Sunday, January 31, 2010
According to the Guardian, charity shops have found a clever way of getting Gift Aid out of donated items: if they run a scheme where they sell your items as your agent, then you can agree to donate the proceeds and Gift Aid adds 28% or 25% or whatever it is at the moment (src). The rules are a bit tricky, though, and the article says that legally, sale proceeds may only be donated after the sale has been achieved. This gives rise to a real, if slight, danger of people using charity shops as a quick way to get a sale from which they benefit. Oxfam, in order to mitigate this danger, charges a commission rate: a derisory 1%.This gives me an idea. Why don't charity shops ditch the worry and act entrepreneurially? A charity shop could sell donations, as usual, but it could also offer a commission-based approach where they'll sell second-hand goods and apply a commercial commission rate. It sounds odd, but think about it.It's clearly legal, as Oxfam are already doing this. Since people have to donate items and give up all the proceeds, you don't attract as many items for sale as you might. By offering to split the proceeds, the charity shop can attract more items for sale. This is a benefit to the donor, who doesn't have to give up the entire value of the items unless they want to. It is a benefit to the charity, which has an increased income base and improved customer offering. It is a benefit to the customer, who has a wider range of products to choose from.Obviously the person who commented on the article saying, "any individual who exploits the current 'agency' arrangement for personal gain deserves to burn in hell for eternity," would disagree, but apart from that rather simplistic view of how charity shops can raise funds more effectively, am I missing something?