Give As You Earn: The hidden benefits of payroll giving

Lorelei Bowman

23/11/2018
Categories: Reward and Benefits, Culture

It’s that time of year again. Black Friday sales are appearing throughout shopping centres, Cyber Monday ads are cropping up online… And now, there’s a new kid on the block: Giving Tuesday.

Spearheaded by the Charities Aid Foundation (CAF), Giving Tuesday is an international day of general generosity, encouraging people to donate and volunteer after the commercialism of Black Friday and co. But why should giving back be limited to one day?

Give As You Earn (GAYE) – also known as Payroll Giving – was introduced in 1987, but it remains one of the benefits with lowest take-up. According to the CAF world giving index 2018, the UK is the sixth most generous country in terms of ‘doing good’ – with Indonesia, Australia and New Zealand leading the way. CAF help people donate over £74 million every year; and Charities Trust process £3 million annually in Payroll Giving alone.

So, we know it isn’t that the world is inherently tight-pursed – do employees simply not know the benefits of payroll giving? Or are employers not pushing the benefit hard enough?

Giving feels good

Research shows that doing good feels good. Countless studies support the theory that volunteering, donating to charity, or simply being kind, not only makes us feel good, but decreases stress, improves blood pressure and mental health. Some people argue that good deeds are paradoxical, that by doing good you are only serving your own altruism. But why shouldn’t people feel good for doing good? By taking part in GAYE schemes, you help others, use your hard-earned money for causes close to your heart, and ultimately, get something back for yourself as well.

Payroll Giving provides more than other donations

The benefits of donating through GAYE go beyond the fuzzy feeling you get from helping a good cause. Payroll Giving is tax effective, meaning the charity receives a bigger donation than when you donate through other platforms.

Normally, donations are taxed unless you opt to include Gift Aid – which allows the charity to claim back 25p for every £1 donated. While Gift Aid is great, it still leaves the charity to deal with the administrative hassle. It also means you’re donating more money than they actually receive: through a standard donation of £10, the charity receive £8 – but with GAYE, if you give £10, they get £10. With Payroll Giving, you can donate what you want to donate, rather than needing to up your contribution to compensate for the tax.

What’s more, lots of employers (like Benefex) offer to pay the admin fee that comes with any charity donations. Some employers or Payroll Giving providers even offer to add additional money to each donation through the scheme. Whether you’re donating £6 a month, or giving £30 and being matched by your employer, you can rest assured that the money you think you’re donating is actually reaching the cause.

You don’t have to choose

Choosing between charities is like choosing between puppies. Sometimes, quite literally. It always swings around to January and you’re faced with an empty bank account and a renewal letter to sponsor a dog. The TV bombards you with well-meaning adverts showing starving children; a disaster aid relief team; the effects of global warming on coral reefs. And what about your local homeless shelter? How can you possibly help all of them? It almost seems better to choose none than pick one over the others.

With many GAYE providers, you don’t need to choose between worthy causes: you can just split your monthly donation between multiple charities. So rather than picking one charity to donate £30 a month to, you can give £10 to three different charities – whether these are all in the same field, or completely different; it’s up to you! 

Give as you earn takes the excuses out of it

How many times have you watched a documentary or read a news report that left you vowing to donate to a new charity? How many school fundraisers and charity marathons have you battled internally about parting with a fiver for? 

Yes, GAYE schemes take the administrative effort out of supporting good causes, but they also remove the excuses. GAYE simply takes the donations you’ve set up, and keeps going until you cancel the benefit. That means, rather than having to actively decide to go out and do good, the benefit just does it for you. No more guilty regrets after you say, ‘Perhaps when I’ve got a bit more cash,’ yet again – because you already help a little bit, every month.   

Supporting charities encourages others to do the same

It’s long been an adage that ‘kindness is contagious’ – we can all agree that after someone gives you the 20p you’re missing for the bus, you remember that moment and are likely do the same for someone else. Research has proved this theory of ‘paying it forward’ – a study showed that when individuals saw someone else giving money, they were more likely to give money away in the future. Interestingly, the amount of money given also often increased with each iteration. So, if you set up a monthly £10 donation, it’s quite possible through your influence you’ll encourage friends, family or colleagues to start donating £15 a month as well. Every little truly does help, but especially so when your ‘little’ snowballs into a lot.

So, when Giving Tuesday comes around on 27th November this year, consider the unique perks of Give As You Earn schemes and how you can better share the benefits with your people. Because together, one donation, one month at a time, we really can make a world of difference. 

Would you like help to promote generosity with the Give As You Earn benefit? Chat to us about how we can help.

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