Rogers & Hammerstein would probably have avoided making the Gift Aid Small Donations Scheme (GASDS) the subject of one their catchy-show tunes, but at NCVO improving the GASDS is one of our highest priorities (see our manifesto)!
The GASDS enables charities to claim a ‘top-up payment’ on claim small cash donations (under £20) up to £5000. This means that small charities that do small cash fundraising are not disadvantaged compared with other forms of fundraising and hopefully will encourage smaller organisations to fundraise and diversify their income.
Alongside our partners at Charity Finance Group and the Institute of Fundraising, we have been consulting with charities to understand what barriers to using the scheme might be, as the GASDS has only distributed £6m in its first year, when it was predicted to cost £50m.
Over the summer, we launched a survey to ask charities about the scheme and received over 200 responses. On the basis of this, we have created a briefing on the Gift Aid Small Donations Scheme (PDF, 470KB) on the scheme and outlined a number of reforms that the government should make in order to improve uptake.
Here is a quick summary of its findings
1. Communication, Communication, Communication…
Most charities, particularly small organisations, do not check HMRC’s website for new schemes on a regular basis and unsurprisingly, nearly half (46%) of micro charities (income less than £10k) and more than one in five small charities (£10-100k) reported that they did not know about the scheme.
If GASDS is really going to take off, the government needs to consider better ways to promote the scheme whether that is through face-to-face engagement with charities or through using existing networks to distribute easy to understand information about the GASDS and how it can help.
2. “The claiming process is too complicated! Much clearer guidance needed please!”
The above is a quote from one of our survey respondents, but speaks for many charities. Charities of all sizes reported difficulty in understanding the claiming process – with one in five respondents stating that the claiming process had put them off claiming. 66% of micro (income less than £10k) and small charities also reported difficulty in understanding what types of donations they could claim under the scheme, another barrier to take up.
Related to the issue of communication are the complex rules of the scheme; particularly regulations around donations made in ‘community buildings’, the ‘matching requirement’ (you can claim £10 under GASDS for every £1 in ordinary Gift Aid you collect) and connected organisations. Given levels of take up so far, government should consider whether some of these rules, especially the matching requirement, are necessary. Their removal would certainly make it easier for organisations to understand and encourage claims. As one respondent said:
“…we also receive donations where donors Gift Aid it so we are able to’ match’ but I would guess that many small charities struggle to meet the matching criteria which means they still miss out. The matching needs to [be] dropped altogether to really make a difference to small charities.”
3. New organisations are missing out
One of the requirements that a charity must meet in order to claim GASDS is that it must have been in existence for two complete tax years.
Paradoxically, it is start-up organisations which are looking to fundraise to generate income that are most likely to benefit from the GASDS. One third of micro and small charities that responded to our survey had said that they were not yet able to make a claim under GASDS because of this rule.
Although there were concerns about allowing new charities use the scheme when it was first proposed, we believe that given the GASDS current performance, this should be reviewed.
What should we do now?
The government committed to reviewing the GASDS after three years, but given its low take up rate so far, we believe that this review process needs to begin now so that potential support for small organisations is not lost.
The review should include representatives from the voluntary sector, so that the needs of small charities are considered at the top table, and it should work with the sector to gather data on the organisations that are eligible for GASDS, so that we can better target support and monitor progress – a similar recommendation was made by the NAO in its report, ‘Gift Aid and reliefs on donations’ (PDF, 470KB).
Have you had problems accessing the GASDS or suggestions on how it could be improved?
We’d like to hear from you. Please leave a comment below.
Andrew was NCVO’s senior policy officer. He covered issues around funding, social investment, tax and the impact of the economy on the voluntary sector. Andrew has left NCVO, but his posts are kept here for reference purposes. 
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