Balancing the books
January 2010
The demise of the cheque in 2018 means charities must start converting supporters to other payment methods
The UK Payments Council’s exit strategy for the use of cheques, announced earlier this week [1], has been met with trepidation from some major charities who still receive a considerable number of donations this way.
Cheques will be phased out by 31 October 2018, as long as suitable payment alternatives are available, after being described as in ‘terminal decline’. However the drop in general usage of cheques has been less steep for charities than for other sectors; and many non-profits are reluctant to favour one method of giving over another – wishing to retain the element of choice in how supporters can donate.
At present around 20 per cent of donations to disability charity Scope arrive via cheque. The organisation thinks a transition to other methods of banking may prove especially difficult for disabled and older people, as the banking and financial system is still somewhat inaccessible to them.
‘It can be difficult for someone who uses a communication device to use face-to-face banking,’ said Jason Suckley, director of fundraising at Scope. ‘Often disabled people use cheques to manage their payments and the flow of money out of their accounts over a month, and while this can be done online and in branch that can be more complex and less accessible.’
Although noting that bank transfers could be viewed as less personal than cheque donations, environmental charity WWF maintained a generally positive outlook for the payment changeover. In a statement the charity commented that automated, paperless transactions would be better for the environment and would allow faster payments, taking less time to process in house and requiring the involvement of fewer staff.
The Charity Finance Directors’ Group (CFDG) has pledged its support to members who still receive a significant number of donations by cheque - Robert Chester, CFDG vice chair, described the balance between encouraging convenient donation methods and promoting efficient financial practice as a ‘tightrope’. The umbrella body will be issuing guidance to advise members on best practice to enhance the efficiency of their finance functions as well as researching what the impact of the change on the third sector may be.
Cheques have been around for 350 years, but their imminent departure is unsurprising to some. Scott Gray, managing director of direct debit processing bureau Rapidata Services Plc, thinks charities should make the most of the change: ‘Providing that charities are well prepared, this move is a positive opportunity to engage with supporters and convert them to more cost-effective means such as Direct Debit or Credit Card,’ he said. ‘Charities need to start thinking now about the implication to their campaigns if cheques were no longer available and make preparations or they may risk losing donations.’
Author: Claire Shropshall
Claire Shropshall is the editorial assistant for Charity Funding Report, Caritas, and Codicil magazines. Claire has a BA in English Literature and Philosophy from Birmingham University and a Postgraduate Certificate in Periodical Journalism from London College of Communication. She previously worked in Central America as a voluntary reporter for an English-language newspaper.
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