Gift Aid is worth 25p for every £1 donated. For a charity receiving £200,000 in eligible donations per year, that is £50,000 more income from HMRC. Many charities still lose some of that money. Their systems do not keep the Gift Aid declarations properly. Claims go in late. Some donations that qualify are never claimed. This article covers three things. What donor management involves. How a Gift Aid claim works in practice. What your software must do to handle both.
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Donor management is often reduced to "a contact list with donation history." In practice, it is substantially more complex. A charity's relationship with each supporter involves multiple data points, and the software that manages those relationships needs to track all of them reliably.
Most off-the-shelf CRMs handle the first two or three of these well. The rest often requires workarounds, custom fields, or separate systems. For how the main products compare on Gift Aid and fit, see our charity CRM head-to-heads.
Gift Aid lets a charity claim 25% more on a gift from a UK taxpayer. The donor must have paid enough UK Income Tax or Capital Gains Tax in the relevant tax year to cover the amount being claimed. The charity must hold a valid Gift Aid declaration from the donor.
A Gift Aid declaration must hold four things. The full name of the donor. Their home address. The name of the charity. A statement that they want the charity to treat the gift as a Gift Aid donation. That statement can also cover future gifts, and gifts from the last four years. The donor must confirm they are a UK taxpayer. Declarations can be made in writing, online, or verbally (if the charity keeps a contemporaneous record).
There are two routes for submitting Gift Aid claims to HMRC:
HMRC audits of Gift Aid claims reveal consistent patterns of errors. Each one costs the charity money, either through rejected claims or through eligible donations that were never claimed.
In February 2026, the UK's data protection framework was updated to include a "charitable soft opt-in" for donor communications. This brings charity fundraising communications closer in line with the rules that have long applied to commercial marketing.
Previously, charities needed explicit opt-in consent for all electronic fundraising communications (email, SMS). The new soft opt-in lets a charity email or text a current supporter without their consent first. Three conditions apply. The charity got their details when they gave, or did something similar. The charity gave them a clear chance to opt out at that moment. Every message after that also carries a way to opt out.
Your CRM must now hold more than the opt-in itself. It must hold how you got the contact details. It must show whether the soft opt-in conditions are met. This requires:
Most CRMs are updating to handle this, but the quality of implementation varies. Check that your system distinguishes between explicit consent and soft opt-in, and that it tracks the conditions under which each contact was added.
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Gift Aid rests on one thing. If HMRC asks, you must show that a named donor made a valid declaration, on a date, for the gifts you claimed against it.
Most charities hold that as a scanned form, or a tick in a spreadsheet. Both are records a person can write, so both are records a person can change. A claim that rests on them rests on trust in your own filing.
On engage.re a declaration is a record with a permanent identifier. Every action on it goes to a signed log. The log is hash-chained, so nothing can be added or removed later without breaking it. The link from the declaration to each gift you claimed is therefore part of the data, and not a report you build afterwards.
The same holds for the soft opt-in. The system records how you got the details, and when the donor was given the chance to opt out. We explain why one shared foundation makes this normal, and not expensive, in bespoke software for a whole sector.
Donor management is not a static record-keeping exercise. It is the infrastructure that supports a journey from first contact to long-term partnership. Some charities have joined-up systems, and use their data to guide how they talk to donors. Research keeps finding the same result. They keep 15 percentage points more of their donors than charities that work by hand, with separate tools.
How donors first engage with the charity. Online donation forms, event registrations, crowdfunding campaigns, and peer-to-peer fundraising all generate new contacts. Your software needs to capture these reliably and attribute them to the right source.
Building the relationship from a first donation to regular giving. That needs three things. Groups, so that not every donor gets the same message. History, so that each message knows what that donor has done. Timing, so that you ask at the right moment, and not too often. Software that supports automated thank-you messages, targeted appeals based on giving history, and event invitations based on interest areas makes cultivation possible at scale.
Keeping existing donors is more cost-effective than acquiring new ones. Lapsed donor identification, renewal reminders for annual gifts, and regular impact reporting all contribute to retention. A good CRM marks a donor who has not given for 12 months. It marks one whose regular gift has stopped. Fundraisers can then act before the donor is gone.
Legacy income (gifts left in wills) is the fastest-growing income stream for many UK charities. Legacies accounted for over £4 billion in charitable income in recent years, yet many charities track legacy intentions poorly or not at all.
What software needs to handle for legacy giving:
Most fundraising CRMs have some legacy tracking capability, but it is often an afterthought. The fields exist, but the workflows to support meaningful legacy stewardship are typically absent.
The challenges described above (Gift Aid tracking, GDPR compliance, donor journey management, legacy stewardship) are all solvable with off-the-shelf tools, but usually require compromises. Declarations are tracked in custom fields that do not integrate with the claim submission process. GDPR consent is recorded but the soft opt-in logic is not automated. Legacy pledges are noted but not stewarded systematically.
A bespoke system can be built to handle all of these as first-class features. Gift Aid declarations linked directly to HMRC submission via the Charities Online API. GDPR consent tracking with automated soft opt-in logic. A legacy pipeline with stewardship workflows and risk alerts. Donor journey stages that match the way your fundraising team actually works, not a generic template.
Whether this makes sense depends on the scale and complexity of your donor relationships. For a fuller analysis, see our charity software guide.