A new report has revealed significant potential for growth in people giving directly to charity through their pay packets.

A study of payroll giving by the Charities Aid Foundation (CAF) found only 1.9 per cent of under-30s in employment give through their payroll compared with 4.5 per cent of employees aged between 30 and 49.

Under the scheme, introduced in 1987, employees can arrange for their employers to make charity donations from their gross pay before tax is deducted.

In 2011-12, £118 million was given to good causes by 735,000 people through their payroll, equivalent to three per cent of employees.

Overall, the number of people giving through their payroll nearly trebled between 1999 and 2003, boosted by Government-backed campaigns to promote payroll giving.

The CAF report looked at trends in payroll giving over its first 25 years. It said that reforms were needed to make payroll giving schemes fit for the internet age and that a fresh drive was needed to bring payroll giving to a new generation and encourage employers to offer staff the chance to give through the payroll.

CAF, which runs the CAF Give As You Earn scheme, helping more than 3,000 companies and 400,000 staff to give nearly £80 million to charity each year, has now launched the Growing Giving campaign to encourage younger people to donate.

Payroll giving is a simple, straightforward way for employees to support the charity of their choice and it is certainly worth charities considering promoting this as an option as part of their fund-raising activities.

For charities that may be looking for ways to reduce overheads, Milsted Langdon’s outsourced payroll bureau also offers an efficient, cost-effective alternative to operating an in-house service, which can free up valuable time and resources for their priority activities.

For further information, please contact us.