The Justgiving charities blog

Gift Aid... the small print

The news that Gift Aid was going to stay at 28% was greeted with cheers from all corners. But whilst the future is rosy for the next three years, upon reading the small print, you'll see that the whole Gift Aid process has actually become more difficult for the next four months or so.

Let me explain (and there is, alas, no easy or short way to explain this)...

The Budget good news

On 6th April 2008 the basic rate of income tax is being reduced from 22% to 20%.  This changes the calculation behind the rate of Gift Aid reclaim from 22/78 (28.2%) to 20/80 (25%).

While all claims “allowed” (i.e. all donations made on or after the 6th April 2008) in the new tax year will be repaid initially at the rate of 25%, the Treasury has ordered that transitional relief of 3.2% also be repaid to charities on all donations made before 6th April 2011.

The small print

No transitional relief will be repaid until Royal Assent is granted to the Finance Bill 2008.

Which is nice.

Apparently, Royal Assent is a procedural formality of the legislative process and there is virtually no possibility of refusal.

But this is not expected to take place until some time in July.

Which is really great to know when you've been given more or less two weeks notice to change one of the most important processes for your business or charity...

Once Royal Assent is granted, HMRC plan to go through all the claims which include donations from the qualifying period (i.e. since 6th April 2008) and pay the extra 3.2% separately, as if it were a correcting payment to the original claim.

What this means is that we will have to reclaim Gift Aid at a rate of 25% until Assent is granted, at which point HMRC will pay the additional transitional relief of 3.2% automatically.

Claims submitted or processed after Royal Assent has been granted will be effectively processed as per tax year 2007-2008 for 28.2% of Gift Aid, although technically 3.2% of this will still be transitional relief.

After July we will need to continue to report Gift Aid and Transitional relief separately, although they are likely to be received from HMRC and paid over to charities together.

Submission and separation of April Gift Aid claims

We will submit Gift Aid claims for this transitional period as below:

1st April 2008 – 5th April 2008 donations – CLAIM A
6th April 2008 onwards donations – CLAIM B

Justgiving will generate a Gift Aid claim for 1st to the 5th April (Claim A) at the old 28.2% rate. This will be sent off to HMRC shortly thereafter so charities should get their Gift Aid payment that much sooner.

Subsequent claims (Claim B’s) will be at the new rate of 25% (the 3.2% relief will not be noted on the claim form), raised at the end of the month.

But - this is a last minute plan for HMRC and what they have told us could potentially change.

Again, this is really helpful to our developers and finance team who have been frantically changing our business, finance and varied back office systems...

Charity Account Reporting

For payments of  Gift Aid at the new transitional rate we will add three new columns to our reports: a 25% Gift Aid column plus a 3.2% Transitional rate column and a total Gift Aid column.

However, as the first payment of transitional rate Gift Aid is unlikely to be made before the end of May, this change will not be visible until then.

One last thing to note is that our 5% fee will still be calculated on gross donations (the donation plus Gift Aid at the 28% rate) throughout this period. And it will be taken out of the payments we make at 25%, before Assent is given. But that does mean the transitional relief payments of 3.2%  we'll make will have no fees deducted.

That's all folks

Hopefully you've understood this, it's been a dubious pleasure to try and explain it. But email me if you have any questions (although I can't guarantee I'll be able to give a better explanation!).

And, suffice to say, where I quoted our CFO in ebullient mood in our first post about the new Gift Aid rates, his opinions this time aren't suitable for posting online...

Expo-nential

At the time of writing, the countdown to the Flora London Marathon shows 18 days and 17 hours till the Big Day... Which means it's only 2 weeks until the FLM expo.

Like last year, we'll be there again, hanging around, ready to talk to anyone who wants to talk to us, give us feedback or ask for advice or help on all things online fundraising (or indeed the chap who asked me to help him use an international phone card!).

Feel free to come along and say hi to us, it's always nice to prove that we are actually real people! A variety of JG staff (even, gasp, the techies and finance bods) will be seen or heard at stand 448 sandwiched between Ki Health International and the Baxters Loch Ness Marathon.

And to top it off this year we also have a Wii on our stand to encourage even more people to toddle along and meet the JG team (and then ignore us to play games). Now you'll definitely want to come over and say hi.

Plus, for all you stats fans out there, at the last count there were 14,730 Marathon fundraising pages on the site that have already raised over £7 million for 1,264 charities.

