Philip Spedding's presentation Truro 25th February 2010

2. Donations
Benefit levels:
Donation Amount Maximum Value
of Benefits
£1 - £100 25% of donation
£100 - £1,000 £25
£1,000 - £10,000 5% of donation
£10,000 + £500

3. Tax Efficient Giving
• Gift Aid
• Payroll Giving
• Gift of Shares

4. Gift Aid
The opportunity to reclaim the basic
income tax already paid on a
donation
• The money must be given by an individual
• The money must be given as a donation
• Donation can be of any size
• The donor has to be a UK tax payer
• A Gift Aid declaration has to be made (written or
oral)
• The donor can reclaim any higher rate tax paid

5. Gift Aid
Basic Rate of Tax
Gift Aid
Amount
= Donation X -------------------------
100 - Basic Rate

6. Gift Aid - Charity
Basic Rate of Tax
20
Gift Aid
£15.00
Amount
= Donation X
£60 -------------------------
100 -– 20 (=80)
100 Basic Rate

7. Changes made in the Basic rate of
tax…
So the Government introduced…
Transitional Relief
You apply for Gift Aid using the usual
calculation and they will then add an
additional 3.2% to any donation made
during the next 3 years.
You can talk about Gift Aid with or
without Transitional Relief.

8. Gift Aid Declaration
• Full name and address
• Charity‟s legal name and number
• Nature of the gift (single or on-
going)
• Permission to use gift aid
• Note stating that the Donor must
have paid sufficient income tax to
cover gift aid

9. Gift Aid – Higher Rate Tax Payer
Higher Rate of Tax –
Lower rate tax
Gift Aid
Amount
= Donation X -------------------------
100 - Basic Rate

10. Gift Aid - Charity
20
£15.00 = £60 X -------------------------
100 – 20 (=80)
Gift Aid – Higher Rate Tax Payer
40-20 (=20)
£15.00 = £60 X -------------------------
100 – 20 (=80)

11. So….
a £60 donation
is worth
£76.92 to the charity
And costs a higher rate
tax payer
£45.00
11

13. Corporate Gift Aid
Normal Sponsorship Donation
Sales £ ‘000 £ ‘000 £ ‘000
Costs 1,000 1,000 1,000
-600 -600 -600
Sponsorship -100
Income 400 300 400
Tax (28%) -112 -84 -112
Donation -100
Profit 288 216 216 188
Effective Cost 72 Gift Aid +28

14. Tax Efficient Giving
• Gift Aid
• Payroll Giving
• Gift of Shares

15. Payroll Giving
Regular donations made from pay
before PAYE is deducted.
• The money must be given by an individual
• The money must be given as a donation
• Donation can be of any size
• The donor has to be a UK tax payer
• The Government added a further 10% to the
donation (stopped April 04)

16. Payroll Giving
Payroll Giving Agency (PGA)
• Collect and distribute donations.
• Approved and monitored by the Inland Revenue
• Can help to promote Payroll Giving in the
workplace

17. Payroll Giving Agencies
• Charities Aid Foundation
• Charities Trust
• The Charity Service Ltd
• The Embassy of Man Payroll Giving Agency
• KKL Payroll Giving Agency - (JNF Charitable Trust)
• Northern Ireland Council for Voluntary Action
• Scottish Council for Voluntary Organisations
• South West Charitable Giving - (Federation of Master Builders
(South West Region) Charity Fund Ltd)
• Sovereign Payroll Giving - (Stewardship)
• United Way Payroll Giving Service
• Working for good
Approved Payroll Giving Agencies for particular business
sectors:
• BEN - Motor and Allied Trades Benevolent Fund
• Achisomoch Aid Company

18. Payroll Giving
Professional Fundraising
Organisations (PFO)
• Promote and recruit new donors for various
charities
• A commercial organisation, in some cases owned
by charities
• Paid a fee by the charities if support is generated.
• Can work with the charity on developing a
campaign.
• Most PFOs belong to the Association of
Professional Fundraising Organisations
(APGPFO) that regulates their conduct.

19. PFOs
• Charity Link
• Ease2Give
• Hands on Helping Charity
• Happy 2 Give
• Payroll Giving in Action
• Revenue Share UK
• Sharing the Caring
• Workplace Giving UK

20. Payroll Giving
• Employer offers / Staff ask for payroll giving
Employer engages PGA
Promoted to staff (internally or by PFO)
Staff sign up
Employer deducts donations
Donations sent to the PGA
• PGA distributes donations to charities (- % for
PGA and PFO)

