How shall we design the donation pathway?
Luke Flegg
Public
Seen by 291
When a gig is completed (or when it's booked, depending when we invite/require users to donate pay) money will be donated - but to who / how? :moneybag: :money_with_wings:
For example, regardless of how it appears to the user, we must decide whether the money goes into our account first, or to Help Refugees (or somewhere else?)
What payment processor(s) do we want to use? etc
Best case scenario
Payment user journey
Google Doc for listing various potential donation pathways: for sharing with legal/finance/tech experts so they can help us work out the MOST ideal of them:
https://docs.google.com/document/d/17q-3zQZ_ABspK2j_EUBVTkBtdIoa0ZHo6V3JFg2luYY/edit
What does 'ideal donation pathway' mean?
Hirer clicks Pay button & pays - quick and unconfusing!
* If they have payment processor (PP) account > Enter password > Pay
* If they don’t have PP account > Create one > Pay
* Or - Use guest account (enter card details etc, but system will forget you)
* It’s very clear how much of their money reaches who
No fees are taken by payment processor
* I think PayPal for example (and Stripe?) both offer fee-free charity donations?
Gift Aid is added
* Ideally to the whole value of the gig (so a £10 gig results in £12 reaching causes)
Dignity is not taxed for receiving donations
* Since we’re Pay As You Feel (and everyone is free to pay nothing) we hopefully don’t have to be taxed?
Minimal admin for us / Help Refugees
* Nice clean, simple accounting
Resources to reference
• Alfred's Google doc "Accounting system for donations"
• Phone call with Bryony (I recommend downloading rather than streaming)
Andrew Evans
Tue 25 Sep 2018 8:04PM
With PayPal already built in, seems like a good option. Question, money raised by gigs will be considered 'income' which dignity will be taxed on?
Andrew Evans
Wed 10 Oct 2018 1:23PM
With PayPal already built in, seems like a good option. Question, money raised by gigs will be considered 'income' which dignity will be taxed on?
Update: I'm still a little unsure how we will be taxed for using this approach?
Luke Flegg Wed 17 Oct 2018 11:33AM
@andrewevans just checking you saw this ^
I'm also wondering what (if anything) is stopping us from moving money from Dignity to one of us (say me) and I then make the donation to the charity, accruing Gift Aid.
I guess I would just need to make sure I don't try to claim more Gift Aid than I'm eligible for?
Not sure if there's a way I can avoid getting sunny with income tax on that though 🤔 maybe this is what Prism Gift Fund is set up to help with.
Luke Flegg Sat 29 Sep 2018 1:28PM
@pasco and all, question: What do you think of us doing as agreed here but adding a step: one of us transfers the paid money from Dignity to our personal account (I guess in the future, on a larger scale, this would probably count as income, legally?) then as an individual we make the donation to the charity, and Gift Aid would apply?
Is that legally dangerous to do at this early stage?
Pasco Mon 1 Oct 2018 5:19PM
I'm not convinced this is a good idea... for now or the future. Legal implications are probably complex and it feels very messy.
Gail Bainbridge Thu 18 Oct 2018 6:53AM
Donations to registered charities are a tax deductible expense. Businesses cannot gift aid donations because they have had the tax deduction. Gift Aid is a mechanism whereby tax paid by the donor is handed over to the charity. In a business no tax has been paid. Also you cannot legally transfer funds from a business account to a personal account unless it is salary or dividends. You guys need an accountant - speak to John Thacker at Chariot House he’s a great guy with tonnes of charity knowledge!
Luke Flegg Thu 18 Oct 2018 8:11PM
Thanks Gail! I'll reach out to John :) Really appreciate you popping in!
Luke Flegg · Wed 26 Sep 2018 12:07PM
@andrewevans as I understand (from Pasco/ what Pasco relayed from Steve from HMRC) we wouldn't get taxed on the incoming money from Hirers into Dignity's PayPal/ Metrobank account because we'd offset 100% of it as an expense.
I was a little surprised about that because I thought it was impossible to 'pay' a charity. I thought you could only donate to them. So maybe we are donating, but a donation can be considered an 'expense' even though it's not paying for anything. @gailbainbridge might know more - no pressure to chip in Gail! Only if you want to share any thoughts!
@alfredseni . Fingers crossed Bates Wells Braithwaite legal will get back to us with pro bono advice on this!
Either way, this still feels to me the best way to start for now