Two out of five charity donors 'forget Gift Aid'

Around two out of five people who give to charity forget to claim Gift Aid on their donations potentially depriving good causes of a 28% boost on money raised, new research from Virgin Money Giving shows.

Around 53% of charity donors always claim Gift Aid when giving cash to good causes but another 40% say they would do so if reminded, the research shows.

Gift Aid - which enables charities to claim 28% in tax relief on every donation by UK taxpayers who fill in a Gift Aid declaration - is well known with just 7% of taxpayers claiming not to know about the system.

But it is a different matter when it comes to putting it into action with around 2.2 million donors admitting they do not claim Gift Aid despite being able to. Around 1.4 million say they cannot as they usually give direct to a fundraiser who cannot claim Gift Aid while another 653,000 say they do not understand how to claim.

Virgin Money Giving, the not-for-profit online fundraising website from banking group Virgin Money, has achieved 87% uptake of Gift Aid through its service which has raised more than £25 million for good causes in its first year.

Across the charity sector as a whole, offline uptake of Gift Aid is around 40%. As a result charities could be losing out on around £750 million a year, according to the Charities Aid Foundation. It is urging charities and fundraisers to fully embrace technology as the best way to maximise money for good causes in the face of the ongoing squeeze on charitable giving.

Jo Barnett, executive director at Virgin Money Giving, said: "Gift Aid is a major resource for charities and should be used to the maximum. Awareness of the system and the benefits it can provide are high.

"However it is clear donors could make better use of the current system with 40% of people admitting they forget to claim. Online giving has demonstrated it can significantly improve uptake of Gift Aid.

"Online giving cuts administration costs, improves Gift Aid uptake and is more convenient and easier to use for charities and fundraisers."

For every £10 donated on Virgin Money Giving £12.47 makes its way to charity assuming Gift Aid donors are UK taxpayers. Its own not-for-profit model and 2% fee to cover costs means it was able to channel £1 million more to charities during its first year than if the cash had been donated through other online donation services. Virgin Money Giving processes all Gift Aid amounts at no cost to the donor or charity.

Charitable organisations including the Institute of Fundraising and the NCVO are currently campaigning for the Government to create a standard database for Gift Aid claims and to allow charities to file claims online.

Virgin Money Giving has over 2,400 charities registered and 40,000 fundraisers taking part in a range of activities, from the Virgin London Marathon to a team of fundraisers driving a fire engine across the globe.