August 2020 - Monthly Briefing

Welcome to August and a big hello to our new subscribers.

This month…..

  • Charity Commission to hold it's annual public meeting remotely

  • Almost a third of charities report decline in voluntary income

  • Research shows that four in 10 donors are incentivised to give by Gift Aid & other Government top-ups

  • Understanding Gift Aid

The meeting is open to all members of the public and representatives of civil society and will be held remotely on Zoom. It will also be broadcast live from the regulator’s YouTube channel. According to a statement the meeting will be hosted by Baroness Stowell, the chair of the Charity Commission with chief executive Helen Stephenson and other directors.

The annual event is part of the Commission’s commitment to accountability and transparency. People can apply to be part of a virtual audience online and will have the chance to put questions to the panel. At the Commission’s public meeting last year, Baroness Stowell warned that charities were not “delivering their full potential” and could no longer rely on the public giving them the “benefit of the doubt”. Back in January in an article for The Telegraph, Nick Timothy, who was Theresa May’s chief of staff until 2017, accused the Charity Commission of being “ineffective” and said it “should be abolished”. In response the Commission’s chair, Baroness Stowell, had a letter published in the paper which said: “Nick Timothy makes an important point in demanding that quangos and institutions become more democratic and address the things that matter to people. But he’s wrong to include the Charity Commission among those he criticises for not doing so. Putting the public front and centre of what we do is central to how the Charity Commission is changing and how we are seeking to drive change in the sector we regulate.” Earlier this month the Commission published its annual report and outlined new performance standards for the year ahead. It also revealed plans to launch a new online register of charities in the coming year. The Commission states that it has been working on improvements to its register, “to make it easier for the public to find the information on registered charities they need”.

Almost a third of charities report decline in voluntary income

27% of charities surveyed for Blackbaud’s latest Status of UK Fundraising report say their voluntary income has declined this year, with around the same proportion unsure whether their organisation will survive the impact of the pandemic. Blackbaud Europe and the Chartered Institute of Fundraising produced the Status of UK Fundraising 2020 Benchmark Report, by surveying 1,990 fundraising professionals across charities of all sizes. 51% of respondents were from small charities (total income less than £1M) and 43% were fundraisers. Last year’s report showed that the top concern across the sector was that the UK’s economic situation may result in fewer donations. This continues to be a significant concern for organisations although this year’s pandemic is the biggest challenge organisations believe they will need to overcome. Voluntary income growth slowed down this year across all types and sizes of non-profit organisations: • 27% said their income had declined, up from 21% last year • 24% said it remained the same, up from 16% last year • 40% said their income had increased, down from 49% in 2019 However, 66% of respondents said they were either fairly confident or very confident that their organisation will financially recover from COVID-19 and 24% said they were very confident that their organisation would be able to adapt and use new ways of fundraising to combat the challenges of the pandemic. The two most common answers given for income growth remained the same as in 2019, these were undertaking planned new or different activity and hiring people with the right skills. Daniel Fluskey, Chartered Institute of Fundraising’s Head of Policy & External Affairs commented:

“Given that vast swathes of fundraising activity has not been able to take place since March, it is not surprising that fewer organisations would report income growth this year. However, the extensive effect of Covid-19 on financials will only be fully reflected in future research where we can take a longer view. Unsurprisingly the challenge that Covid-19 presents for charities and the associated economic cost are front-and-centre of people’s minds when thinking about the years to come.”

Research shows that four in 10 donors are incentivised to give by Gift Aid & other Government top-ups

A Charities Aid Foundation survey carried out last month has found that four in 10 of those who already donate money to charity said Government incentives such as top-ups make them more likely to give. The research also found that more than half (55%) of those aged 35-44 said they were worried about their household income over the next six months. The percentage for 25-34 year olds was 51%, while for those aged 16-24 it was 36%. Those aged over 65 were least likely to be concerned but among this age group still some 24% were very worried or quite worried about their household income in the near future. A charity coalition has recently called for a temporary increase in Gift Aid relief to help charities of all sizes trying to cope with the impact of the pandemic. This change would mean that a £100 donation from a UK taxpayer would increase from the current £125 for the charity to £133.33. Over 70,000 charities claimed Gift Aid in 2019 and over 120,000 charities are known to be registered for Gift Aid and the Gift Aid Donations Scheme. Susan Pinkney, Head of Research at CAF, said:

“It is heartening to see that despite the economic worries facing so many UK households, the willingness to help those in need is still very strong.”

Understanding Gift Aid

Gift Aid is a scheme which allows charities and Community Amateur Sports Clubs (CASCs) to claim from HMRC, the basic rate of tax their donors have paid. Gift Aid increases the value of donations by 25%. • You can claim if you’re recognised as a charity or CASC by HMRC. • Your donor needs to complete a Gift Aid declaration form. • You can claim from HMRC online and get payment within 5 weeks. The donor must:

  • have paid at least as much in Income Tax or Capital Gains Tax in that tax year as you want to claim in Gift Aid

  • make a Gift Aid declaration that gives you permission to claim it (you must keep a record of declarations for 6 years after the most recent donation you claimed Gift Aid on).

  • If the donor has not made a declaration you may still be able to claim on cash donations of £30 or less, for example from a collection.

The Gift Aid declaration must include a description of the gift and the:

  • name of your charity or community amateur sports club (CASC)

  • donor’s full name

  • donor’s home address (at least their house number or name and postcode)

You cannot claim on donations:

  • from limited companies

  • made through Payroll Giving

  • that are a payment for goods or services or made because your charity or CASC bought goods and services

  • that started as loans, but no longer need to be repaid

  • where the donor gets a ‘benefit’ over a certain limit

  • of shares

  • from charity cards or of vouchers, for example Charities Aid Foundation (CAF) vouchers

  • of membership fees to CASCs

  • you got before you were a recognised charity or CASC

Small donations scheme You may be able to claim 25% on:

  • cash donations of £30 or less

  • contactless card donations of £30 or less collected on or after 6 April 2019

This is called the Gift Aid small donations scheme (GASDS). You do not need a Gift Aid declaration to claim. From 6 April 2016, you can claim up to £2,000 in a tax year or £1,250 for earlier years. How to claim Gift Aid You can claim Gift Aid using Charities Online with:

  • eligible software, like a database

  • a spreadsheet of your donations

For claims of over 1,000 donations you must use software. To apply by post use form ChR1, which you can get from the charities helpline. When you’ll get paid You’ll get a Gift Aid payment by BACS within:

  • 4 weeks if you claimed online

  • 5 weeks if you claimed by post using form ChR1


You may also find these guides and documents helpful which include Templates and Step by Step instructions.