Payroll Donating - Is it the way to go?

Do you raise an eyebrow when someone suggests payroll donating? Too hard! Doesn’t work. Or are you smiling like the administrators of PCYC in NSW (the old police boys club) which is reaping the benefits of a highly successful payroll deductions program!

PCYC can probably claim to be the charitable beneficiary of the oldest payroll deduction scheme in Australia dating back to 1937! Now it reaps an annual income of around one million dollars. Development Manager, Suzanne Greggery says its support base comes from the blue-collar employees in the manufacturing industry.

While the PCYC has a long established scheme she admits that she would hesitate setting up a new payroll fundraising scheme now because of some of the complications in operating one!

Charities in the United States, Canada and Europe all have well developed payroll fund raising programs. Australian charities so far have very little access to these funds. Until recently, when groups such as Earth Share Australia and Charities Aid Foundation and United Way began offering ways to simplify the process. Earth Share Australia, a branch of one of the most internationally successful environmental ‘giving’ organisations, was established in 1997, and argues that payroll donating can raise millions of dollars in new income for charities.

Earth Shares Executive Director, Chris Harris says critics of payroll fundraising claim Australia does not have a culture of work place giving, but the key is to ensure that it addresses the needs of the employee as well as the employer . Earth Share Australia has already been working with State and Federal Governments to develop payroll-funding programs that will allow public servants to support environmental issues and any other charity of their choice. Currently, income is being received from public servants from 20 departments within the NSW Government.

A similar scheme is being prepared for Queensland Government employees. In the US, 40 percent of Federal employees donate to charities via the Government’s Combined Federal Campaign contributing a massive 250 million dollars! Harris says payroll donating must be seen as part of a work place partnership and it must be simple, flexible and cost effective. United Way has a community fund operating in the satellite city of Geelong outside Melbourne with a highly successful payroll donating scheme.

Employees from two hundred and fifty local businesses and dozens of schools and service clubs support one hundred and twenty local charities. The money generated from donations is going straight back into the community the employees live in. The Ford Motor Company at Geelong is seen as a showcase for successful payroll fundraising in Australia. It now boats a 70 percent participation rate by its employees.

But for every success there is still some cautionary tale. Anthony Lupi, the former Head of Community Development at Westpac says payroll donation schemes won’t work in isolation and companies must motivate, encourage and celebrate giving in a broader corporate citizenship approach.

Lupi has 20 years experience in corporate social responsibility programs and now heads-up Positive Outcomes, an advisory company on corporate community investment. He says Australia’s Tax and Industrial Relations laws make payroll donation schemes very difficult to operate unless the employer sets up a charity to handle the funds.

He says that’s where groups like Earth Share, Charities Aid Foundation and United Way are streamlining the process, and changing the culture of work place giving. On the Internet check out www.earthshare.org.au and www.unitedwayglg.org.au.