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Is your charity missing out on an extra 50% Gift Aid?

June 8, 2020

Research shows that a third of Gift Aid eligible donations don't get claimed. You could be receiving an extra 50% in Gift Aid, and getting declarations from your supporters is the key.

Gift Aid forms a vital funding source for almost all UK charities, topping up eligible donation by a huge 25% and enabling them to do more good with the same donations. But with the current crisis, that's not necessarily true; many charities are tasked with much more demand, whilst at the same time facing a reduction in donations and ability to fundraise through events.

If that sounds familiar, you're not alone.

A third of charities (35%) are facing increased demand for their services, and over half (53%) have seen income from donations reduce, with the majority seeing a significant reduction of 25% or more.1

With all face-to-face events cancelled, many organisations have had to quickly pivot, applying for emergency grants or offering virtual meetups and online video fundraising activities. We've seen many of our customers use conferencing tools like Zoom with great effect, in most cases reaching a wider audience than would ever be possible in person.

But that still takes vast person-hours to apply, or organise and run, stretching resources to their limits in order to bring donations to within a shadow or their former levels. Donations change

Between 2018 and 2019 over £5.41 billion was donated to charity, with an additional £1.35 billion in Gift Aid bringing the total to a tremendous £6.76 billion.2, 3

Charities are missing out on £600 million
in unclaimed Gift Aid 5

But according to research published by HMRC in 2018, Gift Aid was only claimed on half of donations, with an extra 25% of eligible donations going unclaimed.4 This means charities could increase their Gift Aid amount received by nearly 50% extra!Gift Aid 50 percent extra

Not only does this represent a significant boost to fundraising, it's money that, importantly, wouldn't require any extra giving from donors.

So what's the missing link? How do charities successfully claim more of the Gift Aid funds that they are entitled to?

The answer: Gift Aid declarations.

In their report, HMRC concluded that "the value of unclaimed Gift Aid is mostly driven by a lack of opportunity" and that "more consistent opportunity to add Gift Aid to donations across channels could significantly reduce the amount of unclaimed Gift Aid."6

Your charity likely receives donations from a wide variety of channels - direct debit, standing orders, online donations, cash, cheque, charity vouchers, crowdfunding, collection tins... the list goes on. But not all avenues are equal when it comes to Gift Aid.

"Offline channels are more likely to
contribute to unclaimed Gift Aid"

Switching to online giving could significantly increase the collection of Gift Aid declarations; 73% of online donors allow Gift Aid to be collected, vastly better when compared with just 50% for cheques and charity envelopes or 46% for text giving.7

But even if you did miss out on claiming Gift Aid from a donation, that doesn't mean that it's lost forever. Donations notes

A Gift Aid declaration is usually retroactive for 4 years prior to the declaration date, and any eligible donations can also be claimed from HMRC up to 4 years after the end of the financial year when you received the funds.8

Instead of finding new donors and asking for more donations, many charities are finding success simply asking for declarations from existing donors who haven't already given one.

(We've written all about how to run a Gift Aid declaration campaign from within Beacon, and take away all the manual data entry associated with processing them)

Of course, once you have a declaration, finding and collating all of those payments from over the years can be tall order without a CRM like Beacon; a system designed from the ground up to make this sort of information easily accessible. Not only that, but you'll have them automatically rolled into a claim to submit with the touch of a button.

Don't miss out on on the Gift Aid rebates you're entitled to!

If you'd like to talk to someone about switching to a CRM that's modern, flexible, beautiful, and makes claiming Gift Aid a breeze, please drop us a message.


1 - CAF, Demand is up whilst income is down, 2020
2 - HMRC, UK Tax repayments to charities on donations, 2019
3 - HMRC, UK Gift Aid and Covenants, 2019
4,6,7 - HMRC, Charitable Giving and Gift Aid Research Report, 2018
5 - Civil Society, Charities missing out on £600m in Gift Aid, 2018
8 - HMRC, Gift Aid, How to claim