New partnership with TaxGift to make donations go further

A new partnership between crowdfunding platform Givealittle and TaxGift is helping generous Kiwis stretch their donations further at a time when many charities are facing an income crunch.

TaxGift provides a platform for charities to offer donors the ability to gift their tax credits, and this partnership will see donors via Givealittle now have the option of re-gifting their 33% tax credit to the charity to which they originally donated.

The option went live on Givealittle in early September and 370 donors opted in in the first week. Those donors had contributed a collective $26,000 in donations to charities on Givealittle in the same timeframe, meaning those donations may be amplified by 33% in the next 12 months and up to 48% in the next three years, as the donations and tax credits continue to cycle through. With a significant amount of annual eligible tax credits going unclaimed from the Inland Revenue, both Givealittle and TaxGift say the partnership will make it easy for donors to re-gift their tax credits and widen the revenue stream for charities.

Givealittle General Manager Mel Steel says, “This partnership and its initiative is great news for charities, especially given the current climate and the months-long disruption to their usual fundraising activities. This means that for every donation they get on Givealittle, they have an opportunity to benefit further off the original donation. This is an ideal alignment of the platforms and access Givealittle and TaxGift have separately cultivated, and a terrific option for Kiwis to give more at no additional cost to them or their chosen charities.

“With Kiwis having donated $5 million to charities via Givealittle in the past year, that is around $1.67 million that is able to be re-gifted by those donors collectively in the first year. Then $557,000 the year after that, and so on. Everything that is re-gifted to charity over $5 is eligible for a tax credit, so the upside for charities and the important community work they do is significant. We encourage donors to opt in and give that extra boost to charities from money they have already donated.”

An example of how the partnership works:

  • A donor gives $100 to a charity via a Givealittle page.
  • The available tax credit is up to $33.33, received as a cash refund.
  • The $33.33 is donated to the same charity when the donor’s tax position for the year is finalised. This results in a further tax credit of $11.11.
  • $11.11 becomes an additional gift actioned in the following tax year, resulting in a further tax credit of $3.70 – an amount which is below the $5 minimum threshold to trigger another tax credit, so the benefit of the re-gift choice ends.
  • What this means – over three years, from an original donation of $100, the donor’s total gift to the charity is $148.14, at no additional cost.

Hannah Andrews, Managing Director at TaxGift, says, “We are pleased to announce this partnership with Givealittle, which will make the impact of giving go even further. The process is simple – when a donor donates to a charity through a Givealittle page, they can also opt in to automatically donate their tax credit for the benefit of the same charity. It really has a significant impact for the charity and helps individuals to give more at no cost – only forgoing the opportunity to claim tax credits that we know are often left unclaimed. With many charities cancelling events through Covid-19, it has been great to be able to offer charities a new digital donation channel via TaxGift.

“For charities and donors, it’s money for nothing – donors are re-gifting from their original donation, and charities don’t have to put precious extra resources into fundraising. We want every donor who uses the Givealittle platform to be aware of this service, and we are asking charities to help by promoting it to their donor databases – let people know, and we can increase the uptake and re-gift those millions in tax credits to worthy charitable causes. We are hoping New Zealand donors adopt the solution at a rate that is similar to the equivalent Gift Aid scheme in the United Kingdom, where approximately two-thirds of donors gift their tax credits.”

Fact Sheet

  • The threshold for a tax credit on a donation is $5 or more. A donor must be a New Zealand tax resident who has paid income tax in the relevant tax year in order to claim a tax credit.
  • TaxGift is a simple and secure process integrating with Inland Revenue to claim a tax credit as a donor’s tax agent. TaxGift receives the refund on the donor’s behalf and donates it to their originally chosen charity via Givealittle. This means the original donation is amplified by 33.33%, being the tax credit amount, and is magnified further as each subsequent qualifying tax credit is re-gifted to the original charity through subsequent financial years, up to approximately 48% of the original donation.

More information about the Givealittle-TaxGift partnership can be found here.