (Stewardship)

• United Way Payroll Giving Service

• Working for good

Approved Payroll Giving Agencies for particular business sectors:

• BEN - Motor and Allied Trades Benevolent Fund

• Achisomoch Aid Company

Payroll Giving

Professional Fundraising

Organisations (PFO)

• Promote and recruit new donors for various

charities

• A commercial organisation, in some cases owned

by charities

• Paid a fee by the charities if support is generated.

• Can work with the charity on developing a

campaign.

• Most PFOs belong to the Association of

Professional Fundraising Organisations

(APGPFO) that regulates their conduct.

PFOs• Charity Link

• Ease2Give

• Hands on Helping Charity

• Happy 2 Give

• Payroll Giving in Action

• Revenue Share UK

• Sharing the Caring

• Workplace Giving UK

Payroll Giving• Employer offers / Staff ask for payroll giving

Employer engages PGA

Promoted to staff (internally or by PFO)

Staff sign up

Employer deducts donations

Donations sent to the PGA

• PGA distributes donations to charities (- % for

PGA and PFO)

Tax Efficient Giving• Gift Aid

• Payroll Giving

• Gift of Shares

Gift of Shares

The most efficient way to give to a

charity

• Full income relief

• No Capital Gains Tax

Gift of Shares

Shares bought for £2,500

Today‟s worth £10,000

Income from selling

Sale £10,000

Less Capital Gains Tax (18% of £7,500) -£1,350

Cash gift to charity £8,650

Value to charity (inc Gift Aid) £11,089

Final cost to donor (inc Gift Aid) £7,837

Gift of Shares

Value to charity £10,000

Final cost to donor (tax relief 40% of £10k) £6,000

Propensity to Give

Extrinsic Factors

Age, Gender, Social Class

Intrinsic Factors

Self Esteem, Guilt, Empathy

Perceptual Reaction

Fit with self, portrayal

The Ask

Past experience, stimulus

Propensity to Give

Extrinsic Factors

Age, Gender, Social Class

Intrinsic Factors

Self Esteem, Guilt, Empathy

The Ask

Past experience, stimulus

Who they are

What they think about

The Ask

Perceptual Reaction

Fit with self, portrayalTheir links to the cause

Propensity to Give

Extrinsic Factors

Age, Gender, Social Class

Intrinsic Factors

Self Esteem, Guilt, Empathy

The Ask

Past experience, stimulus

Who they are

What they think about

The Ask

Perceptual Reaction

Fit with self, portrayalTheir links to the cause

Propensity to Give

Extrinsic Factors

Age, Gender, Social Class

Intrinsic Factors

Self Esteem, Guilt, Empathy

The Ask

Past experience, stimulus

Who they are

What they think about

The Ask

Perceptual Reaction

Fit with self, portrayalTheir links to the cause

• Age /

Gender

• Religion

• Social

• Income

Extrinsic Factors - Age

• Giving increases with age (people aged

55-70 make 65% of all charitable gifts)

Extrinsic Factors – Gender

• More women give than men. They give more overall, in more one-off donations supporting a wider range of organisations

• But men make larger individual donations

Extrinsic Factors – Gender

• Female fundraisers generate more

compliance than males

Extrinsic Factors – Social Class

• Responds more to requests for small donations to relieve pain and suffering

• Give for a long term change in the situation.

• Respond better to messages reflecting a need for long term solutions

32

Extrinsic Factors - Income

Cash in pocket Monthly Wages

Annual Wages Total Assets

Propensity to Give

Extrinsic Factors

Age, Gender, Social Class

Intrinsic Factors

Self Esteem, Guilt, Empathy

The Ask

Past experience, stimulus

Who they are

What they think about

The Ask

Perceptual Reaction

Fit with self, portrayalTheir links to the cause

• Self Esteem

• Social Justice

• Benefits

• Guilt

• Empathy

• Fear / Pity

Intrinsic Factors

Guilt

• I prefer to give to charities that do not get enough government support

• There is no point in supporting charities which enjoy strong Govt. support

• It does not really matter whether I give to charity or not, others will

• I only get pleasure from seeing the work done by charities if I have supported them

• I prefer to give to charities in a way that allows them to get more from the taxman

• I give to reduce my tax bill

• I feel that I should give as much to charity as other people I know

Disagree Agree

17 54

44 27

67 11

59 20

20 46

52 14

69 10

Propensity to Give

Extrinsic Factors

Age, Gender, Social Class

Intrinsic Factors

Self Esteem, Guilt, Empathy

The Ask

Past experience, stimulus

Who they are

What they think about

The Ask

Perceptual Reaction

Fit with self, portrayalTheir links to the cause

• Social

Groupings

• Fit with Self

Fit with Self

• It‟s rewarding to feel you‟ve helped in some way 84

• I give to charities because I like the feeling of being generous 20

• I help concerns where my family or friends are involved 76

• I give to charities because I or my family may personally benefit 40

• I give to charities because I want to support the good 80

causes for which they work

• I give to charities because they help to make a better society for everyone 60

Propensity to Give

Extrinsic Factors

Age, Gender, Social Class

Intrinsic Factors

Self Esteem, Guilt, Empathy

The Ask

Past experience, stimulus

Who they are

What they think about

The Ask

Perceptual Reaction

Fit with self, portrayalTheir links to the cause

• Charity

communications

• Strength of

message

• Processing

• Influences

Why people support the arts

To Develop

Social

Standing

To enjoy

the Benefits

To enable the

Arts to happen

To make a profit

The 7 Steps of Fundraising

• Prepare

• Identify

• Research

• Plan

• Involve

• Ask

• Conclude

• Reciprocate

The 8 Steps of Fundraising

PrepareFeasibility phase:

• Need for money?

