Horse charity claws back cash from the tax man to bolster donations

The BHS is the UK's largest equestrian charity with 71,000 full members and promotes equine safety, bridleway access, riding establishment standards, and the health and well-being of horses.

The charity decided to act swiftly following the announcement this year by HMRC on changes to the rules on Gift Aid donations taking effect in April 2010, which involved a compressed deadline and potential for a fine.

Through Gift Aid's tax reclamation scheme, which essentially enables charities to claim back taxes already paid by donors on a contributed amount, organisations can add an extra 28 pence for every £1 donated.

HMRC announced that the time charities have to reclaim taxes on donations would be cut by two years - from six to four.

Stephanie Hendley, senior executive for membership at the BHS, notes: "Gift Aid is vitally important for the British Horse Society - a huge income generator - and we really needed to continue to tap into that."

The contact procedure for a telephone campaign was complex, requiring the call agents to create an auditable record of contact with every BHS member for whom Gift Aid is applicable. This was to ensure that each member contacted was properly briefed on how the scheme works and made an oral declaration agreeing to its terms.

Otherwise, if HMRC auditors found that the records were not in order, the charity would have to repay the money - and from April 2010 onwards also pay a fine. So it was crucial that the contact programme be set up and run in precise accordance with the rules.

With such complex procedures and contact dialogue necessary, the BHS required that the call centre agents have a firm understanding of how the charity and the Gift Aid scheme worked and that they be adept at engaging in off-script discussion.

The solution
To meet this brief while executing a high volume of activity, the BHS worked with Blueview Group to develop a bespoke approach to the Gift Aid initiative.

The first phase involved the launch of a phone campaign followed by a letter confirming the contacted member's oral declaration in order to satisfy the strict rules of the HMRC programme.

The decision to use telemarketing was taken because it provided a quicker way of reaching the members - a mailing would take more time and would be dependent on response that required filling out a form and posting it back.

A secondary aim of the campaign was to get people to buy into the idea behind the BHS. The campaign had to have an educational component, as the charity wanted to reinforce an understanding of what the organisation is about.

Blueview worked with the BHS to develop an approach that highlighted the charity's work on safety, advocacy for bridleway access, promotion of horse welfare, and monitoring of standards at riding establishments - so that members understood how their donations were being used and felt that signing off on Gift Aid was worthwhile.

The team did not work from a set script but adjusted the dialogue for each member contacted as the conversation took shape.

The only scripted element was the explanation and questions relating to Gift Aid, which was standardised throughout the process to ensure BHS compliance with HMRC's strict requirements.

The typical approach started with the BHS story and went on to include an educational component about Gift Aid and an explanation of the HMRC issue, followed by the scripted compliance questions.

The dialogue would close with the agent asking the member for any other input or questions and how they would prefer to be communicated with in future.

The results
The first phase of the Gift Aid campaign managed to generate £27 for each £1 the charity spent contacting donors. This initial phase cost the charity £3,277 and generated revenues in excess of £88,480.

Overall, 66% of the members contacted agreed to participate in Gift Aid with a further 4% able to take part on a partial basis (only for certain years).

Fewer than 8% said no outright to participating in the scheme and the remainder did not meet the tax requirements. 

After phase one of the campaign, the BHS increased its telemarketing activity.

A month into phase two of the Gift Aid initiative, the tally reached more than £318,000, and the BHS has since launched a secondary campaign through Blueview aimed at contacting lapsed members to increase revenue from other sources.

Says the BHS's Hendley: "We're really pleased with the results that we're seeing. We're also very happy with the team and the way that they're communicating with our members."

Graham Ede runs customer management agency Blueview