Playing catch-up on payroll giving

PAYROLL giving is emerging as a significant contributor to the not-for-profit sector with a growing number of Western Australian businesses implementing the donating mechanism, according to a PricewaterhouseCoopers report.

The ‘Giving Business: Creating Successful Payroll Giving Programs’ report found that, although the initiative is relatively new in Australia, employer participation in payroll giving has more than doubled since federal government tax changes in 2002 allowed gifts to be made from pre-tax income.

PwC’s report found that, if 10 per cent of working Australians donated $5 a week through their pay, an additional $260 million would be generated each year for the NFP sector.

Of the 280 responses PwC received from online questionnaires and phone interviews, 10 per cent of companies with payroll giving programs had an employee participation rate of 25 per cent or more.

But among the businesses without payroll-giving programs, almost two-thirds had not heard of the method before being contacted for the survey.

In the report, PwC chief executive Mark Johnson said demand for not-for-profit services had increased in the past year as the level of donations began to fall.

“Overall, payroll giving in Australia has grown steadily since the Australian government permitted donations made in this way to be deducted from pre-tax income, but remains far below the levels of the US or Canada,” he said.

But Mission Australia chief executive Toby Hall said payroll giving was gaining momentum in Australia because of the low fundraising costs associated with it.

He said it was an important development to the NFP sector as it provided a consistent donation stream to aid a charity’s long-term planning.

West Perth-based Cancer Council of WA is one such charity to embrace payroll giving, with employees from 20 different businesses involved with the charity through this funding method.

The council’s chief executive, Susan Rooney, said small- to medium-sized enterprises often did not have the capacity to implement such programs, so the council assisted their administration and payroll departments.

“What payroll giving essentially does is it gives you planned income that enables you to know exactly what funding you are getting and it then engages employees with your organisation’s cause,” she said.

Accounting firm Byfields has been involved in workplace giving at the Cancer Council for more than two years, with 40 staff at the firm’s Perth office participating in the program.

A team of workers from Ernst & Young also involved in the payroll-giving scheme recently assisted at a gardening day at Shenton Park-based Milroy Lodge, one of the Cancer Council’s accommodation sites for country cancer patients.

The 26-room lodge was designed to ease pressure on the Cancer Council’s existing country patient accommodation in Nedlands, Crawford Lodge, which has a waiting list of up to 400 people a year.

Verve Energy began participating in the Cancer Council’s workplace giving program in September 2009, with almost 100 employees collectively contributing about $1,000 a month.

Verve, which has 500 employees, directs these funds to pay for a country cancer patient to stay at Milroy Lodge for two weeks.

Verve corporate relations officer, Vaninka Vittiglia, said since the power utility launched its workplace-giving program, Verve Employees Giving Aid and Support in September, the number of employees donating to charities had grown from 61 to 93.

Ms Vittiglia said Verve would continue to match employee donations up to $2,500 a year.