People often need the money the may get back from any tax refund, but for those who may not need it, giving it to charity is a great way to support organizations, but how many know who to give it to, or how to do it?
One thing some people don’t know (surprising as it seems) is how to get money back that they maybe owed from IRD – perhaps education on this is needed, the endless ads on TV don’t seem to be getting through.
Charities could be doing themselves, and their supporters a favour by including something in their communications on reminding their supporters that not only that their support is needed, but also that their donations are tax deductable – and how any refund they get could be ‘on donated’.
How they do this needs some diplomacy and factual information being shared – one would hope organizations have the information and ‘tact’ to ask their supporters the right way if they would consider donating their tax refund.
To send a form with the charity details already completed is a little pushy and could backfire. Not only would an organization run the risk of the person not proceeding with the form, but they could also totally withdraw their support.
It would also be prudent for an organization to check with their accountant as to how tax-back donations are treated, the best way to manage approaches to supporters.
Inland Revenue also has information on their site about refunds, transferring any monies due.
When talking to supporters about donating any refund, it’s also a good time to remind them about Payroll Giving which allows someone to donate to approved organisations directly from their pay and receive immediate tax credits that reduce their PAYE payable. For more on this is available on the IRD website.
Organizations need to think about the different ways they can gain the financial support they need, and now is an ideal time to be talking with supporters, and others about the different tools available.
Have you asked your supporters to donate their tax refunds, are you actively promoting payroll giving as a means people can support, if so what feedback, response have you had?