That's an increase in donations of more than 25% compared to the same time last year!

Do come over and let us know your stories, I mean, just look at how much fun it was last year...

Updates to Terms & Conditions for charities

In order to clarify some of the processes we undertake (specifically refunds), we have updated the Terms and Conditions for charities on Justgiving.

You can access the new T&Cs by clicking here.

The main addition is to clarify and confirm our policy with respect to refunds; we have always refunded donations made on the site provided we've received authorisation from the charity involved. The way that worked was that we would pay back the money donated to the donor (from our operational accounts), and then deduct that amount from the next payment made to the charity.

This had not before been clarified in the T&Cs, but it was always our process. What is a new process is that if there is not enough money in the next payment to cover the refund we had already made, we will issue an invoice equal to the amount of the refund, expecting settlement within a month.

Also added is the proviso that we can suspend the use of Justgiving by a charity if the subscription isn't paid. Which is much the same as anything you pay for, really.

One last change is including in the T&Cs the fact that Justgiving retains interest on the trust account in which donations are held before being paid to you. This is to cover the costs incurred by us when we pay credit card fees, which is typically about 8-10 weeks before we receive our transaction fee from the Gift Aid reclaimed and paid to charities.

So, in summary, here are the major changes to the T&Cs:

• we’ve confirmed how we’ve always worked with refunds
• if refunds are not covered by the amounts in subsequent payments to you, we’ll invoice you for the amounts already paid to you
• we reserve the right to stop the service if you stop paying for it

If you have any questions about these updates, email me or leave a comment.

Charity Account update: finance reports made easier

Our techies (mostly Derrick) have today made some updates to the charity account that we hope will make it easier to use. The change will primarily effect payment reports, but it also cleans up the column selection screen.

What's new?

Click here to watch the video below in full screen

Now, when you click on the Finance reports tab, you are taken straight to the list of recent payments made to your charity:

On this screen you can now choose whether to download a PDF summary of the payment, or create and download a detailed report in either CSV or Excel.

If you choose to create a detailed report in either format, you're presented with the screen below that gives you the option to select different columns to appear in your report, use a default column selection or use your saved settings:

[Note: this screen has changed for all reports that you can create in the account]

Once you've clicked on "continue", the report is then created in real time, and you can download it (after the Justgiving dog has finished barking at the, er, Dove of Data).

We're confident that these changes make the process easier, so that now it only takes three clicks from logging in to get all the details of the money we've sent to you!

Gift Aid stays at 28% in 2008 Budget

So... some good news for charities in the 2008 Budget! Yesterday, the Chancellor announced that charities can continue to reclaim Gift Aid at its current rate of 22% for the next three years, despite the standard rate of income tax dropping to 20%.

What does this mean?

Well, an extra £300 million for charities, according to the Financial Times. Who then go on to say that...

Claiming gift aid can be highly complex, since it is hard for charities to tell which donors are eligible and which are not.

Of course, with respect to Justgiving, we reclaim Gift Aid on every eligible donation made through the site. To do that we ask all donors a couple of questions to confirm the eligibility of their donation for Gift Aid - and you can see what they are in an earlier post.

This means it's not "highly complex" at all if people make a donation through our site, making us an extremely efficient way to collect donations online - and the reason why most charities use the site.

Justgiving's Chief Financial Officer, Neil Bannister, had this to say about the Budget:

It's great news to see that the Chancellor has recognised the importance of charitable giving in the current budget by keeping Gift Aid at the current rate, due to the 2% transitional relief.

Gift Aid is a hugely important relief for all charities - last year, Justgiving processed £18.5 million of Gift Aid on donations of £85 million; the previously expected fall in Gift Aid to 20% would have meant that £2 million less Gift Aid would have been raised for charities through the site.

Justgiving will continue to endeavour to help all member charities take advantage of Gift Aid through our automatic reclaim process and benefit from this Budget announcement.

To find out more about Gift Aid and Justgiving, see our riveting explanation here.

And for more information on the Treasury's consultation with charities about Gift Aid, and what they announced in the 2008 Budget, see their website here.

Their site includes a handy PDF download that gives you the high level and detailed information about the changes and non-changes to Gift Aid, including a the launch of a new Gift Aid web information service amongst many more exciting things...

Congratulations Dotty Rhino

Almost a year ago, we started a charity website of the month feature on the charities blog, and the inaugural winner was the fabulous Dotty Rhino website.

