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Seize the moment! Tax relief cap U-turn is huge opportunity for fundraising1

Fundraising | Celina Ribeiro | 1 Jun 2012

Now that all higher-rate taxpayers know about the benefits of giving, its time for charities to crack on, says Celina Ribeiro.

So I’m guessing there are a lot of pats on backs going on around charities today. Victory over the Budget’s Grinch-like attack on major donors is definitely cause for celebration. Celebrate and congratulate. Go on. You’re worth it.

But actually, when you think about it, hasn’t this furore been a little bit of a gift to fundraisers? That is, a gift in retrospect, now that the panic and uncertainty has subsided.

Charities know better than anyone that there is a very significant proportion of the higher-rate taxpayer population which presently do not give anything to charity. No wistful gazes over at the US, please. The UK-based wealthy can give more – cultural relativism be damned. But while in the US donors are all exceptionally aware of their (more generous) tax breaks for giving, there would be few higher-rate taxpayers now who don’t know about the UK’s own very helpful donations tax regime.

The government’s mumbled, fumbled suggestion that philanthropists are tax dodgers won’t stick. It was a bit of nonsense and while it aggrieved philanthropists, I don’t buy the arguments that it will deter others from giving. As all the research into philanthropy shows, the majority of people are motivated by a connection to the cause and vague sense of wanting to ‘do good’. I’ve now interviewed ten philanthropists for the Meet the Funders section in Fundraising magazine. Many of them did cite some tax reasons for setting up a foundation after a particular windfall, or the like, but the overriding theme is giving back.

Those are the ones that give already.

For the ones that don’t, the tax break is pretty handy. The ones that don’t give are the gift which the government has given charities. Essentially the government has run a very effective gift aid awareness campaign for the sector, with charities emerging as valiant victors. Charities now have an incredible opportunity to approach new possible high-level givers. Charities can now say to these people: ‘Phew, we all really dodged a bullet there. Aren’t we lucky that your gift can still benefit us, and yourself, to such a high extent? So, how about that £1m?’

In the midst of the tax relief cap scare, charities and philanthropists were quick to warn this would lead to a drying up of major gifts. Let the U-turn unleash a flood.