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The donation process
Localgiving is the only online giving platform that allows unregistered charities and community groups to benefit from Gift Aid. We facilitate this through a unique donation journey, where donations are made to one of our partner Foundations, before being passed on as an unrestricted charitable grant to the group in question.
Here's a simple step-by-step guide to how it works:
- A person decides to make a donation to a group registered on Localgiving. When they go to the donation page, they will see text displayed that explains the donation is being made to a Foundation on behalf of the group: "Your donation is made to Localgiving Foundation and they pay the funds to your chosen charity"
- The donor chooses the amount that they would like to donate and makes their payment. They are then asked if they would like to claim Gift Aid. If so, they provide the relevant details and Localgiving then processes the Gift Aid claim with HMRC on behalf of the relevant Foundation.
- The donation is processed by Localgiving, subject to payment processing fees. The donation may be subject to a 5% commission if the donation is over £200 and the donor has opted out of covering the fee. Localgiving transfers the remaining amount, before Gift Aid (including match funding, where applicable), to the group as a charitable grant. This is done on behalf of the Localgiving Foundation. Funds typically reach the charity's bank account within 2 - 3 weeks.
- HMRC processes the Gift Aid claim. A 5% fee is deducted from the total Gift Aid amount, and the rest is passed onto the group on behalf of the Foundation, as a charitable grant. This typically takes around 6 weeks to reach the charity's bank account.
A £10 donation turns into £12.37 with Gift Aid. After fees, a charity will typically receive £11.98* If Gift Aid is not claimed, the charity will typically receive £9.61* from a £10 donation.
Monthly Direct Debits are processed by GoCardless, who charge 10p per transaction (*depending upon payment method used).
Donations Over £200
Donors are asked to pay a voluntary tip to Localgiving on donations under £200. Donations over £200 are subject to a 5% fee which is either deducted from the total amount of the donation or covered by the donor. All fees retained by Localgiving are used to cover the cost of maintaining a secure online donations service
Gift Aid claims are subject to a 5% standard fee.
1.9% + 20p is the fee for UK debit cards, please note that charges vary depending on the payment method. More details can be found about payment processing fees here.
A £10 donation turns into £12.50 with Gift Aid. After fees, a charity will typically receive £12.11*. If Gift Aid is not claimed, the charity will typically receive £9.74* from a £10 donation.
We are constantly working to keep our fees as low as possible in order to ensure that as much of each donation reaches the charity as possible. Localgiving is not-for-profit and any fees taken go towards covering operation costs.
If you’re a UK tax payer, Gift Aid can top up your donation through Localgiving by 25% at no extra cost to you. Gift Aid is a government scheme allowing charities and community groups to increase the value of donations made to them.
Gift Aid makes a huge difference to small charities, but if a charity isn't registered with the Charity Commission or HMRC, it can’t claim Gift Aid. In addition to this, many smaller groups don't have the time and resources to process the required paperwork for Gift Aid claims.
At Localgiving, we take care of the claim process on eligible donations, so charities and community groups can concentrate on the great work they do. Our unique donation journey means that we are the only online giving platform that also enables unregistered groups to benefit from Gift Aid.
How Gift Aid works
Gift Aid is a UK Government initiative that allows tax relief on money donated to UK charities.
Gift Aid lets charities reclaim the basic tax rate for a total of 25% on every donation. This means that for every £1 donated, HMRC provides an additional £0.25 supplement. Please note: tax rates are subject to change.
Through Localgiving, when you choose a charity or community group to support, your donation is made to the supporting Foundation which is registered with HMRC to claim Gift Aid. This means that even a group that’s too small to register as a charity can still benefit from the added value on your donation.
Extra relief for higher rate taxpayers
If you pay a higher rate of income tax, your donations may be included in the allowances on your tax return. This means that your donation costs you 20 - 25% less.
Gift Aid rules
To qualify for Gift Aid, a supporter must:
- Be a registered UK tax payer
- Be donating their own money (not money collected or raised offline, or money donated on behalf of someone else)
- Pay enough income tax and/or capital gains tax to cover the amount reclaimed by all charities and CASCs donated to in this tax year (VAT and council tax do not qualify).
- Confirm that the donation is for the general use of the charity and will not in any way directly benefit the donor or their family (membership fees do not normally qualify for Gift Aid)
- Provide personal details for their Gift Aid declaration