The Charities Aid Foundation says that more needs to be done to encourage younger people to donate to charity.
Hannah Terrey, head of policy and campaigns at CAF, says the government and employers should do more to encourage staff to use payroll giving.
A report, Insights Into 25 Years of Payroll Giving, published by CAF on Monday, shows that only 3 per cent of employees give to charity through the scheme. In 2011/12, £118m was given to good causes by 735,000 people through the payroll.
But only 1.9 per cent of employees under 30 give through the scheme, compared with 4.5 per cent of those aged between 30 and 49, the report found.
CAF has urged the government and the voluntary sector to work together to streamline payroll giving through technology.
According to CAF, the report shows that reforms are needed to make payroll giving schemes fit for the internet age and achieve the growth found at the start of the new millennium. Between 1999 and 2003, the amount raised through payroll giving rose from £42m to £115m.
The report puts this down to various government-backed campaigns to encourage payroll giving and says since then there has been “little innovation”, leaving donations relatively flat.
Hannah Terrey, head of policy and campaigns at CAF, said:
Payroll giving has massive untapped potential to encourage people to make a regular contribution to the causes people care about.
Many major companies and their staff take advantage of this means of giving, but we need to do more to encourage millions more to give. We need to recruit a new generation of employees to get into giving as they earn so they can build long-term links with charities and experience the joy of supporting a cause they care about.
There is huge potential to expand the numbers of people giving direct from their salaries. The massive increase in people signing up a decade ago shows what can be achieved.
The government is due to launch a consultation on payroll giving to look for new ideas to reinvigorate the scheme.
Source: Third Sector