All around the world, tax rebates - or sometimes government funding that matches your donations[1] - are used to encourage people to donate more to charities and causes. It’s a powerful way to inspire generosity and shows that private donations are truly valued in helping to build strong, vibrant communities.
In the New Zealand context this looks like a 33% rebate on eligible donations (up to the level of tax paid). This rebate on tax can influence giving in two ways: encouraging larger donations, and encouraging the gifting of the rebate itself.
Curiously however, while the New Zealand government has developed this generous 33% rebate for giving, lifting any ‘cap’ on donations in 2008, they also do not promote it. This seems like a bit of an ‘own goal’ to me, when you consider that the purpose of this policy is to stimulate private giving which would ease the pressure on the increasing demands for government to fund into communities.
This is why, at the start of each year, community foundations run Give and Get Back campaigns in communities nationwide.
The message is pretty simple. Make a donation – direct to a charity or community foundation fund – and receive 33% back (which you can claim through the IRD website). In effect, the government is contributing 33 cents in every dollar to boost the causes that you care about, and this can have the effect of boosting government contributions to your region[2].
Workplace or payroll giving is even simpler, as the rebate is calculated at the moment of making the donation: i.e. if you give $15, only $10 comes out of your take-home pay, with the remaining $5 paid via your taxes.
This makes workplace or payroll giving much simpler than making donations yourself and claiming the rebate at year-end – and you get the benefit immediately with each pay.
One of my favourite examples of workplace or payroll giving comes from Sunrise Foundation in Gisborne. A group of Turanga Health employees joined Sunrise Foundation’s Workplace Giving scheme in 2015, donating to the community foundation every payday, through their payroll system. Some give as little as $5 a week, and to date the total amount donated by staff members has grown to a whopping $80,000, to be invested for the future of Gisborne-Tairāwhiti. Currently, 23 generous staff members give to the fund, and by all accounts, they are very proud of it.
Some of the Turanga Health team who give through Sunrise Foundation’s Workplace Giving Programme – (L-R) Tiffany Jefferies, Violet Crawford, Kay Walker and Laura Biddle.
Giving a little bit each week – even as little as $5 - really does make a big difference! And as well as the measurable community benefit, giving can also be a great team building, collective effort, boosted by the government.
Why not give workplace or payroll giving a go? It’s an easy way to give, and the tax back element helps you to supercharge your donations into your local community.
[1] For example, Gift Aid in the UK, which provides a 25% boost for charitable donations.
[2] This only works if your employer offers payroll giving and files their payroll electronically and the donation must be to an IRD-approved organization.
Inland Revenue offers two convenient ways to claim your tax credit – either by submitting copies of your donation receipts electronically throughout the year via your ‘myIR’ account, or by filing the tax credit claim form (IR526) from April of the following year. And here's a bonus tip: If you've missed claiming tax credits for donations in the past, the IRD allows you to go back up to four years, covering tax years 2022 through 2025. See more at the link here.
Article written by Eleanor Cater CEO of Community Foundations Aotearoa New Zealand