It's strange reading something I wrote 12 months ago when I first started writing to this blog, but it's clear that we're not the only fans of the site... as the Dotty Rhino blog has just won "best african weblog" at the Eighth Annual Weblog Awards!

Now, the *bloggies* are pretty prestigious so this is a great award to receive - and if you look through the other winners, there are some pretty big name, huge traffic blogs up there. Plus, as far as I can tell, it's the only charity short-listed too!

But what's it about? Here's what the blog says:

Dotty Rhino is a real-life baby rhino living in a purpose-built rhino sanctuary in Tanzania. She and her friends are protected around the clock by Fitz and his dedicated crew who work incredibly hard to maintain water supplies, organise anti-poaching patrols and support the surrounding villages.

Dotty Rhino Humans work behind the scenes in an effort to educate and inspire young children to get involved in wildlife preservation and to introduce the world to the real Dotty Rhino.

Our Dotty Rhino Blog is unusual because it is aimed specifically at young children. This means we cannot observe several typical blog features… we never link to third-party external sites and we vet every single comment to ensure our site is safe for visitors of all ages.

So congratulations to Mandy and the team at Dotty Rhino for a great effort! :-) If you're a charity wondering how you might start blogging to reach out to your target audience and supporters, it's a great example to follow.

And here's to starting a new bloggies category next year for "best online fundraising weblog aimed at charities that use Justgiving, written by a guy called Jonathan"...

How to badge your email signature

Today we received an email from Laura at Sue Ryder Care that included one of the pretty little buttons we make available in the charity account.

What buttons you say? The ones you get by following these instructions...

Ones like this little chap here:

Or on Laura's email signature like this:

That button, when clicked on, takes you to their fundraising area on Justgiving. And it's a great way to promote the site - even if people don't click on it, they'll still read it and potentially remember it...

Find out how to do it yourself by watching the short video tutorial below:

Click here to watch the video in full screen

Now on my email signature, I have a very snazzy headline animator (courtesy of Feedburner) that shows the latest posts from this very blog:

And what's cool about that is that I can get stats for it (I love stats) - and since our helpdesk have this in their signature too, a lot of eyes get to see it - 1,386 people in the last 30 days in fact.

So, whilst not many people may have clicked on the animator, a hell of a lot have seen it - and it's funny what things sometimes stick in people's minds...

Who knows, it might even be why you're reading this!

And for an old post on another great email signature, click here. And you can find out how to add a fundraising page badge to your signature here.

More than just events

Here's a question I was asked last week by Sue from the Woodspring Association for Blind People:

I realise that this [Justgiving] is a great resource for people doing sponsored events for us, but could you explain how the site can be used for other forms of fundraising please?

For Sue, and the many others who've asked that before, here's my answer...

Let's start with some charity case studies. Medecins Sans Frontieres gave us a breakfast talk last year entitled Beyond Events: Raising Funds By Unleashing Supporter Creativity.

Download the notes below to read how 'special occasion' and 'in memory' fundraising pages account for 25% of their donations through Justgiving.
Download MSF_talk.doc

WaterAid also gave a breakfast talk in August about achieving 2x growth by tapping into non-traditional revenue streams - which for them were 'celebration' pages and 'in memory' pages.

Through effective and persistent promotion, the charity had more than 50 wedding fundraising pages set up for them last year alone. Read their talk to find out how they did it:
Download wateraid_talk.doc

Another thing to remember is that fundraising pages can be created for literally anything - the only limit is the imagination of the person (or charity) raising money! Have a look at the Inspiration for Fundraisers or JG: A-Z categories on our fundraiser blog for examples of the amazing variety of things people do on the site.

We mentioned the two charity examples above, plus even more about what we term 'Non event Fundraising', in our welcome pack. Read more in the PDF below, or have a look at these past examples.

Download raise_more_money_2.pdf

Also on this theme, one of the great things about our latest charity website of the month, NAPAC, was the way they promote all these different types of fundraising on their own site.

And that is one half of the secret of 'Non event Fundraising' - both MSF and WaterAid promote the fact that Justgiving can be used for more than just events (else we'd be called Justevents...) - they give examples of these pages with strong calls to action and they reap the rewards.

Of course, having more pages depends on being lucky enough to get supporters who are motivated to take up challenges to fundraise in many weird, wonderful ways (like our very own Lee) - and that's where your job comes in :-)