“Currently, only one third of all giving is tax efficient. HM Revenue & Customs reports that in 2006/07, £830 million in reclaimed tax was passed on to charities.  CAF estimates that a further one third of donations could easily be converted to tax-efficient methods generating over £600 million in extra income for charities.” 

It would seem that this difference is simply down to large numbers of individual donors not making donations under gift aid, so charities can then reclaim basic rate tax on the value of the gift at no additional cost to the donor. I have always thought most charities sadly seem to treat this whole area as an after thought given how they invariably leave it as a footnote to the donor’s form. If the CAF figures are right then instead of chasing for future legacies would charities not be better off spending their time and effort chasing that “low hanging fruit” of current tax refunds?

How? Simply by data mining their donor databases (refer my earlier blog observations on many charities being poor in this area) and identify those gifts (either regular gifts or appropriate value of larger one off donations) received without a tax refund being obtained. Then, instead of their usual standard letter approach, the charities could easily follow up with an appropriate tailored short letter explaining with specific figures for the donor’s amounts what the benefits would be and asking for the form to be signed and sent back if they were taxpayers when the gifts were made.

Given the possibility of retrospective claims for several prior years under gift aid by charities, one cannot help but feel there is a lot of money waiting to be collected off the taxman by UK charities. Also, this would provide “cash in the bank” and one hopes a better boost to charities cash flows!!   

The total choice of 16 covered large to small with a spread of the well known and unknown and under “welfare” both UK and global. The winners based on electronic votes by over 50% of our total workforce ended up being Cancer Research  (the largest by income) under health and NSPCC (the largest UK only by income) under welfare. The winners easily reflected the greatest number of votes and in a few informal conversation afterwards, many indicated to me that the wide experience of friends and relatives  dying of cancer and  the UK focus on child abuse issues versus well funded international e.g. Oxfam, had led to these choices.  

What is the potential impact if we assume this result is not too unrepresentative and accepting my data is not empirical?  

1. Major charities will be the key beneficiaries under the trend of major firms to annually select charities for sponsorship.

2. Small charities will as a consequence find it hard to break into this lucrative fund raising sector (but ironically they may find it easier to get sponsorship and support at a smaller level – my children’s schools and local church being good examples of such micro charity sponsorship).

3. The national trend may just reflect that the endless international disaster appeals that people respond to do have an indirect impact on future giving.

4.  My personal aim to support smaller charities with focus and simple aims plus proven efficient delivery in their use of funds donated is in my mind anyway reaffirmed – the other end of the extreme I accept but from other bloggers on this site I suspect I am not unique in this approach! 

This article drives home some very simple but major home truths especially in relation to Africa, that it isn’t just about pouring major sums of money in. While the focus in the media is often on headline grabbing major cures being needed in controlling HIV, malaria and other killers, the major issue is often not new technology but simply better logistics. Many practical and cheap solutions already exist such as the million annual malaria deaths which could be dramatically reduced by provision of $5 mosquito bed nets; the 1.6 million deaths per year from severe diarrhea could be prevented by use of 25 cents oral rehydration fluid treatments;and $1 antibiotics could cure many of the 1.8 million deaths per annum from bacterial pneumonia. So what is the problem? Sadly the simple fact that while these solutions exist they are not being applied or easily made available, especially given much of Africa’s population lives in rural villages and not near clinics. The article using an example in Rwanda shows how simple investments in a skeletal health system with recruiting of nurses not doctors, and no high tech equipment except a few microscopes and use of simple, cheap and generic treatments can have dramatic results. As one expert states, “In the real world money and technology is 5% of the solution; 95% is implementation”.

How does this impact when making one’s charitable donations especially where overseas activities are involved? Many charities would I am sure state they are limited in what they can do, not least because of funds constraints. However what I believe this article underlines for me, is why one should support charities that operate in Africa and similar regions, on health or social issues that are often hard to relate to from the comfort of the UK, but can show they are alert to and communicating this awareness of logistics and execution of delivery in what they do and how they use funds donated.

