New Zealand charities could lose $1.4 billion in donations as cheques are phased out

Tuesday, 29 December 2020

Today is the last day Kiwibank customers will be able to use a cheque.

New Zealand charities heavily reliant on older donors could lose $1.4 billion annually as banks phase out cheques during the next year.

All major New Zealand banks either already have or are planning to stop accepting cheques in next year, a move that has already raised alarm that some older people without access to the internet could struggle to pay bills.

Michelle Berriman, executive director of charity sector group Fundraising Institute of New Zealand, said people that donated to charities were disproportionately older and paid via cheque.

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Fundraising Institute of New Zealand chief executive director Michelle Berriman predicts the demise of cheques will have a major impact on charities.

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Maureen Harper, 77, has been paying by cheque since 1987 and is concerned they are being phased out by banks. Many older Kiwis like Harper rely on cheques to support charities. (File Photo).

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She said that some charities received up to 90 per cent of their income by cheque and estimated that annually, in the worst case scenario, charities could lose as much $1.4 billion in the shift.

The SPCA alone received more than 15,000 cheques annually to totalling about $1.5 million.

“This has the potential to result in devastating social, economic and environmental fallout that will have a shocking impact on communities throughout New Zealand.”

Cheques have long been a part of New Zealand culture. This pic from 1979, shows Roy Dickson, receiving a cheque for New Zealand’s Yachting's 1980 Olympic campaign.

Lower Hutt’s Te Omanga Hospice fundraiser Leanna Bruce told Stuff ditching cheques was a major problem and would have a “significant impact” on fund-raising.

“We have been contacting donors, many of them elderly, and it’s fair to say some are struggling with the change. While Covid-19 lockdown forced people to find alternative ways to bank, many elderly are now reliant on family members to do their banking.”

Nearly 40 per cent of Te Omanga donations come from cheques, she said.

Middlemore Hospital staff receive a cheque for $30,000 for procedure rooms that were a part of a major upgrade planned for Kidz First Children’s Hospital. Pictures like this are a major opportunity for charities to generate publicity and thank the donors, in this case Lions.

“We are already 22 per cent down due to Covid-19 and there is still uncertainty with the pandemic. As an essential service, we need to continue our care and support of people in the community no matter what alert level we are at.”

Forest and Bird fundraising group manager Jess Winchester said she expected the change would cost more than $200,000 a year.

“What we are seeing is quite sad. Some of our older donors have sent us notes saying this wil be the last year they can give.”

Staff have been in contact with donors to discuss ways they can continue to donate, but Winchester said many older donors did not understand online banking.

Cancer Society of New Zealand chief executive Lucy Elwood said the society received up to a third of its income from cheques.

“Many of our donors are very familiar with cheques and have used them to donate to charities for a significant number of years without any issues. They’re concerned about the security of using credit cards online and not comfortable using online banking.”

However, she was more optimistic that donors would make the shift to other payment methods, and said there were already signs this was happening.

Berriman said in 2019 New Zealand gave $2.4 billion, or 2.6 per cent of our GDP, to charities, making us among the most generous givers to charity in the world.

“Being generous and giving to charities is good for your health.”

However, despite still being a favoured medium of giving to charity, the use of cheques overall in New Zealand has been in steep decline for years.

ANZ, which is planning to phase out cheques next year, has seen the use of cheques drop by about 20 per cent year-on-year since 2015, while payments online have increased by 8000 per over the past five years.

ANZ spokesman Stefan Herrick said fewer than one per cent of the bank’s customers now use cheques regularly.

“We’ve been in touch with thousands of cheque users since July to let them know what’s happening, the digital payment options available and how we can help them make the change.”

ANZ has also been working with businesses that receive payments by cheques – including charities – so they can receive payments or donations by phone banking or internet banking.

According to the Word Giving Index New Zealand is number three behind the United States and Myanmar, when it comes to supporting charities. New Zealand is the only country to be in the top ten for donations, helping strangers and for volunteering.