A little history...
The system of donating 1% of personal income tax each year is a Hungarian innovation introduced in the mid-1990s. Several countries have adopted it, with the help of the NIOK Foundation, because we introduced it in many parts of the world at the time, and then each country has adapted it further to its own.
Historically, the system was first designed for 1% of the tax to be donated to churches, with NGOs as beneficiaries as a counterbalance, so that we can actually have 1+1% of our tax each year, with a church and an NGO of our choice.
Everyone who has tax to pay each year can take advantage of this option, and typically more than one and a half million people do so each year.
The biggest difference between the system of donations to churches and donations to NGOs is that we don't have to consciously renew our declaration to church organizations every year - so if I have once donated 1% of my tax to a particular church, I don't have to make a separate provision for them the following year, they will certainly receive that part of my income - unless I specifically provide otherwise. However, NGOs need to show up year after year and remind their supporters that this is how they expect their support over a set period of time.
The key to success - would it just be in the numbers?
Interestingly, this year more than 200,000 fewer taxpayers nominated NGOs and donated their otherwise wasted 1%, yet a larger amount of money was able to reach NGOs than last year, totalling some HUF 11 billion.
But what is the reason for the decrease in the number of declarations for NGOs?
What do we know about taxpayers?
Are the biggest taxpayers among the donors or could they still be successfully targeted by NGOs and thus have a perspective for NGOs both in terms of the number of donors and the amount of money they can donate?
Is it even worthwhile for a small organisation to participate in the competition that takes place in the communication noise of the 1% collection?
Here we have collected for you in 5 points why we think that the 1% collection can be useful and how it can give a sense of achievement to NGOs, beyond the small or large amount of money that can be added to their accounts in September every year:
“I'm here!" - the 1% tax collection is an opportunity to send a message to the members of society that the organisation exists, works, and can be counted on for its activities and services.
Social base building - strengthening the engagement of our own followers is a key priority for the 1% campaign, as they are the ones we can count on in this otherwise noisy campaign period, as they can be reached directly.
Building our database - our new tax pledgers who have given us their contact details should be part of our social base! Don't forget to ask NAV for the details of our donors and then thank them. Let's offer them a closer connection, for example by subscribing to our newsletter, where they will be automatically and directly informed about our 1% collection next year, but also about all our other important achievements, news, or by seeing our activities, they can become more active supporters in our organisational life.
Planning consciously - even for the 1% collection, it's worth being visible throughout the year and planning your communications so that you don't get caught out at the last minute and have your voice almost unnoticed by other organisations' campaigns.
Useful routine for fundraising - as 1% of the tax is a donation from the donor that does not take anything away from the donor, but is not wasted if it supports the often niche work of an NGO, it also makes it easier for organisations to dare to ask, to practice their call to action communications and to gain some routine in planning future fundraising campaigns
You can listen to the podcast in Hungarian here. The discussion was moderated by Balázs Gerencsér, Director of NIOK Foundation, and featured Ágota Scharle, economist, managing director of the Budapest Institute, and Andrea Sczígel, fundraising specialist at the NIOK Foundation and the head of Adjukössze.hu.
Background illustration: Photo by Nataliya Vaitkevich from Pexels / Pexels license