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Treasury proposes scheme to encourage gifts of artworks and 'pre-eminent objects'

Fundraising | Celina Ribeiro | 29 Jun 2011

HM Treasury has opened a consultation into a scheme to encourage people to give artworks or ‘pre-eminent objects’ to the nation during their lifetime in a bid to boost philanthropy and bolster the collections of British institutions.  

Economic Secretary to the Treasury Justine Greening indicated that such a consultation was on the cards at the Institute of Fundraising’s payroll giving conference at the Home Office on Monday. She said that while the coalition had already offered charities the most “radical and generous package for 20 years”, the government will be continuing to work on introducing measures to incentivise giving.  

The consultation paper, released this morning, outlines how the proposed scheme would work, and avoids the use of the term ‘lifetime legacies’, the phrase used in the US to describe giving objects away during the donors lifetime in return for a tax benefit.

The scheme outlined in the consultation will see owners of works of art or ‘pre-eminent objects’ offer those items as a gift to the nation. If accepted by an expert panel as pre-eminent, that panel will also decide on the valuation of the object. That valuation will be used as a basis for a tax reduction for the donor, set as a percentage (the paper gives the example of 25 per cent) of that object’s judged worth.

The donor will be able to make a preference for where their item will be held, but will not make the final decision. The establishment which receives the object does not have to be a charity, but the consultation paper indicates that it expects they will be.

The paper says: “As well as promoting philanthropy and planned giving, this new scheme aims to broaden public access to pre-eminent objects by placing them on long-term loan to public collections.”

The scheme will involve multiple government departments, including the Treasury, HMRC and the Department of Culture, Media and Sport.

Secretary of State for Culture, Olympics, Media and Sport Jeremy Hunt said. “Government wants to encourage people to give pre-eminent objects to the nation. With increasing international competition and a very strong art market, the UK faces a challenge in securing new acquisitions which are essential to ensuring collections remain relevant, education and attractive to the public. I urge all those with an interest in our culture and heritage to work with government to ensure the success of this new scheme.”

This proposal follows a raft of other measures from the government designed to boost philanthropy to the arts and heritage, which have suffered as a result of government spending cuts. After the government announced a cut to the Arts Council budget of nearly a third it released a range of incentives in a ten-point plan, including an £80m match fund, due to be launched this year, which will see government match gifts from large individual donors to arts organisations. Many also hailed the  March Budget as a boon for the arts.

But in the arena of artwork acquisition, the Arts Fund has already made some movements to increasing its buying power in this respect with the launch of a public ‘membership’ fundraising  campaign to increase its acquisition fund from £4.5m a year to £7m until 2014.

The government’s proposal is open for consultation until 21 September, 2011.

Read the consultation document here.

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