With gift aid reform and inheritance tax changes, the arts stand to benefit as a result of this week's Budget, says Christopher Goodhart.
There is clearly much to be pleased about in this year’s Budget, although I am not sure that I agree with Simon Jenkins’ analysis in The Guardian that “Britain is at last on the way to having probably the most generous tax regime for arts giving anywhere”.
The news about inheritance tax should have a significant effect, but still falls a long way short of enabling tax-effective charitable remainder trusts which would enable donors to give during their lifetime, and for charities to know that they could count on that income stream at some point in the future. The Charity Tax Group has been campaigning for these with their lifetime legacies campaign for some time, and should absolutely continue to do so.
For arts organisations, the obvious first step is to encourage legacies and to build on their relationships with their supporters. Given that the average gift in the UK is still only £11, and that legacies are frequently in excess of £10,000 the mathematics make clear sense as to where to focus time and effort.
The news that the gift aid benefit limit is to increase will make life much easier for those organisations which want to express their thanks to major donors with lavish receptions, but I fear this will only affect the larger organisations.
It’s good news too that the government plans to consult on encouraging donations of pre-eminent works of art or historical objects in return for a tax reduction, although one can already envisage the squabble about what constitutes “pre-eminence”. I can see a new breed of ‘fine art consultants’ retained by public and government alike to sit in judgement!
The gift aid small donations scheme is certainly welcome, although the frustration of large organisations like Marie Curie who rely heavily on their Great Daffodil Appeal backed by collectors with buckets is clear. For arts organisations this is a great opportunity: every foyer should have a donations box in the same way that Tate or The British Museum do, and they should make it clear that they are charities and rely on the generosity of their supporters to continue delivering great performances or exhibitions.
Ticketed organisations need to be careful not to fall into the trap of not asking for a gift aid declaration, as over a year they may well use up their £5,000 limit with their donation boxes. And why stop at boxes? How about giving ushers a tin, and having one at the bar? It may sound crass and vulgar, but small arts organisations need to look to every trick available to raise money and to start to build relationships with potential donors.
That’s the only drawback of the scheme that I can see, namely that the arts organisation will not have captured the address details for many of these donors.
Finally, a reduction in bureaucracy through online filing for gift aid will certainly be welcome, and one can only hope that there will be further movement on the need to keep and retain paper records.
In summary, it has been a good Budget for the arts. Let us hope that this is the beginning of a trend of including charities and the arts in every Budget, and not just a one-off flash in the pan.
Christopher Goodhart is European managing diretcor Arts & Cultural Division at Blackbaud Europe Ltd and treasurer and vice chair at The Albany theatre.