Examples such as Lepra in tackling leprosy; Sightsavers International in tackling river blindness and cataracts; and Womankind in partnering with others to help disadvantaged women exercise their rights and independence are charities I already donate to but on rechecking score highly in this regard. All these charities have for some time shown how by following a micro economy approach in coverage at a village or community level or by mobile treatment and operating theatres, they can apply cheap preventive treatment or implement practical solutions at little cost. Sightsavers website stating river blindness has a 5 pence cure or it only costs £17 for a cataract operation to avoid blindness is indicative of a very simple communication strategy that evidences this awareness well.

Suffice to say that applying this filter and charities communicating their awareness of it in how they operate in showing “value for money”, will be important for me in deciding levels of donations to such charities going forward.

Their brochure was a list of items from the very inexpensive to the more expensive (a bucket for £9, a bike for £38, to a cow for £225). As you may have gathered these were not for your favourite relatives at home, but instead the opportunity to buy for specific use in certain overseas locations in need of such charitable gifts. Each item was accompanied by a short article and picture on how the gift would be effectively used in a poor overseas country location, goats or pigs, water filtration units and mosquito nets all making easy improvements to health and the quality of life. On making any purchase you were then provided with a donors card so that you could choose to send to the favourite relative explaining that this year how the price of their gift had been donated to a more worthwhile cause!

I hope CARE repeats the exercise next year and other charities (especially those involved in developing countries) consider following the example in what seemed to be another good example of “focus” (refer my earlier blog on this issue) in showing excellent application of how directly donor’s funds are then used.

P.S. I made earlier criticism in my first ever blog of how certain charities were not very transparent or smart on sales of charity Xmas cards – congratulations then to YWCA of England & Wales who this year made clear that their arrangements resulted in their receiving 51% of the purchase of Xmas cards sold to their charity. Hopefully more will follow this lead.

1. Firstly, under my pet hate, removing names of donors who have made one off donations in say the last three months, from a proposed general mailing, on the basis they are unlikely to do so again immediately and also get frustrated at the waste of sending such a further letter.

2. Identifying donors who have had three or four years of making a gift aid/covenant at the same level. On the basis inflation, personal improvement etc may mean they are willing to increase their standing order, a gentle chaser may be in order. In recently checking the list of my periodic bankers order payments to charities, I was amazed at how many have stayed at the same amount with little chaser or friendly reminder by the relevant charity that this was the case for 5-10 years.

3. Tracking when certain donors make additional one off payments and writing them a standard but bespoke letter around that time next year rather than bulk standard round robin letters at Xmas etc. thanking and hoping they will be able to make an additional contribution again.

4. Where a donor has been giving for a certain time ( five years, ten years?) to send them a personal “anniversary” thank you for their consistent contributions. This occurred to me when two separate charities recently wrote not only doing this but mentioning how much in total with tax relief had been given ( a pleasant personal surprise but also in my mind showing the charity involved was keeping good accounting records on donors!) and also summarizing the main achievements of the charity across that same period.

I am sure there are other options to add to this list but what they all require is I would guess quite simple usage of data the charity has and in the standard words of management books “looking after their customers” or in the case of charities, their donors. None of this is rocket science but it does show which charities come across as being smarter (and indirectly by having focus hopefully saving wasted mailings etc.)

1. Gifts to prick your conscience – Whether it is coins sellotaped to the letter; packets of salt or seeds (if the stuff is that valuable to poor people in Africa why are they sending it by post to me in the UK?) or address labels (refer also item 3. – Raffles), they fail completely to tell me anything, seem wasted expense and do not motivate me to donate. Address labels bearing your name and address are an interesting phenomenon since they vary between being for suggested use on the accompanying raffle tickets enclosed (NDCS); a suggestion you may want to pay via “donations” for this free gift; or simply a “thank you”. Whatever the intent all I honestly do is use them as and when I see fit – interestingly very few state which charity they relate to on the actual label (Diabetes UK being the most recent example) and so lose the opportunity to promote their brand when the label is used – congratulations to the Alzheimer’s Society for a rare exception who use their name plus their pictorial symbol of ‘Forget-me-not” flowers and state they want you to use them to spread awareness of their work.

