The UK needs to develop a stronger philanthropic culture to boost giving but should not attempt to copy the US system, according to CAF research.
In the report Give Me a Break: Why the UK should not aspire to US-style culture of charitable giving, Rhodri Davies, policy manager at CAF, contrasts the US and UK tax systems and attitudes to wealth, to try to explain why the US topped the annual World Giving Index last year – and what UK policymakers and fundraisers can do to boost giving in the UK.
Davies said: “It is fantastic that policy-makers are keen to boost levels of charitable support in the UK, but we must stop obsessing over why we lag behind the US.”
The report explains that the high level of giving in the US can in part be explained by very different funding arrangements for social welfare.
Tax incentives
The report highlights the US’ one charitable tax relief with the UK’s raft of separate schemes and suggests that this makes it confusing for donors.
Speaking at an event to launch the report, Nick Hurd, minister for civil society, said that while “there is a good debate to be had around the complexity point”, in terms of fundamental changes to gift aid: “I don’t see that changing in the short term”.
The ability to earn tax relief on living wills, or charitable remainder trusts, was one suggestion that was popular with those at the roundtable.
Sue Daniels from Philanthropy Impact said: “I am going to make the case for living wills. It’s one tool that would be very helpful.”
Michael Pitcher, senior client partner at Towry, who advises high net worth clients added: “Living wills are one thing we are missing.”
Developing a more philanthropic culture
Hurd said there needed to be a cultural shift to encourage the wealthy to give so that there is an “expectation that if we have made it then we are expected to give”.
Lisa Nandy, shadow minister for civil society, warned the sector not to focus solely on major donors. She said: “We should be careful about celebrating philanthropists just because they have given a lot – we should also be celebrating the teenager who has given £2.”
Stewardship’s chief executive, Michael O’Neill, said that when it came to changing philanthropic culture, “we have to start with trustees”.
He said: “In the US there is a very clear expectation that trustees give, and find others to do so, but in the UK I have sat on boards where they don’t.”