• Value for money?

• When do you need money?

• Internal buy-in? A good board?

• Why is your organisation best?

• Staff skills?

• Potential support?

• Enough resources?

Case for Support1. A clearly defined need for support

2. The documentation outlining reason

• The selling document

• An information tool, not the “ask”

• Something visual to leave behind

Ensures:

• Clear rationale behind giving

• All staff are on message

• What‟s yours?

Identify Targets (internal)

Internal contacts:

• Audience/ event guests

• Members

• Previous donors/ sponsors

• Address Lists (Shop – Box Office)

• Board/ staff contacts

Identify Targets (external)External contacts:

• Existing supporters‟ peers

• Typical social/ work circles

• Profiles in magazines

• Keyword searches

• Media appearances

• Estate agents, LAs

• Wealthy areas in neighbourhood

Research• Individuals

• Groups

Researching Individuals

Information to find…

• Giving history

• Wealth / Ability to give

• Interests

• Family background

• Who they know

• Link with your organisation

By…

• Asking peers

• Friends / social circle

• Media

• Research agency

N.B. Use

a database

Researching Groups

Information to find…

• Social Circles

• Wealth / Ability to give

• Interests

By…

• Questionnaires

• Focus Groups

• Other memberships in area (the market place)

Data Protection

Refer to www.institute-of-

fundraising.org.uk for Code of Practice.

Key points:

• Do not use/ share data about individual if they

would not wish it

• If buy list or information, inform individuals that you

hold this

• Need consent for email communications to

individuals

• Sensitive personal data is very protected

• The individual has can request a copy

• Electronic information is easier to track!

PlanFundraising plan:

1. Internal input (from who?)

2. The need

3. Timing

4. Resources you need

5. Communications/ events

6. Budget

7. Benefits on offer (cost/ value)

8. Target income … triangle of gifts

9. Benchmarks

Plan

Encourage internal buy-in:• Show how all will benefit

• Shared targets

• Communicate successes

• Regular agenda at senior meetings

• Reassure them

Plan involve/ potential gift/ timetable

The 8 Steps of Fundraising• Prepare

• Identify

• Research

• Plan

• Involve

• Ask

• Conclude

• Reciprocate

Involve

Work out key worker, influencer,

manager

• 1st approach = to involve them

• Invite to event

• One-to-one meeting with influencer

• Phone call

• How/ what will they learn about your work?

• Intentional and unintentional

• Involve them further

• Active / Passive involvement

Involve• Displays (Info / Point of Donation)

• Print / Leaflets

• eg. case for support

• “Getting to know us” events

• more info about organisation

• Get them right!

• What makes for a good event?

Ask• How are they asked?

• Donations box/ event/ one-to-one meeting

• Who asks?

The ask needs to be:• Clear

• Specific

• Immediate

• Unambiguous

• Easy to follow through with gift

Ask – Direct Mail Letters1. Be clear and concise

2. Provide one paragraph on who you are, why you are writing, what you need and what you will do with it.

3. Keep to one side of A4

4. Add a hand written PS

5. Test the letter on friendly readers

6. Add an image

7. Have it signed by someone important

8. Tailor to the type of person to whom it is being sent

9. Think about the reader - Recognise that they will only give the letter a brief amount of time

10.Make sure the database details are accurate

Remember AIDA:

Get Attention - Arouse Interest - Stimulate Desire -Prompt Action

ConcludeLetters to individuals:

• Thanks for donation / pledge

• Reiterate agreement (dates / amounts)

• Tie in to upcoming events

• Link to outcomes

• Endorse reasons for giving

Beware of cognitive dissonance

Public thanks

• Print (own / external)

• Speech

• Events

Reciprocate• Make them part of the family

• Invite to lunch/ exclusive events

• Good news / Bad news

• Benefits

• Appropriate to commitment

Reciprocate - Benefits

Tangible:

• Tickets

• Programmes

• Special items

• Advanced booking

• Events

• Naming opportunities

• Access to artists

• Access to behind the scenes

• Position on Board

Intangible:

• Feelgood factor

• Association with Art

• Social standing

• Knowing you‟ve made a difference

• Supporting education & outreach work

• Being “in the know”

58

The 8 Steps of Fundraising

• Prepare

• Identify

• Research

• Plan

• Involve

• Ask

• Conclude

• Reciprocate

“I‟m sure I have been a „Friend‟ or a

„Patron‟ along the way and have

followed the usual steps in giving

more and getting more involved -

being brought closer in - but this

seemed a natural development and

I didn‟t feel imposed upon at any

point...

…Sometimes I think this was achieved

through professionalism - sometimes

exactly the opposite - sometimes the

staff seem quite amateur...

… but charming and well-meaning and passionate and that gets the same result”

Philip Spedding

Senior Manager, Individual Giving

020 7940 6419

Philp.spedding@ArtsandBusiness.org.uk

www.ArtsandBusiness.org.uk