CHY3 & CHY4 Forms - Tax Relief on Donations Revolutionised

One of my pet hates is when people say something "will revolutionise fundraising"...but this will revolutionise fundraising (in Ireland): it's the new CHY3 and CHY4 forms for tax relief on donations.

We all know and love their older brother CHY2 and the changes that came in to effect this year will mean charities should get more in the long run (although will probably see a dip in income in 2013).

The CHY3 & CHY4 forms have a similar result: you get tax relief on donations over €250 in the calendar year but there are some differences which will change everything you do:


The Forms Can Be Signed At Anytime
This is huge - you no longer need to wait until the following year to get the donor to sign the form. Instead, they can sign it at the time of donation (or in fact before their donation).

So at the point of any face-to-face recruitment you should also be attempting to get one of these forms completed, saving you trying to contact your donor months or years later. This should increase the amount of secured forms from 30-50% up to over 90%.

Similarly, any donations through DM, on-line or Telephone present an opportunity to get the form signed that week, rather than having to wait. This will impact how you construct all of your DM pieces and what you send out to any other donors.


The Forms Don't Specify Donation Amount
This is a weird one, because it means you now have the opportunity to get consent from donors who may not look like they're going to give €250, because you don't know what they're going to do in the future. If I commit to give you €100 this year are you going to ask me to sign a CHY form because I might end up giving you more? And how do you handle that conversation without seeming cheeky?


CHY3 Forms Last For 5 Years
The CHY4 lasts for a year and the CHY3 form last for 5 years - you can keep the donor's PPS number on file for this time. This is incredible because once the donor signs a CHY3 form you won't need to chase them up for 5 years (although it's important to keep their contact details up-to-date for when the form does expire).


They Can Be Renewed By Phone/Text/On-Line
But even when they expire the good news is they can be renewed by recorded phone, text or on-line if a record is kept.


Refunds Will Be Staggered
Apparently refunds will be staggered through the year - PAYE donors mostly in the first half of the year and Self-Assessed in the second half of the year.


How else is this going to affect your organisation?


I'm still pulling together information on these changes and I won't be held responsible for any mistakes in my interpretation of the changes! Special thanks to Bruce Clark of The Good Form and Richard Dixon of Concern for tweeting information on this!

One Percent Difference - National Giving or National Trusting?

Last week saw the launch of the "One Percent Difference" campaign - "An opportunity to get the ‘ask’ right, and elevate fundraising and philanthropy in Ireland to a new level." Yes, there are issues with it, but I like the website, the TV ad and the sentiment. Charities collaborating can only be a good thing and I'm grateful to the organisers.

But is it what the sector needs?

The One Percent Difference campaign quite rightly tries to highlight that, yes, of course you can afford to donate 1% of your time or money. But I would argue the barrier to giving for most people is not the money...it's a lack of belief.

The people who are responding to the 1% difference campaign so far are those that already give more than 1% of their time and money to causes that deserve it. The people who don't already give 1% are those that simply don't believe the money will be used wisely, that don't think charities are making a difference, that think you're wasting money. They get more pleasure from buying things for their kids, their friends and themselves because they see the world change around them when they do.

You know when someone asks you if you want to go out on Friday night and you can't afford it? And then someone you really like asks you if you want to go out and you find the money?

Perhaps we don't need a National Giving Campaign - "a collection bucket in another format" - yet. Perhaps we need a campaign on trust and a campaign on impact. Perhaps we need to show what your donation achieves. We need to show how and why your money is spent. We need to show that your work works. We need to show that lives are changed. We need to show that most charity staff work their asses off despite the fact they could earn 22% more in the private sector. We need to show it's almost always not a scam. We need to show impact.

And if we show that then the giving will follow.

I've compared it before to the Got Milk campaign in the U.S. - People didn't stop drinking milk in the '90s because they couldn't afford it. They moved their spending to other drinks because they believed Coke tasted so much better and they would be like Michael Jackson if they drank Pepsi. And the Got Milk campaign was dairy-police's attempt to change that.

As One Percent Difference pointed out, we're spending €6 billion a year on alcohol. People still smoke (seriously). We're queuing for the new iPhone. The existence of wax museums and ghost tours is a clear indicator that people can afford to donate more.

And charities can do more. Only 2% of charities use the telephone to fundraise. Only 50% reply to e-mails. Charities spend an unnecessary amount on bank charges and payment processing. There are donors ready to give and charities aren't allowing them to do so. Are you ready for someone to offer you their 1%?

We need to get rid of the notion of admin costs and wasted money. We need to get rid of the myth that we "don't want better regulation". We need to regain trust. There is more waste, inflated pay and mistakes in the private sector - but it's louder in the community and voluntary sector. Let's fix that.

