Fundraisers should be worried about declining understanding of Gift Aid

nfpResearch is a leading market research agency in the not for profit sector. And their recent research has highlighted a disturbing trend.

Gift Aid is a valuable scheme for the sector but their data shows a concerning decrease in the public’s knowledge and understanding of Gift Aid over the last decade.

Cian Murphy’s recent blog reports the following: –

“Fundraisers as a group are well aware of the value of Gift Aid to the sector. The tax-free giving scheme allows charities to claim back an additional 25p for every £1 donated by UK taxpayers and is a vital lifeline for charities across the country. In 2012 when then chancellor George Osborne announced plans to limit tax relief on charitable donations for higher rate taxpayers, the sector mounted a successful campaign to reverse the decision under the slogan “Give it back, George”.

In retrospect this may have been a high point for media prominence of tax reliefs on giving and ten years later our data suggests that Gift Aid has fallen off the radar for a lot of the public. For a number of years, we have tracked knowledge and understanding of Gift Aid among the general public. We first ask respondents whether they have heard of the scheme and then ask them to select the correct definition among several options.

From 2010 to 2021 we have seen significant decline in both. In 2010, 88% of respondents claimed to have heard of Gift Aid and of those, 82% correctly identified it as a method for charities to claim back tax on donations. By 2021 these figures had dropped substantially to 73% and 66% respectively. This means that the overall proportion of the public correctly able to define Gift Aid dropped from 72% to 48%.

This should be concerning to charities as lower familiarity with the scheme may lead to lower levels of uptake. The scale of the issue may be masked by the age profiles involved. While older people, the group most likely to be donating substantial amounts, continue to be broadly aware of Gift Aid, younger people are much less likely to know about the scheme. It is particularly concerning that among Millennials the proportion correctly able to identify the definition of Gift Aid is just 33% as this group reaches an age where charities could traditionally expect to start recruiting them as donors.

This is in line with huge amounts of other research we have done that indicates that younger generations are not engaging with charities at the same rate as older generations did at the same age. If we want to stop the well of donors running dry, the sector needs a comprehensive strategy for communicating about Gift Aid, as well as a broader plan for engaging the next generation of givers.”