2. Pointless Opinion Polls (and the dreaded free labelled biro) – The layout and questions of such “polls” are rarely worth the effort – the questions vary between telling you how little you know about the purpose of the charity or the specific cause they are about or seem a very unsubtle way to test if you will donate more or want to be contacted to be involved even more. I have yet to be moved to complete one and return it – I simply recycle it and place the biro with other charity biros in the container in my kitchen for family writing instruments!

3. Raffle tickets – These seem to be a hangover from my childhood when charities (especially local churches and Rotary Clubs) used them to raise funds. I fear that in the days of 21st century super lotteries, receiving two book of tickets (never one, always two in my case anyway!) where the prizes on offer are often pretty meagre and the hassle of filing in several ticket stubs and then returning in the post with a cheque is just expecting too much I fear. All that seems to have happened anew to entice you is to include address labels so you do not have to complete each of the stubs with a pen! Given no intent to pay for the tickets, I must admit I simply use these labels on letters and parcels as I need (refer 1. re. gifts). Yes, I fear I will still carry on with the National Lottery and if I ever hit the big one, I would hope that I will be moved to share part of my largesse with a number of charities.

4. Badly presented letters – These range in type and I accept may just be very personal turn offs but letters that start “Dear Friend” usually trigger the paper recycling button (I guess I should be glad that none address me as “comrade”!); letters that tell you how much they believe you should contribute (I know there is a psychology that states if you ask for less you will actually get less but since we are talking about the exercise of personal altruism, I do not find myself reacting that way I must admit); and finally letters that still look as though they are church parish newsletters, many of the very worthwhile military related charities being especially guilty in this area. While per my separate blog entry I question the ongoing value of posted charity magazines, if my assumptions are correct such letters will in turn need to change dramatically as they move into the internet age of emails to supporters.

5. Inappropriately timed letters – Know the feeling? You have just made a one off donation to a prior special appeal or increased your periodic covenant/gift aid because it is that time of year, and what do you get in the next two – four weeks invariably off that same charity? Yes, you guessed it, a general appeal letter asking for you to consider if you can donate more! Yes, I accept it is just plain bad timing (at least in giving the relevant charity the benefit of the doubt I sincerely hope it is!) but more than once I have found myself wondering why the heading of the letter does not include the strapline “Come on, we know you can donate more”. Fortunately to date this has never led me to strike a charity off from further donations, but in being honest there have been a few close calls I fear!

Estate agents when asked what make for a good choice of house to own invariably state “location, location, location” and in the same vein I think the key for me is charities who can demonstrate “focus, focus, focus” in what they do. In my case the two simplest criteria under “focus” I can ascertain my inner self responding to are premium and value added application of funds raised (low overheads and evidence of hands on use of the funds and immediate benefits when applied) plus a linkage with innovative and practical uses of such funds. This may in part explain my greater interest in many “smaller” charities where this linkage can be more easily understood allied with certain charities advising what different levels of contribution permit them to apply and obtain in usage (versus telling you what amount to contribute!).

One recent example brought home to me how impressive this can be in moving one to make extra contributions. The charity is the Motor Neurone Disease Association (MNDA), a disease which I have fortunately no family or personal experience of, but from all I read given there is little understanding of its causes and currently no cure (or method of slowing down its development), is devasting in how it destroys the nervous systems of human beings in a short period of time and is effectively a death sentence.

