Strategies to tackle the £600m Gift Aid claims gap via mobile
Today marks Gift Aid Awareness Day. According to CFG (Charity Finance Group), there is a £600m Gift Aid claims gap that still needs closing. When UK taxpayers give to a charity, Gift Aid allows for an extra 25p to be added to their donation for every £1 that they give. This is fully funded by the UK government and is of no extra cost to the donor. For many charities, Gift Aid contributions provide an essential upside to consumer donations, providing money that is often used as operational income, enabling charities to pass 100 percent of donations on to those who need them the most.
The increasing prevalence of digital channels means charities must engage with consumers and accept donations from a range of channels, from online to mobile.
When a donation payment is made using a credit card online, the donor enters their address as part of their donation and can agree to add Gift Aid in the same step; this is why charities have been able to typically collect a higher Gift Aid percentage from credit card donors.
When giving via SMS the donor simply sends a text to a short code and the donation amount is taken from the phone bill. Although this is a quick and easy method for the end user, it misses the details required for a Gift Aid declaration.
According to the PSA’s (Phone-paid Services Authority’s) annual market review, the last year has seen a 64% jump in mobile donations, which could have left charities with less Gift Aid to claim. However, through many years of working with charities, Fonix has recognised the need to keep on the front foot and has employed numerous techniques to ensure charities are maximising their Gift Aid declaration potential.
Fonix has powered the mobile donations for many charity campaigns: BBC Children in Need, ITV’s Soccer Aid for UNICEF and The Ruth Strauss Foundation to name a few. For all of these campaigns, the charities commissioned Fonix to create a Gift Aid microsite, which is embedded in the donation response message and can be easily filled in by the donor with just four simple details needed. 58% of Ruth Strauss Foundation’s supporters have allowed Gift Aid to be claimed on their #RedforRuth donations, an incredible result for mobile text donations.
Fonix was quick to recognise mobile CRM as a way of encouraging those who were yet to add Gift Aid to do so. By sending a personalised SMS reminder message containing a clickable link inviting donors to make a declaration, charities can convert what may have been missed Gift Aid declarations. Fonix consistently sees a 12% conversion rate to these types of CRM campaigns, leading to thousands of extra pounds in Gift Aid revenues for the charities.
Fonix also identified the trend for higher donation price points leading to a larger volume, and subsequent larger value, of Gift Aid declarations. Since the hugely successful introduction by Fonix of the £20 price point in 2016, and more recently the £40 price point, the extra 25% makes a big difference. By calling out to £40 donors that their Gift Aid declaration can add £10 to their donation at no extra cost to them, Fonix has seen between 70 and 75 percent Gift Aid claims on the £40 price point alone.
You’re never going to be able to collect Gift Aid from 100 percent of your donors as not every donor will be eligible. However, by focusing on the friction points within your campaign and having the right technology in place to offer a seamless Gift Aid declaration journey, it is possible to significantly increase the amount of Gift Aid available to your charity.