21. Tax Efficient Giving
• Gift Aid
• Payroll Giving
• Gift of Shares

22. Gift of Shares
The most efficient way to give to a
charity
• Full income relief
• No Capital Gains Tax

23. Gift of Shares
Shares bought for £2,500
Today‟s worth £10,000
Income from selling
Sale £10,000
Less Capital Gains Tax (18% of £7,500) -£1,350
Cash gift to charity £8,650
Value to charity (inc Gift Aid) £11,089
Final cost to donor (inc Gift Aid) £7,837
Gift of Shares
Value to charity £10,000
Final cost to donor (tax relief 40% of £10k) £6,000

25. Propensity to Give
Extrinsic Factors
Age, Gender, Social Class
Intrinsic Factors
Self Esteem, Guilt, Empathy
Perceptual Reaction
Fit with self, portrayal
The Ask
Past experience, stimulus

26. Propensity to Give
Extrinsic Factors
Who they are
Age, Gender, Social Class
Intrinsic Factorsabout
What they think
Self Esteem, Guilt, Empathy
Perceptual Reaction
Their links to the cause
Fit with self, portrayal
The Ask
Past experience, stimulus

27. Propensity to Give
Extrinsic Factors
Who they are
Age, Gender, Social Class
Intrinsic Factorsabout
What they think
Self Esteem, Guilt, Empathy
Perceptual Reaction
Their links to the cause
Fit with self, portrayal
The Ask
Past experience, stimulus

28. Propensity to Give
Extrinsic Factors
Who they are
• Age / Age, Gender, Social Class
Gender
• Religion
• Social Intrinsic Factorsabout
What they think
• Income Self Esteem, Guilt, Empathy
Perceptual Reaction
Their links to the cause
Fit with self, portrayal
The Ask
Past experience, stimulus

29. Extrinsic Factors - Age
• Giving increases with age (people aged
55-70 make 65% of all charitable gifts)

30. Extrinsic Factors – Gender
• More women give than men. They give
more overall, in more one-off donations
supporting a wider range of organisations
• But men make larger individual donations

31. Extrinsic Factors – Gender
• Female fundraisers generate more
compliance than males

32. Extrinsic Factors – Social Class
• Responds more to • Give for a long term
requests for small change in the
donations to situation.
relieve pain and • Respond better to
suffering messages reflecting
a need for long term
solutions
32

33. Extrinsic Factors - Income
Cash in pocket Monthly Wages
Annual Wages Total Assets

34. Propensity to Give
Extrinsic Factors
Who they are
• Self
Esteem Age, Gender, Social Class
• Social
Justice
• Benefits Intrinsic Factorsabout
What they think
Self Esteem, Guilt, Empathy
• Guilt
• Empathy
• Fear / Pity
Perceptual Reaction
Their links to the cause
Fit with self, portrayal
The Ask
Past experience, stimulus

35. Intrinsic Factors
Guilt Disagree Agree
• I prefer to give to charities that do not get 17 54
enough government support
• There is no point in supporting charities 44 27
which enjoy strong Govt. support
• It does not really matter whether I give to 67 11
charity or not, others will
• I only get pleasure from seeing the work 59 20
done by charities if I have supported them
• I prefer to give to charities in a way that
allows them to get more from the taxman 20 46
• I give to reduce my tax bill
• I feel that I should give as much to charity as 52 14
other people I know
69 10

36. Propensity to Give
Extrinsic Factors
Who they are
Age, Gender, Social Class
• Social
Groupings
• Fit with Self Intrinsic Factorsabout
What they think
Self Esteem, Guilt, Empathy
Perceptual Reaction
Their links to the cause
Fit with self, portrayal
The Ask
Past experience, stimulus

37. Fit with Self
• It‟s rewarding to feel you‟ve helped in some
way 84
• I give to charities because I like the feeling of
being generous 20
• I help concerns where my family or friends are
involved 76
• I give to charities because I or my family may
personally benefit 40
• I give to charities because I want to support
the good 80
causes for which they work
• I give to charities because they help to make a
better society for everyone 60

38. Propensity to Give
Extrinsic Factors
Who they are
• Charity Age, Gender, Social Class
communications
• Strength of
message Intrinsic Factorsabout
What they think
• Processing Self Esteem, Guilt, Empathy
• Influences
Perceptual Reaction
Their links to the cause
Fit with self, portrayal
The Ask
Past experience, stimulus

39. Why people support the arts
To enable the
Arts to happen
To Develop
To enjoy
Social
the Benefits
Standing
To make a profit

40. The 87 Steps of Fundraising
The Steps of Fundraising
• Prepare
• Identify
• Research
• Plan
• Involve
• Ask
• Conclude
• Reciprocate

41. Prepare
Feasibility phase:
• Need for money?
• Value for money?
• When do you need money?
• Internal buy-in? A good board?
• Why is your organisation best?
• Staff skills?
• Potential support?
• Enough resources?

