Amongst the findings, coming during the same month The Sunday Times giving list illustrated a drop of £818 million in the last year, JP Morgan cited that 30% felt better tax incentives were needed to encourage giving, suggesting that new tax rules would make a significant difference to giving.

This correlates with a survey entitled Finance Count 2011 conducted by Agenda Consulting in collaboration with the Charity Finance Directors’ Group (CFDG). The survey concentrated on the finance management of 64 charities with an annual income of over £1million, and found that charities are missing out on 32% of the Gift Aid they are entitled to claim.

In the last month, numerous reports have indicated a need to improve giving incentives in the UK, with particular reference to donors/charities needing to utilise tax relief and gift aid schemes to their benefit. The use of varying tax relief schemes, such as on gifts of shares and legacy gifts, have decreased in the last five years. The Government needs to carefully consider the findings and improve incentives for philanthropists and charities if they are to improve the UK’s giving habits. The sector should be doing more to promote, and make accessible, all available forms of tax-efficient giving for donors.

In light of this, we will be extremely interested to see whether the Government’s Giving White Paper impacts positively on the issues stated above. Will reducing inheritance tax to 36% for those leaving 10% or more of their estate to charity illustrate the ‘powerful new tax incentives’ needed to encourage philanthropy? Whilst enabling an online filing system for gift aid will undoubtedly reduce paperwork, in what ways will this help charities to better understand the system and encourage them to utilise an ‘accessible’ scheme?

Let us know your thoughts.

Government is well-placed to bring people together – particularly decision-makers from different sectors that might not otherwise meet – and to highlight good ideas.  There is no doubt that in the present economic climate funding capacity is tougher than ever. Low interest rates leading to low return on investments has meant that for many trusts and foundations the money available for good causes has vastly diminished. Simultaneous Government funding cuts have left organisations such as the Arts Council, for instance, with much smaller pots to distribute, whilst corporates have likewise seen their CSR budgets slashed. This is at a time when the demand for funding is rising to levels seldom previously seen as organisations scramble for survival – let alone for developing new and much-needed programmes.

New and innovative projects and partnerships are essential to deliver the very best outcomes. Now, more than ever, the sector needs the best creative thinkers with the most inventive ideas. If funders are unwilling or unable to take risks in the current climate, many potentially exciting programmes will fail to make it to the runway. Such risk-averse attitudes may also be discouraging established organisations from developing innovative new programmes and instead are relying on tried and tested formulae to raise funds – ones which, we suggest, may be far from the most effective and efficient solutions.

Government’s proposals are to be welcomed.  They play to its strengths by drawing upon its influence, persuasion, negotiation and resources. If Government can be a facilitator in supporting organisations to join together in what has been all too often a fragmented sector, wary of sharing ideas and pooling resources, then this is an important step-change.

Bring on the Summit!

Legacies generate vast sums of money for charities. Cancer Research, for instance, receives around half of its voluntary donations from legacies. Yet in considering current demographics, we cannot but avoid the fact that people are living longer.  Average life expectancy in the UK is eight years higher than in the 1970’s (80 as opposed to 72). This is creating a far longer delay between the time a decision to leave a legacy and the charity’s receiving the donation on the demise of a donor. Substantial sums of money intended for charitable purposes are unavailable for charitable purposes for far longer.

Many UK charities have been suggesting that Government introduce tax-relief to promote ‘Lifetime Legacies’. The ideas underpinning this are ones which Cause4 applauds – encouraging donors to give whilst alive, boosting philanthropy and, in so doing, offering donors the satisfaction of seeing what their support is enabling in the here and now and giving them opportunities to feel directly engaged in good causes while they have life and breath.

At Cause4’s Philanthropy Seminar in November 2010, we highlighted the work being undertaken by the European Association for Philanthropy and Giving (EAPG), the Charities Aid Foundation and the Charity Tax Group to encourage donors to engage with charities by pledging a legacy, whilst cajoling Government to create tax-breaks available during their lifetime.  Such a mechanism would create greater tax-exemption and flexibility in asset management for the donor. In other words, the charity receives a clear, irrevocable commitment from the philanthropist, as well as the eventual receipt of a lump sum from his or her estate. Meanwhile, the philanthropist receives a guaranteed income from the asset.

However, Cause4 would take these proposals several steps further.  We suppose that ways can be found for advancing a legacy gift and releasing capital directly to beneficiary charities will before death and final settlement of the estate – perhaps, for example, at the age of 70 when on average a donor would live for a further ten years.  We imagine that there are banks that could be persuaded to facilitate such a scheme and argue that this would encourage many more active relationships between donors and charities, something which is crucial in building an active culture of philanthropy in the UK.