And in the meantime let's embrace the One Percent Difference campaign, and let's improve it:

• Let's get a donation facility on the site (why add an additional step? Sponsor.ie would be happy to help like we did with Better Together).
• Let's use it to promote planned, regular giving.
• Let's work it in to our messaging and get a concrete plan about what charities should be doing with it.
• If you already give 1% then give 2%. Or 5%. Or 15%. Let's give until it stings a little.
• Let's get a call-to-action - how do you want my 1% and what's involved step-by-step?

Got opinion?

Fundraising Ideas I'll Probably Never Do

I've been keeping notes of little fundraising ideas I'd like to do eventually. But I'm beginning to realise I'll probably never have the time or they suck. And the other day I seriously nearly got hit by a car. So I'm making my 'notes' public - feel free to steal any of these ideas*:

Super Mario Bros. 3 Live
Super Mario Bros 3 can be finished in 11 minutes. But instead we get someone who will play it from start to finish in about 30 minutes live on stage on a giant screen (maybe at The Sugar Club?). There will also be a live band on stage who will play all the music and sound effects.

Prostate Party
Black-tie dinner where all the men's names are drawn randomly and they go one-by-one in to a private room to have their prostate checked. Cadburys Chocolate Fingers are a possible sponsor.

Loudness Race
People who sponsor me can decide what I listen to while I run a marathon. The more you pay the more airtime you get - can choose songs, record speech, whatever.

Push A Car From Dublin to Galway
"This doesn't make sense. Neither does poverty."

Run That Doesn't Pass Any Pub (James Joyce Ulysses)

This blogger found a route through Dublin (inspired by Ulysses) that doesn't pass any pubs. Organise a fun-run along this route - probably for an alcohol-related charity.

Celebrity Speed Dating
5 celebs in a room, auction places for 5 punters who will get to talk to each of them for 5 minutes.

555-Number That Goes To Charity Line
Whenever anyone gives a phone number in a movie it's usually a fake number (eg. 555-5555 in America) because randomers try to call it. Instead, let's get a phone number that goes through to a dedicated charity awareness/donation line and ask all future movies and TV shows to use this number instead.

Donate For Every...

Make a donation for every text/call/e-mail/interaction you make or receive in a week. Good for charity highlighting isolation.

Mortgage
When people take out a mortgage give them the option to add an extra tiny amount in the payment. Nominated charity gets lump sum from the bank.

Clampers Donation
I would love to work with the clampers on a CSR plan.

Alternative Olympics
Including the 100m dash in a hotel corridor.

Frape Campaign
A 'frape' is the "act of using another person's Facebook account to post derogatory messages." For obvious reasons the term is pretty offensive.
But what if a charity set up a donation landing page that explained why the word was offensive, how it's relevant to the charities work, and why they need your money. Then, when you or anyone sees someone has left their Facebook page open, instead of posting "I eat poo" you would post a link to the campaign page.

*If by some chance you do any of these it would be cool to get a little credit or let me know how it goes...thanks!

Fundraising Ireland Opening Plenary: The War On Non-Profits

Here's the audio and slides from my Fundraising Ireland 2013 Opening Plenary: The War On Non-Profits.
It was too awkward to do all the animations...I'm sorry.

Charities & Political Donations

Following on from my previous blog post there is one question that needs to be looked at further: Can charities make political donations?

This was prompted from the Iona Institute's most recent published accounts which saw €500 of 'political donations' made in 2011. And, presumably, there are other registered charities in Ireland also making political donations.

Under the scheme of tax relief for eligible charities in Ireland, Revenue requires that:

"...the applicant charity applies its income for charitable purposes only."

But can a political donation be part of the charity's work? The UK Charity Commission is quite specific on this:

"Charities must never support political parties. They cannot make political donations or give other financial support or resources."

But what does Ireland's Revenue say? I contacted them to ask about this specific example. They replied:

"...for reasons of taxpayer confidentiality, the Revenue Commissioners cannot comment upon the tax affairs of individual bodies. The role of the Revenue Commissioners in relation to charities is confined to determining the eligibility of applications from bodies of persons or trusts for exemption from certain taxes on the basis that they are established for charitable purposes. Revenue also operates controls and monitoring procedures to ensure that charities with the tax exemption comply with the terms of the exemption. 

and:

"It should be noted that all the income of a body granted charitable tax exemption must be applied in furtherance of the body's charitable objectives."

To clarify here, Iona Institute's objectives are stated as "the promotion and advancement of religion and the education of the public with regard to marriage".

When I instead queried, in general, for non-specific charities, what the policy is, the reply was:

"In relation to the general phrase "a political donation" it is not known what is meant by this or the circumstances surrounding the donation and for what purpose the donation is made.
In a general sense the promotion of a cause that relates directly to the advancement or promotion of the charitable purposes of the body can be considered acceptable.
To determine the specific circumstances in any case one would have to have regard to all the circumstances of the particular donation and the charitable objects of the body making the donation and as advised already this is not possible as to do so would breach our obligation to observe confidentiality to all taxpayers."

