Government urges credit card giving

1st January 2011  

In a bid to assist the falling revenues faced by many charities the Government has taken the unusual step of suggesting that people could give to charity when they use credit cards and debit cards in retailers or even at cash machines. There are even suggestions that the public could donate to worthy causes when they apply for driving licenses, passports, or when they complete their tax returns.

The moves are set out in a Government ‘Green Paper’ calling for charitable giving to become more of a “social norm”. The consultation calls on UK banks and businesses to copy a system set up in Columbia which allows customers to make donations each time they withdraw cash. It would seem a fairly straightforward thing to do as existing bank ATM’s already give us the option to purchase things like mobile phone top-ups.

Ministers are also recommending a national ‘round-up-the-pound’ scheme which would encourage people to donate the equivalent to change when paying by credit card or debit card.

The Government’s Cabinet Office Minister Francis Maude stated it was not an attempt to “compel” people to give but rather to further inspire people to get behind the “big society” agenda advocated by Prime Minister David Cameron.

Mr Maude said

“If there were to be an understanding that people might give on average 1% of their income, that would generate another £4bn of giving.

“For some things there’s an absolute social norm that if you go to a restaurant you expect to tip somewhere probably between 10% and 15% and that’s kind of an understanding. There’s no similar understanding with charitable giving.”

There’s already an electronic charity box scheme in place called Pennies set up by the Pennies Foundation. A Government working group will be set up in 2011 to look at how it could be further expanded.

The Pennies Foundation confirms that it’s conducted a number of surveys which indicate consumers like the concept of making a difference by giving just a few pennies. They prefer the option of an ‘on-the-spot’ choice not an on-going commitment to give, and that it’s private with no pressure or hassle to donate. It particularly appeals to younger people (under 34) where 74% say that this method of giving works for them.

Pennies went live in November 2010 with first retailer, Domino’s Pizza. Their customers can choose to round up to the nearest pound as they order online.  In the first six weeks of the campaign over 80,000 of their customers donated a few pennies and between them have already given over £20,000 which will all go to a group of 11 UK people charities, large and small.

Chief Executive of the Charities Aid Foundation John Low embraced the Green Papers moves to “kick-start some new initiatives which will make it easy to give and to build up existing ones”.

But he also said

“There is more that could be done to make it easier to take advantage of tax incentives, including reforming the Gift Aid system, improving access to ‘Give As You Earn’ and encouraging all types of tax-effective giving”.

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