The impact of Covid-19 on charities: How Hague’s donation processing solution is supporting the organisations that continue to support those in need.
For thousands of charities, the start of the pandemic forecasted a rapid decline and a grim future. With regular fundraising events and activities having to be cancelled, along with the knock-on-effect of staff being furloughed or even losing their job, the impact of the pandemic has made it even harder than ever for charities to source donations and reliable funding streams, and then find the time and resources to manage donation processing effectively, (whilst still trying to work from home!).
Like many businesses around the world, charities have been forced to think on their feet. Aided by technology, the day-to-day operations along with their service offerings and fundraising have moved online in a rapid ‘digital transformation’. Despite the bleak prediction, charities have had to show a huge amount of resilience and adaptability throughout 2020. Quite a challenge, especially when a significant part of their income arrives by post.
What is now clear is that, moving forward, charities will need to maximise their funding potential from a variety of sources and reduce operational costs where possible to bounce back confidently from the pandemic.
Funding, Grants and Gift Aid: A 3-point look at the charity finance landscape.
- Government funding
In April 2020, the UK government announced a total of £750 million in funding for charities. This sum, while substantial, is only a fraction of the total funding required to keep UK charities afloat.
- Activities and events
A large proportion of a charity’s finances comes from their fundraising activities, events, and donations and it was this which was most critically hit by the pandemic. This income allows for them to continue supporting vulnerable people and the community without restrictions.
- Gift Aid
The Gift Aid scheme allows for an extra 25p to be given by HMRC for every £1 donated. Often, Gift Aid schemes are neglected by charities due to the amount of time and resources needed to process each individual donor’s declaration.
How Hague is supporting charities to make the act of giving more efficient
The receipt of donations and the many items of associated paperwork, plus the bureaucracy around schemes such as Gift Aid can prevent short-staffed, time-poor charities from maximising the revenue from these income streams.
Our Solchar TJ software is proven to provide greater efficiency for charities, dramatically reducing the time and effort required for the prolonged process of logging, processing, filing, storing, banking and the need for accurate auditable record keeping.
Donation Processing and Cheque Clearing
The Solchar solution scans the returned appeal documents, vouchers, cheques, and any other items received – digitising, automatically capturing and coding where possible, and then, finally exporting all the data to your CRM system. No more filing and storing of the hard copy of your returned documents, saving your charity on this aspect of your operation instantly.
Also, with the Solchar system, rather than the time-consuming paper bank clearing process for cheques, our digital image-based system will potentially enable a rapid improvement when it comes to Cheque banking. That’s because the Solchar facilitates the ability to automatically deposit your cheques into the UK ‘Image Clearing System’ – subject, of course to this being supported by your clearing bank.
The Hague ‘Solchar’ system converts the banking information into an encrypted industry standard transmission code, which can then be transferred digitally into your bank, or directly into the Image Clearing System, (ICS) to trigger the payment of funds within a two-day cycle.
If you pay a cheque on a weekday, the ICS scheme supports the ability for you will be able to withdraw funds by 23:59 on the next normal weekday.
The Solchar solution allows your charity to realise funds that much sooner, allowing you to put the donations to work quicker than ever before.
Automating Gift Aid with Gift Aid processing from Hague
As an alternative to manually managing each gift aid declaration, the Solchar software automates the capturing of Gift Aid Declarations and the processing of the data necessary, providing an instantly retrievable image and data archive, saving time and money, (and keeping your HMRC auditor happy).
For further reading on Gift Aid processing, the Gift Aid scheme and simplifying the processes with our help, please visit our blog; Is manual Gift Aid processing costing your charity?
How Hague is delivering tangible benefits for charities
Our Solchar TJ software provides a scalable solution for small and large charities alike and presents many benefits including:
- Saves time and expense of processing of donations and associated documents received.
- Provides an instantly retrievable image and data archive of all items processed.
- Saves the costs associated with the filing and storage of paper items, and retrieval of any items when required.
- Reduces the time required to ensure tax compliance and the risk of falling foul of HMRC auditors (which could result in a temporary ban from receiving Gift Aid).
- The Cheque, Voucher receipt and banking process is simplified, allowing items to be banked on the same day as having been received.
- Reduces the administrative burden of banking paperwork.
- Improves cashflow and allows funds to be accessed much faster.
- Potentially, avoids the need to visit a bank to deposit cheques.
- Potentially, eliminates the cost of courier collection of cheques.
- Supports the import of electronically received documents and data files, all part of a highly specialist document management service that’s head and shoulders above many other solutions out there.
Throughout 2021, charities will continue to evolve as fundraising and services provided are continually offered online. Hague is playing its part in making the act of giving an easier journey for the charities we work with.
Find out more about how Solchar TJ software can increase efficiency, improve cashflow and reduce costs for you charity or contact us for more information.