Donate to charity when you use cash machine, suggests Government

People will be asked to make a small donation to charity every time they take money out of a cash machine, in a scheme that ministers are proposing after copying the idea from Colombia.

Customers would also be offered the chance to "round up" their bill in shops and restaurants to the nearest pound – with the difference going to good causes as part of the standard chip-and-pin payment process.

Ministers believe many consumers would not consciously reject giving small one-off amounts to charity, and that the "pennies" generated by each transaction would add up to significant sums every year.

Under the Colombian scheme, which raises around $22,000 (£14,300) a month, bank customers are asked to choose from making a donation of 50 cents, $1, $7.50, or nothing.

Donors are then prompted into giving to a choice of three charities: homelessness, a children's heart foundation, or the sons and daughters of wounded and dead military personnel.

They found that $1 was the most popular amount to donate and also that the layout of the keys had an effect – left-handed people found it harder to navigate and donated less.

Ministers may meet resistance from banks concerned about a backlash from consumers if they are asked for money in every transaction.

Among other proposals contained in the Government's Green Paper on Giving, which is published today, are:

* Plans to allow charitable giving when filling in tax returns, or applying for driving licences and passports.

* Establishing an eBay-style volunteering site where people can both get help and offer their time for free.

* Create the UK's first charity shopping search engine. The site will collect the fees paid by online retailers for referrals to their websites and donate these to a charity chosen by the user.

* Allow government buildings to be used by selected charities.

* Using the honours system to better reward charitable giving and encourage others to do the same.

The Green Paper also strongly hints that ministers are preparing to relax Criminal Record Bureau checks which, it suggests, put people off volunteering.

The paper points out the UK ranks only 29th in the 2010 World Giving Index for "giving time".

"If we want people to choose – freely – to give, rather than do other things with their time and money, then they need to be presented with attractive ways to do so," the paper says.

"This is partly about making giving as easy and convenient as possible, so that barriers of time and effort are low."