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Tax relief for company volunteering would boost giving by £1bn a year, says think tank8

Fundraising | Vibeka Mair | 3 Jan 2012

The Centre for Social Justice has said a scheme which gives companies tax relief for subsidising voluntary work carried out by their employees would boost donations to charities by around £1bn a year.

The scheme, called the “C-Volunteering” plan, will be outlined in an upcoming report from the Centre for Social Justice (CSJ), an influential think tank set up by Secretary of State for Work and Pensions, Iain Duncan Smith.

Under the proposed new scheme companies would enrol in the "C-Volunteering Initiative" and so qualify for tax relief.

Employees would be encouraged to give up some of their working time to a charity of their choice and the firm would boost the value of their contribution by agreeing an hourly rate for the voluntary work.

For instance, if an employee gave up 19 hours a month, his firm would agree an hourly rate and then pay that to the charity. If the matching funding was set at the minimum wage of £6.08 an hour, the charity's funds would be boosted by 19 x £6.08 a month or £115.52. A special online C-Account would be set up to receive the company's donations and the money would be paid to the chosen charity.

Firms, meanwhile, would be able to recoup some of the costs by setting their gifts against corporation tax in much the same way as they can offset research and development bills.

Gavin Poole, executive director of the Centre for Social Justice (CSJ), said: "We need imaginative new schemes to get British companies playing a bigger role in tackling deep-seated problems, such as educational failure and welfare dependency, that are holding back the country economically and socially.

"These proposals are a practical blueprint for revitalising Britain's hugely important and valuable third sector and helping them at a local level to rebuild shattered lives.

"Britain has a great track record for charitable donations and for people freely giving up their time as volunteers. But we are still far behind the United States, where the charitable impulse is more deeply ingrained.

"In the US, charitable donations run at $212bn (£136bn) a year - proportionately almost double the UK’s. We need to move closer to the American culture of corporate giving."

The CSJ report points out that currently the big charities, like Oxfam and the RSPCA, get the lion's share of donations. The biggest 3 per cent of all UK charities attract 75 per cent of the funding. Small-scale charities of the kind championed by the CSJ, risk being overlooked by their bigger, better-funded counterparts, it warns.

"C-Volunteering has the potential to revolutionise corporate philanthropic culture, to create a new culture of volunteering and giving with far-reaching benefits to society," says the CSJ report.

"Ideally, the government would set no limit to the amount of tax relief that could be reclaimed by firms supporting the C-Volunteering scheme. But if the relief was capped at a reasonable level – say £330m a year – that could generate an extra £1.3bn for charities, an increase of about 10 per cent in their annual income."

The CSJ proposals have been drawn up in conjunction with ‘C’, a new social enterprise group led by three senior business professionals.