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I recently visited Malawi to see an orphanage charity’s good works first hand.  I have been inspired by the work of FOMO (Friends of Mulanje Orphans) and in particular the fact that all the funds they raise go directly to help the 6,000 orphans under their care.

Since coming home I have researched how charities operate both locally and nationally.  I was shocked to find that charities estimate that they lose £900 million each year simply because of inefficient giving.

A lot of this could be recouped without donations having to rise by a single penny simply by employers adopting Payroll Giving.  This allows all employees to donate to a charity of their own choice directly from the payroll.  Charities say it is the most efficient and effective way to give. 

For higher rate taxpayers it increases the contribution by 40%. So for a £6 donation the charity gets £10.  After April 2010, for 50% taxpayers,  the donation received by the charity will double.   This is clearly attractive for higher rate tax payers, many of whom may currently use gift aid and claim back tax through their tax return.  Payroll Giving, however, allows all the tax to be donated directly to the charity.

Employers who are interested in Payroll Giving should look at the Gearedforgiving.com website which gives lots of information about how to implement the scheme.  It is amazing how quick and easy it is to do. There is no set-up cost and the administration time should only be a few minutes a month.  An employer simply chooses a payroll agent who is HM Revenue & Customs approved. That agency receives all deductions from the payroll department in one lump sum and they sort it out from there.

What’s more, introducing such a scheme can also help with staff morale.  A recent survey found that an organisation’s reputation for social responsibility is the third biggest driver of retention. 

FOMO’s motto is “Helping does make the Difference” and Payroll Giving seems an easy way to make the pennies or even the pounds go further.