Why can’t we get tax breaks for philanthropy right?
24 May 2010 | By Cause4 staff
It’s been an extraordinary week as the new bed-fellows within a new coalition Government plump up their political duvets.
Pertinently we have heard Jeremy Hunt, the new Secretary of State for Culture, Media and Sport make his first speech at Camden’s Roundhouse, Camden on 19 May about the future of Arts and Culture. Cuts are inevitable but we should not expect culture to be singled out as a soft target.
The pre-election pledge to return the National Lottery to its first principles and support the arts and sport remains. 20% of National Lottery revenue will be ring-fenced for arts and culture, a significant rise on the current proportion. In return, benefiting organisations will be required to limit their administration costs to 5% of their budgets. So far, so good...
Jeremy Hunt also continues his pre-election promises of helping philanthropy with tax concessions. However, it seems that the immediate promises are limited to streamlining the Gift Aid scheme without any clear offer for further concessions for public giving. There is no money currently available for this.
It’s here that the heart sinks. If there are no real tax breaks, how do we start to change the culture of philanthropy in the UK? As ever, we are trumped by the US when the very next day it was announced that Congress is planning to unveil yet more legislation to extend tax incentives for charitable donations, including gifts made by older people from individual retirement accounts.
Instead of tax incentives, Hunt and his team, have drawn up a list of 200 top philanthropists, both in the UK and abroad, and will be writing personally to each of them to encourage them to extend their philanthropy. Without incentives, what's in it for them?
Radical change is needed to promote philanthropy, one that is so significant that the culture of enhanced giving will outlast the term of any Government - fixed or unfixed. Tax breaks, matched giving and charity bonds – whatever the method, it would be brilliant to see some real creativity. The needs of donors need better understanding.