The Fundraiser - Practical advice and insight for the charity sector

Posted in Special Focus Charity Retail & Auctions

Charity shops and Gift Aid

Why aren’t some charity shops taking full advantage of Gift Aid? Fundraiser editor Jenny Ramage investigates.

 

In an ongoing effort to get my cupboards to a state where I can actually close their doors, I have donated a range of clothes and household items to a variety of charity shops over the last six months or so. The fact that this project is rather like painting the Forth Bridge (as every time I donate something to charity shop, I end up buying something to replace it), isn’t relevant. What is interesting, though, is that not once have I been asked by the shop assistant about Gift Aiding my donated goods.

 

Wising up

Generally, charity shops have been getting more savvy in recent years. Charities have realised the importance of making their shops more attractive, and more time and thought now goes into the quality and presentation of goods on offer. Many charities have realised that adding a new and/or branded range of goods can add to the appeal - as can other specialist ranges, often tailored to suit the demographics of that particular locale, such as vintage wear or wedding dresses. Many charities have worked hard to strengthen their corporate partnerships for stock donations or gifts in kind.

Considering they are otherwise so smart about retail income, it surprises me that some charity shops appear not to be treating Gift Aid as absolutely crucial, and that their staff aren’t asking every single person who drops off goods whether they would like to Gift Aid it. Why would they not be taking every opportunity that’s available to them to maximise retail profits?

 

Flawed system

I asked Rhodri Davis, policy manager at CAF, for his views. He thinks that the reticence among charity shop staff can be traced back to flaws in the overall Gift Aid system. “It’s a system that wasn’t ever really designed for sale of goods and doesn’t lend itself very easily to the non-cash donation context”, he says.

Currently, we’re working with a system designed for cash donations that has been sort of fudged a bit in order to be applicable in non-cash donation scenarios. Despite some simplification of the process which came into effect in April last year, the behind-the-scenes mechanics are still quite complicated, and therefore the process remains rather convoluted.

It requires a lot more admin, for a start, which is possibly enough to put many people off. More fundamentally, in training their volunteers to ask about Gift Aid, the shop managers must themselves have a good grasp of the system - something which Rhod thinks is lacking across the sector as a whole. “Charities do have issues in getting people - particularly volunteers - sufficiently well educated about Gift Aid to be able to explain it to donors. Trying to give shop volunteers enough information to make sure they can answer questions from customers in a way that doesn’t end up confusing them is a real challenge.”

He thinks that in the absence of a simpler, more streamlined system, more fundraising training is perhaps needed “to give people a clear and concise way of explaining Gift Aid that makes it seem easy, and like something a donor wouldn’t think twice about doing.

“By not asking people in the right way, charities are potentially missing out on millions.” He says.

 

Slipping away

Wendy Mitchell, head of policy and public affairs at the Charity Retail Association, was surprised to learn of my experience of never being asked. From her vantage point, she sees that charities with retail outlets are placing a great deal of emphasis on Gift Aid. According to the most recent Charity Shop Survey, 77 per cent of charities say their shops claim Gift Aid, compared with 33 per cent in 2009. So the evidence shows it has certainly grown, and that is very good news.

But from personal experience, I know that some Gift Aid-eligible donations are, quite unnecessarily, slipping through the net. I thought at first, perhaps I’m the only person who never gets asked. Perhaps, when I walk into the shop, they take one look at me and something makes them decide I can’t possibly be a UK taxpayer and so there’s no point even asking. But I know I’m not the only one being overlooked - I’ve been keeping an eye out, and have noticed a great many people dropping off goods at charity shops without being asked about Gift Aid.

 

You don’t ask, you don’t get

A couple of weeks ago, I started volunteering at a charity shop myself. Here, I make a point to always ask customers about Gift Aid. I’ve found that it can in fact be explained in clear and simple terms, and my customers are very receptive. Certainly I see no good reason why shop managers are failing to ensure their volunteers know how to ask about Gift Aid. It’s really not that difficult.

Here’s what I say when someone comes in with a bag of goods to donate::

“Thank you very much. Do you have a Gift Aid number?” [and if they answer no:] “Are you a UK taxpayer?” [and if they answer yes:] “Would you like to sign up for Gift Aid? It just takes one minute to sign up, and basically it means that when we sell your donated items, the government gives us back the tax that we pay on each sale, as a gift. So it means your donated goods will go a lot further in helping us raise money.”

I’m still honing my pitch to perfection, but so far it seems to be working pretty well. To date, only one person has declined to sign up - as they were in a rush to move their car whose engine they’d left running outside the shop. However, they actually popped back into the shop a few minutes later to fill out the form.

The current Gift Aid system is overly complex, yes. But that isn’t an excuse for inaction on the part of charity shops. Those charities who fail to hammer home the importance of training shop staff to ask goods donors about Gift Aid are, quite simply, missing out on thousands, if not millions, of pounds each year.

 

Jenny Ramage is editor of The Fundraiser

How to ask charity shop donors for Gift Aid

Here are 6 easy steps for helping volunteers in your charity shop understand how to ask for Gift Aid. Print out and keep at the counter!

 

1. Say thank you for the donation

2. Ask if they have a Gift Aid number (if yes, note down the number and attach it to their goods)

3. If no, ask if they are a UK taxpayer

4. If yes, ask if they’d like to sign up for Gift Aid and explain what it means: “When we sell your donated items, the government gives us back the tax thatwe pay on each sale, as a gift. So it means your donation will go a lot further in helping us raise money”

5. Ask them to fill in a Gift Aid form with their name and contact details

6. Give the completed form to your manager and attach the assigned Gift Aid number to the goods donated. Give a Gift Aid information leaflet to donor.

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