Small firms encouraged to help charities

With just three months to go before the end of the Payroll Giving Grants programme, the Institute of Fundraising ('Institute') is urging small to medium sized organisations (SMEs) to sign up to Payroll Giving before December 31 2006 and receive a cash payout of £300-500.

Payroll Giving enables employees to donate to any UK charity straight from their gross salary, giving immediate tax relief. The Payroll Giving Grants programme is rewarding organisations with less than 500 staff with a grant of up to £500 for signing up to Payroll Giving before the end of 2006. The programme will also match every donation pound-for-pound, for the first six months of each employee's donations.

Lindsay Boswell, Chief Executive of the Institute of Fundraising, said: "Payroll Giving offers businesses the chance to play their part in generating a regular, reliable income stream for charities. Quick and easy to set up and run, Payroll Giving is good for business and a real benefit to offer employees. So if you don't have a scheme in place already, set one up before the end of the year and you can claim your grant".

Payroll giving

Payroll Giving enables employees to donate to any UK charity straight from their gross salary, giving immediate tax relief. The new grants programme, matches donations of up to £10 from each employee every month, for the first six months after they have signed up to the scheme. This means that £10 donated each month would be worth as much as £20 to the charity and will cost employees paying basic rate income tax £7.80 (or £6 for higher rate taxpayers). Matched donations apply during the first six months of an employee's gifts, until the end of the programme in March 2007.

The other part of the Payroll Giving Grants programme consists of a one-off grant of between £300 and £500 for employers who sign up to Payroll Giving before the end of 2006.

Julia Cleverdon, Chief Executive of Business in the Community, said: "Payroll Giving is great for business, because it's an ideal way for businesses to develop further community engagement with a local charity, as well as enabling employees to give tax-effectively. Payroll Giving provides charities with a regular, reliable income, and with the SME Grant Programme, businesses can receive up to £500 for setting up a scheme before the end of this year, so everyone wins."

To set up a Payroll Giving scheme, employers have to sign-up with a Payroll Giving Agency who will transmit the donations on their behalf. All modern payroll systems can facilitate Payroll Giving, usually as a simple tick box option. Payroll staff will deduct the amount, as per any other pre-tax deduction (after National Insurance, but before tax) and forward it on to the Payroll Giving Agency, who will distribute the monies to the chosen charities. The Payroll Giving Grants programme is funded by the Active Communities directorate, administered and promoted by the Institute of Fundraising, with support from Business in Community.