The caring for people suffering as they become infirm and unable to move and lose communication skills, is inevitably a great burden on their family who understandably prefer to keep them at home rather than leave in hospital during such a traumatic experience. The MNDA understanding this and with most sufferers and their family being older has embarked on the provision of establishing a pool of vital equipment that is available on a loan basis to sufferers. The clear implication that many local health authorities cannot easily provide such items on a prompt basis has been responded to by the MNDA providing Riser & Recliner armchairs; suction units to clear saliva through increasing inability to swallow; and Lightwriter devices when voice loss starts.

Such hands on application and direct usage of practical support equipment (which could also be re-used) plus a copy of a letter off a husband whose wife had recently died from MND and was helped greatly by this approach, left me in no doubt that I would make an additional contribution – and also left me feeling that the personal test of “focus” had been fully satisfied!

The reason for the thought is that when reading so many in a row they all invariably seem the same in format and layout if not in their content. The general format followed seems to be of Foreword; short articles of Research News or other forms of updates on investigative work being done or developments on government actions; Fundraising activities round ups; a few major articles typically on either a major event, a major research writer covering what they are doing or a celebrity covers their interest in or impact by the subject of the Charity; and finally the magazine has a varying number of specialist adverts relevant to the charity where UK medical related. Cystic Fibrosis goes one further in separating out Fundraising into a separate newspaper.

The provision of different forms of information is clearly important to charities in keeping their activities in donor’s minds but sending magazines which one fears are largely unread and binned/recycled does seem wasteful use of resources. Also with the best will in the world I must admit that at best I largely scan through rather than read thoroughly.

In the 21st century with greater use of computers and consciousness on wasting natural resources, one wonders if the following should be considered as a better overall form of communication to donors?

1. Ask recipients firstly, if they actually want to receive such posted magazines (compliments to Cystic Fibrosis who do include such a document as part of the address label);
2. Consider also asking those donors if they would instead like to receive an emailed newsletter – the best example for me, which occurred a few days after all the above magazines had been received was Sightsavers International whose monthly one screen long newsletter is short and informative but allows links to longer news or webcasts as you wish to read or delete.
3. In turn accepting that a well constructed website (easily linked also through such e-newsletters) is increasingly going to be more cost efficient and effective in communicating with existing donors who want to know what is going on or what the charity is up to/involved with.

Do not be surprised if (time permitting) a further blog on the effectiveness of charity websites follows!

What has led me to question this approach as being the best use of effort and resources (and expense) for many charities is the increasing number of catalogues simply having the same range of or very comparable Xmas cards – very few attempt their own unique Xmas cards each year! With such a lack of choice the ability of charities to get real benefits in terms of major and recurring sales seems based more on pot luck. In addition one gets the impression that the real beneficiaries are the commercial publishers of such cards who are simply “branding” them with different charities names, and the charity then collecting a commission based on annual sales. I have no idea of likely revenues (many charity accounts do not provide such levels of detail) but always suspected that the income is marginal and not major based on what is on offer.

Is there a better and more efficient way in selecting and helping charities under this form of giving? I did not think so until last year when I accidentally came across “Card Aid”,
(http://www.cardaid.co.uk/catalog/) itself a charity trading organisation owned by the Charity Advisory Trust. They state all net profits each year go to charitable purposes, with details of individual donations made listed on their website. However, more important to this posting’s theme is that you can choose from a wide selection of cards (including images I had not seen before) and then designate the charity (again a very considerable range being available) whose name will appear on your cards. In addition, this means that nominated charity will directly receive the relevant profits on those cards, stated at being around 60% of the sale price. To enable comparison go to the Cardaid Annual Survey of Xmas charity cards on their website with its own Scrooge Award (Harrods being the last winner!) where it is clear most commercially produced and sold cards rarely get above 10% (many being way below) and so answered my earlier question as to whether the charities were the real losers!

And if this were not good enough news , the site this year in being “greener” and more eco friendly offers a very funny and wide range of e-Xmas cards!

Would it not be more interesting (and also more remunerative one hopes) if more of the smaller charities considered simply advising their donors of this service with relevant details rather than producing and mailing their current individual brochures, especially if the profit contributions are so far apart?