Tax incentives not the only key to boosting giving, sector tells APPG 2

Fundraising | Celina Ribeiro | 9 Jun 2011

The British public has the capacity to give more, but there is no consensus as to whether and what tax incentives can encourage more philanthropy, it was evident at a meeting of sector representatives in Westminster yesterday.

Karl Wilding (pictured), head of research at NCVO and one of the speakers at the All Party Parliamentary Group on the Voluntary Sector meeting at the House of Commons, called for a sector-wide debate into the role of tax in giving. Whether tax mechanisms should used as an incentive to get people giving or as leverage by charities requires much more investigation, he said. “We need a discussion.”

His call followed what appeared to be disparate opinion over the potential value of the introduction of lifetime legacies in the UK – an issue left out of the government’s Giving White Paper - among the charity sector representatives in the meeting.

Leading the charge on calling for lifetime legacies to be investigated with a view to being supported by the UK tax system was Matthew Bowcock, chair of the Community Foundation Network. “Lifetime legacies differ from legacies in that they’re fun,” said Bowcock, also a member of the Philanthropy Review board which has advocated strongly for the measure. Bowcock argued that the main problem with lifetime legacies was the number of models that could possibly be implemented.

“Please can we have a comprehensive, objective look at this,” he asked APPG chair Alun Michael MP.

But Wilding was more cautious, arguing that until charities made the most of the tax incentives they already enjoy they cannot well ask for further government support, particularly when that support will impact on an already stretched Treasury bottom line. Wilding singled out maximising gift aid take-up as a particular issue the sector needs to address.

Louise Richards, director of policy and campaigns at the Institute of Fundraising, said government and charities could focus on other things to increase giving. “Tax breaks aren’t the biggest thing that might help,” she said.

Even within the Institute of Fundraising itself, there has been discussion over whether to focus on promoting lifetime legacies or legacies, said Richards. She concentrated instead on calling for government to review the proposed abolition of cheques and for charities to better demonstrate their impact to donors and potential supporters.

Beth Breeze, researcher with the Centre for Charitable Giving and Philanthropy at the University of Kent, suggested that there was a case for lifetime legacies, adding that “there is a massive untapped pot” of philanthropy.

“We could double giving, triple it, without people even noticing,” said Breeze who insisted that it was relationships between charities and their major donors, not the ease of giving or tax breaks, which could bring significant amounts of money into organisations and the sector as a whole.

“You don’t get milk out of a cow by sending it a letter."

Directory: Community Foundation Network | Institute of Fundraising | National Council for Voluntary Organisations (NCVO)
Who's Who: Karl Wilding | Beth Breeze | Matthew Bowcock

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Karl Wilding
Head of Policy, Research & Foresight
NCVO
10 Jun 2011

Adrian
Thanks for your comments. To reiterate my remarks from the APPG meeting and NCVO’s position on lifetime legacies, far from “dissing” them, we think that they could become an important source of funding for the sector and have long pushed for government to conduct detailed analysis in partnership with the sector about their potential. You’re right that they are an important source of finance for charitable organisations in the US, and that’s clearly an important factor when deciding upon the right course for UK policy. But I’m cautious about directly reading across from the American experience though – the UK context is of course very different and what works in one way there can not necessarily be directly ‘imported’ here.

You make an interesting point about our 'constituency'. NCVO’s membership now numbers around 8,500 organisations in England. Some of our members are very significant beneficiaries from legacy income and some aren’t – our interest is in promoting the financial health and future sustainability of the whole sector and there is no question that I’d oppose anything which I feel would be of benefit to our members and their beneficiaries.

I agree entirely that it’s important that the sector pulls together on the need to realise a step change in giving and NCVO has an important role in that. That’s why I want government to seriously consider the potential of lifetime legacies alongside a range of other policies. I think it’s worth repeating another point that I made at the APPG – that the primary responsibility to deliver a real shift in giving lies not with government – but with the sector itself. There is no abdication of responsibility nor shirking of that considerable challenge here. My point was not that lifetime legacies are not valuable, but that as a sector we need to make sure we’re realising the full potential of what we already have in terms of tax incentives before asking for more.

[Reply]

Adrian Beney
Partner
Iain More Associates
9 Jun 2011

What I am about to write may seem a little impatient, perhaps intemperate, and maybe even arrogant. But here goes because this lifetime legacies thing is getting my goat.

Here's what I want to say: "I do wish those who appear not to understand lifetime legacies, like Karl Wilding, would stop "dissing" them in public without having a damned good go at understanding them first. That would start by studying all the literature that's been produced here and in North America on their impact on the timing and size of gifts made by very wealthy people."

It's very noticeable that those who argue for lifetime legacies, reseachers like Beth Breeze, museum directors in the the Arts sector and most of the Higher Education sector have a close involvement with very high level major gift fundraising. Those are ambivalent - and I understand their ambivalence - probably don't represent or do very much major gift fundraising. How many members of NVCO have had lifetime 7-figure gifts from individuals in their latest financial years? My guess is it's not many. So Karl is reflecting the needs of his constituency. But you can promote ideas which serve your members without dissing ideas which serve other parts of the sector. (In the last charity I worked in we had 95% take up on Gift Aid, so we WERE using all the relief available.)

And for the Institute to be comparing (if it really did) the abolition of cheques with lifetime legacies is like trying compare a pair of walking boots with a Boeing 747. They are both important, and they are both used for getting from A to B, but in radically different ways and for different reasons.

We need cheques AND we need lifetime legacies. But so long as people within the sector argue against them we are unlikely to get them. The uncharitable part of me wonders whether this is simply ignorance or whether in fact it's jealousy of those who are able to raise big gifts.

Any fundraising organisation should be able to raise big gifts if it gets its act together. No, not all will be raising gifts large enough for lifetime legacies to make a difference, but many more could be.

Let's pull together, on cheques and lifetime legacies, please.

[Reply]

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