Why payroll giving amounts to so much for charity

By Beth Courtier, community investment programme manager, Corporate Responsibility unit

On my very first day at BT I signed up to the company payroll giving scheme – donating to charity through my pay-packet. That was twenty years ago, and BT’s scheme continues to be very well supported with a 14 per cent uptake against a UK average of just 4 per cent. Indeed BT has been held up as positive example of payroll giving amidst growing calls for more companies to participate.

Payroll giving is a no brainer. It’s one of the easiest and most tax effective ways for employees to donate. Through a very simple online mechanism you can give directly from your pre-tax salary to your chosen charity – which for BT employees ranges from household names to local scout groups. The simplicity of payroll giving is matched by generous tax reliefs: In the standard tax bracket it costs you just £8 to donate £10. And BT pays the admin cost of running the scheme so the full value of the donation goes to the employee’s charity of choice

Payroll giving is obviously good news for charities. It provides a steady and predictable income that enables charities to plan ahead and make the most of the money and funds that arrive directly in the charities’ accounts so that they don’t even have to reclaim the tax. But at BT we’ve further enhanced our scheme by a £1million contribution to boost the donation’s value. In fact we run one of the UK’s largest matched funding schemes, adding extra money to employee donations or providing one-off lump-sums to their charity. It significantly increases the real term value of the employee’s donation – adding an extra 38p for every £1.

Nearly eleven thousand BT employees donate through our payroll giving scheme, with BT boosting their donations to £3.5million last year. If more corporations were to follow suit by doing the same, think of the difference employee and employer could make together.  Now that would be really terrific news for charities...