42. Case for Support
1. A clearly defined need for support
2. The documentation outlining reason
• The selling document
• An information tool, not the “ask”
• Something visual to leave behind
Ensures:
• Clear rationale behind giving
• All staff are on message
• What‟s yours?

43. Identify Targets (internal)
Internal contacts:
• Audience/ event guests
• Members
• Previous donors/ sponsors
• Address Lists (Shop – Box Office)
• Board/ staff contacts

44. Identify Targets (external)
External contacts:
• Existing supporters‟ peers
• Typical social/ work circles
• Profiles in magazines
• Keyword searches
• Media appearances
• Estate agents, LAs
• Wealthy areas in neighbourhood

45. Research
• Individuals
• Groups

46. Researching Individuals
Information to find…
• Giving history
• Wealth / Ability to give
• Interests
• Family background
• Who they know
• Link with your organisation
By…
• Asking peers
N.B. Use
• Friends / social circle a database
• Media
• Research agency

47. Researching Groups
Information to find…
• Social Circles
• Wealth / Ability to give
• Interests
By…
• Questionnaires
• Focus Groups
• Other memberships in area (the market place)

48. Data Protection
Refer to www.institute-of-
fundraising.org.uk for Code of Practice.
Key points:
• Do not use/ share data about individual if they
would not wish it
• If buy list or information, inform individuals that you
hold this
• Need consent for email communications to
individuals
• Sensitive personal data is very protected
• The individual has can request a copy
• Electronic information is easier to track!

49. Plan
Fundraising plan:
1. Internal input (from who?)
2. The need
3. Timing
4. Resources you need
5. Communications/ events
6. Budget
7. Benefits on offer (cost/ value)
8. Target income … triangle of gifts
9. Benchmarks

50. Plan
Encourage internal buy-in:
• Show how all will benefit
• Shared targets
• Communicate successes
• Regular agenda at senior meetings
• Reassure them
Plan involve/ potential gift/ timetable

51. The 8 Steps of Fundraising
• Prepare
• Identify
• Research
• Plan
• Involve
• Ask
• Conclude
• Reciprocate

52. Involve
Work out key worker, influencer,
manager
• 1st approach = to involve them
• Invite to event
• One-to-one meeting with influencer
• Phone call
• How/ what will they learn about your work?
• Intentional and unintentional
• Involve them further
• Active / Passive involvement

53. Involve
• Displays (Info / Point of Donation)
• Print / Leaflets
• eg. case for support
• “Getting to know us” events
• more info about organisation
• Get them right!
• What makes for a good event?

54. Ask
• How are they asked?
• Donations box/ event/ one-to-one meeting
• Who asks?
The ask needs to be:
• Clear
• Specific
• Immediate
• Unambiguous
• Easy to follow through with gift

55. Ask – Direct Mail Letters
1. Be clear and concise
2. Provide one paragraph on who you are, why you
are writing, what you need and what you will do
with it.
3. Keep to one side of A4
4. Add a hand written PS
5. Test the letter on friendly readers
6. Add an image
7. Have it signed by someone important
8. Tailor to the type of person to whom it is being
sent
9. Think about the reader - Recognise that they will
only give the letter a brief amount of time
10.Make sure the database details are accurate
Remember AIDA:
Get Attention - Arouse Interest - Stimulate Desire -
Prompt Action

56. Conclude
Letters to individuals:
• Thanks for donation / pledge
• Reiterate agreement (dates / amounts)
• Tie in to upcoming events
• Link to outcomes
• Endorse reasons for giving
Beware of cognitive dissonance
Public thanks
• Print (own / external)
• Speech
• Events

57. Reciprocate
• Make them part of the family
• Invite to lunch/ exclusive events
• Good news / Bad news
• Benefits
• Appropriate to commitment

58. Reciprocate - Benefits
Tangible: Intangible:
• Tickets • Feelgood factor
• Programmes • Association with Art
• Special items • Social standing
• Advanced booking • Knowing you‟ve made a
• Events difference
• Naming opportunities • Supporting education &
• Access to artists outreach work
• Access to behind the • Being “in the know”
scenes
• Position on Board
58

59. The 8 Steps of Fundraising
• Prepare
• Identify
• Research
• Plan
• Involve
• Ask
• Conclude
• Reciprocate

61. “I‟m sure I have been a „Friend‟ or a
„Patron‟ along the way and have
followed the usual steps in giving
more and getting more involved -
being brought closer in - but this
seemed a natural development and
I didn‟t feel imposed upon at any
point...

62. …Sometimes I think this was achieved
through professionalism - sometimes
exactly the opposite - sometimes the
staff seem quite amateur...
… but charming and well-meaning and
passionate and that gets the same
result”

63. Philip Spedding
Senior Manager, Individual Giving
020 7940 6419
Philp.spedding@ArtsandBusiness.org.uk
www.ArtsandBusiness.org.uk