Not that I'm picking on the Iona Institute, but they're the only example I have - so I contacted them to try and begin a dialogue on their finances (which are not available on their website) and I asked four of my TDs for assistance - TDs and councillors are always either extremely helpful or just don't bother to reply.

My TDs raised the issue with the Minister for Finance who had this response on the 15th of May 2013 (highlighted by me):

The charitable tax exemption scheme is administered by the Revenue Commissioners. In order to avail of the exemption, a body or trust must be established for charitable purposes only and must apply all of its income to charitable purposes. The Deputies are most likely aware that while bodies that hold a charitable tax exemption are not permitted to make donations that directly support political parties or candidates, they are however, permitted to apply their funds to activities that advance or promote their charitable purposes. Depending on the circumstances, these can include certain political lobbying and advocacy activities in support of their charitable purpose. 

Procedures are in place to ensure that bodies that are granted charitable tax exemption are subject to periodic reviews to ensure that the terms of the exemption continue to be fulfilled. All relevant matters, including matters which have been brought to the Revenue Commissioners attention, are taken into account in the context of such reviews.   

In regard to the specific issues raised by the Deputies, the Revenue Commissioners have indicated that in order to determine if any such item of expenditure satisfies the terms of a charitable tax exemption it is necessary to examine that expenditure, the context in which it was incurred and the charitable objects of the body incurring the expenditure in detail. 

If the Deputies wish to provide specific details then the Revenue Commissioners will investigate the issue/s to ensure the terms of the exemption/s in question are being adhered to.

So we did that - we provided specific details of the charity and their audited accounts showing that they had made a political donation. And the Minister for Finance replied...

The investigation of any registered charity is a matter for the Revenue Commissioners. In addition, I am advised by Revenue that, for reasons of taxpayer confidentiality, it cannot comment on the tax affairs of individual bodies. 

However, Revenue has assured me that bodies that are granted charitable tax exemption under Section 207 of the Taxes Consolidation Act 1997 are subject to reviews to ensure that they abide by the terms of the exemption.  These reviews include detailed examination of all relevant expenditure including any donations made. 

Where donations are found to have been made, Revenue must determine and be satisfied that the expenditure was in accordance with the terms of the charitable tax exemption and that it clearly related to the charitable objectives of the particular body.

The conclusion being that Revenue ARE satisfied that Iona Institute's political donation was in accordance with the terms of the charitable tax exemption, noting that charities are not permitted to donate to support political parties or candidates.

Satisfied?

Door-to-door Complaints DID NOT Double In The Last Year

The FRSB's 2012 complaint report came out yesterday with the highlighted area of concern that doorstep fundraising complaints increased by 93% in the previous year. Various media took that to mean that doorstep complaints doubled. Danielle Atkinson already wrote a great post here on why that was a terrible headline. At the very least it's misleading...at most it's just wrong.

But I wanted to add to the discussion by looking further at the door stats and seeing how close to doubling they actually were. Warning: this is stats heavy.

So the number of complaints according to the FRSB report are:
2010: 2,360
2011: 2,877
2012: 5,555

But the volume also increased, and that's an important measure of complaints - you can't judge any change in number of complaints without knowing how many more people are being exposed to the medium. I believe the FRSB report is meant to be a measure of quality, rather than a measure of complaints, so we need volume.

Number of approaches on the doorstep were:
2010: 31,266,863
2011: N/A
2012: 43,617,913

Unfortunately, there is no figure for the 2011 approaches and this is part of the problem.

We don't know how much volume increased by from 2011 to 2012, so it's impossible to tell if the 93% increase in complaints is in-line with the increase in approaches. So instead it's tempting to compare the 2-year increase from 2010 to 2012...so let's do that.

In 2010:
31,266,863 approaches generated 2,360 complaints. Meaning every 13,249 approaches generated a complaint.

In 2012:
43,617,913 approaches generated 5,555 complaints. Meaning every 7,852 approaches generated a complaint.

So over two years the drop from 13,249 to 7,852 actually represents a 59% increase in the rates of complaints. [1/(13249/7852)].

But that's over two years. If the increase was linear then you'd actually be talking about a 26% increase year on year. So door-to-door complaints increased by 26% from 2011 to 2012...not doubled.

Compare that to unaddressed mail: Complaints went up 59% while volume DECREASED.
Compare that to telephone: Complaints went up by 64% while volume only went up by 15%.

Now those are 'massive hikes'. Where's that headline?

I'm not saying there's no problem with door. Of course there is - a 26% increase is a huge problem. Of course it can be improved. Of course charities are turning to poorer quality agencies because they're desperate for volume. Of course more 'marketing agencies' who don't know what they're doing are testing the water because they see such a huge demand. Of course the demand to deliver a lower cost donor has meant lower wages and more pressure on fundraisers. All of this contributes - that's not what this post is about.

This post is about statistics. And door-to-door complaints didn't double.