Talk of payroll giving (PG) has the most peculiar effect on the majority of CSR managers: it starts with a slow rolling of the eyes, moves on to shoulder shrugging, and wraps up with a resigned nod of the head. The resemblance to facing a longdelayed dentist visit cannot be missed.
A new report from the Giving Campaign sets out to calm corporate qualms. First off, they’re keen to show PG isn’t root-canal work. Almost eight out of ten companies with payroll giving schemes find them easy to run, with even more saying it’s simple for staff to join. Nor do PG schemes represent an unreasonable cost burden. Half of the companies surveyed found them cost effective to run, not least because day-to-day management can be outsourced to the major agencies such as CAF and Charities Trust.
The introduction of various tax incentives in the April 2000 budget, which basically amount to the scrapping of the £1,200 annual donation limit and the addition of a 10% supplement on all donations, has certainly boosted PG. (For chapter and verse, see the Inland Revenue site: http://www.inlandrevenue. gov.uk/payrollgiving). In practical terms, it means that if an employee pledges £10 from their gross salary, it only costs them £7.80 (at the 22% rate of tax) or just £6.00 (at the 40% rate of tax), but the charity actually gets £11 once the income tax relief and the 10% topup from the Government has been added.
And the headline figures look encouraging. The amount generated through payroll giving has nearly doubled over the last two years, from £37m in 1999/2000 to over £72m in 2001/2002.
PG is clearly good news for charities and painless for donors. But what about the company interest? Is PG something that companies are expected to do regardless, or are there some wider business benefits that can be levered? This latter question is one that the Giving Campaign valiantly attempts to answer. Improving company image (61%), enhancing community involvement programmes (58%) and supporting employee volunteering (40%) are the most frequently reported benefits.
What is really interesting, however, is the difference in perception between those companies with active PG schemes and those that have non-existing or dormant PG programmes. For instance, seven in ten of those companies that have more than 5% of employees involved in PG strongly agree that it has an impact on company image and community involvement. None of those companies with a 1% take-up or less believed any such impact exists. Increasing participation So, if the advantages only begin to materialise when PG schemes are actively supported, then the nub of the debate comes down to how employers can generate interest among their staff.
Looking at what is stopping employees running to the proverbial dentist surgery is an important starting point. In part, the problem is one of awareness. Many employees have simply never heard of PG or, if they have, they don’t know that their company offers such a scheme or how it works. Respondents to a recent survey by Numerica, the professional services group, are on record as saying that “wanting to give regularly” dissuaded them from PG! It’s an image issue as well. Selling PG by its fiscal merits in a round-robin email has your average employee reaching for the delete button.
Looking at those companies with an above average participation rate (judged to be around 5% or above), the single common denominator appears to be an ongoing communications strategy. “You can’t inform staff too much about payroll giving,” says Jerry Marston, community affairs director at Whitbread, which has a 12% take-up for payroll giving. Popular communications tools range from brochures and emails, to poster campaigns, induction packs and information on pay slips. Presentations, company newsletters, dedicated space on the intranet and desk drops all add to the communications mix.
Like any promotional campaign, finding creative ways to promote payroll giving is the hallmark of most high-participant companies. Littlewoods, for example, is planning a six-week ‘Payroll Tour’ around its major sites in the lead up to Red Nose Day, the focal point of its campaign. The promotion looks to engage employees with competitions, incentive gifts and major prizes, in addition to high-energy presentations in canteens and breakout areas.
A two-week PG campaign by Boots shows how a company can effectively outsource much of the promotional work to the charities themselves or a fundraising organisation, in this case Sharing the Caring. Based at Boots’ Nottingham site, representatives ran display stands in canteens, gave presentations during team meetings, met staff informally at their desks and provided information to those staff working night shifts. Flyers were placed in office hubs and meeting areas. Posters, intranet announcements and direct contact with line managers helped further publicise the campaign, which had board-level backing from the group human resources director. 467 employees (6% of the workforce) made donations as a result.
In addition to a well-executed communications strategy, companies are also offering financial incentives to increase staff participation. Nearly three-quarters of the top 25 PG employers, for example, cover the administration fees for PG schemes – around 4% of the donation in the case of CAF. Four in ten also offer to match staff donations, often in the form of joining in with the government’s 10% surplus. The Royal Bank of Scotland goes the furthest, pledging £2 for every £1 donated by employees through its PG programme.
Even if, for arguments sake, Briefing readers were to see participation levels substantially increase in the near future, the question that still begs an answer is whether PG presents anything more than just an efficient way of encouraging greater philanthropy from the private sector?
Not that there’s anything wrong with philanthropy, but there are at least two ways in which companies can lever more from PG. Firstly, maximise its potential as a Human Resources tool. Anecdotal evidence suggests that participation in PG, or even an awareness of PG, can help bolster employee goodwill, increase staff morale, and improve recruitment and retention rates. Incorporating the Human Resources function into PG programmes and developing mechanisms to measure and evaluate employee attitudes with respect to PG are two vital steps to firming up the relationship between PG and HR. Secondly, PG is perfectly placed to act as a bridge between your company’s wider societal concerns and the willingness of your employees to engage with the outside world. In this way, PG can assist a company’s broader CSR concerns. Evidently this must not be done in a way that compromises the neutrality of payroll giving. But, with sufficient sensitivity, employees could be encouraged to think about supporting a charity that fits with the company’s main CSR concerns without resorting to prescriptive means.
Allowing representatives of selected charities in to speak with staff, listing charities affiliated to your CSR strategy in promotional material, or offering to match donations given to a shortlist of organisations, all represent legitimate mechanisms for linking employees into a company’s major CSR concerns. When companies begin to exploit the full potential of PG, then perhaps the managerial routine will move from reluctant to gleaming-toothed smiles. You never know!Contact the Business Development Unit on: tel: 020 7273 5393 email:business.development@dfes.gsi.gov.uk
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