Alastair McCall, reporting in The Sunday Times, stated this decrease was largely ‘attributed to the 37% drop in wealth for the richest £1,000 seen in the Rich List two years ago in the wake of global financial turmoil.’  In addition, research carried out by the Charities Aid Foundation and The Sunday Times found that 89% of givers were only motivated to invest in charities who could clearly demonstrate the impact of their work, whilst 54% per cent implied charities need to improve their communications in order to encourage giving.

On a lighter note, there a number of positives to draw from the giving list. For example, the number of donors giving more than £1million a year has grown from 118 to 129 with those philanthropists in the top 30 increasing their giving from 3.22% to 3.42%. The arts and education sectors were also favoured by givers in the top 10, with No. 1 ranked Anurag Dikshit’s recent donations to Education, children and India being an incredible 172.4 million. Education also benefited from Bart Becht (donating £80.2m) and Christopher Cooper-Hohn (giving £75.5m) in second and third place, whilst the arts profited heavily from Dame Vivien Duffield, Lord Sainsbury and David Potter.

We sincerely hope that donations are not set to fall further but the sector does also needs to ‘wake up and smell the coffee’. I recently had dinner with a well-respected Development Director who has left the sector to work in Enterprise. She said she was gobsmacked that she hadn’t been asked to give or approached for sponsorship by any institution in the last three months – a prime giving candidate if ever there was one. As ever, if the Third Sector wishes to create stronger connections with philanthropists, we need to be more entrepreneurial in spirit, communications with givers needs to evolve and we need to communicate better impact of the work. Moreover, let’s not ignore one of our own – (name of potential donor supplied on request!).

The EEF is to be administered at arm’s length from ministers, which following an application process involving 14 bidders, is to be managed by The Sutton Trust in partnership with the Impetus Trust. The Sutton Trust, who will also be investing £750,000 of their own, has been awarded £125 million. This will be added to the Impetus Trust’s commitment of £250,000. The charity is said to be launching the fund this coming summer.

Whilst the fund has been criticised due to its replacing the free school meals scheme, the overall proposal is set to create a lasting legacy for 100,000s of disadvantaged children, with as much as £200 million being allocated during the next 15 years. It is envisaged that additional income will be generated through fund-raising and investment returns, whilst The Sutton Trust’s involvement will also encourage philanthropists wanting to invest through a ‘trusted’ route.

Given the established, respected position in which The Sutton and Impetus Trusts sit, this project stands to be highly successful. The government states that each project will need to meet tough criteria in order to benefit from the fund and it is hoped that with the experience behind them, the Trusts will present an accessible, approachable application process for those wanting to apply.

Cause4 is really encouraged that Government has taken a step back and given the allocation of funds to creditable, knowledgeable Trusts to administer. Here’s hoping for great things, and a credible partnership model for the future.

So, four months on – how are developments unfolding? Research conducted by Arts Quarter as part of Culture 2020 based on the final figure of 587 recipients, are as follows:

• Those with annual turnovers under £1m appeared to be the most in need of fundraising skills
• Across all art forms, scales and regions (apart from Music/Opera) two thirds or more of respondents felt that they did not have the fundraising resources to deliver their targets.
• In highlighting the importance of a Case for Support, 50% of respondents stated that such a case did not exist within their organisation.

This is worrying. Whilst high levels of organisations welcomed Mr Hunt’s ten-point plan, in reality it would seem that the fundamental foundations to optimise the initiative – i.e. the people – are missing.

What is essential is new entrepreneurial training schemes and a joined up approach to attracting talent to the sector to big organisations and small.

Redgrave has recently set a new milestone in charitable fundraising earning the title of the London Marathon’s top celebrity fundraiser. Redgrave raised well over £1.7m for the Steve Redgrave Trust from his participation in the 2006 Flora London Marathon.

JustGiving.com shows Redgrave’s position usurping other marathon stalwarts such as Alastair Campbell in second place – who has raised more than £300,000 for a leukaemia charity, former boxer Michael Watson, former singer Peter Andre and his ex-wife Katie Price. £116 million from celebrities has been raised via JustGiving.com over the past ten years which equates to over one fifth of the £500 million raised by the London Marathon since its start in 1981.

Steve supports charities such as Children with AIDS, Diabetes UK, Make A Child Smile Appeal and Whatever It Takes. Redgrave’s recent efforts have seen him being involved in starting a Rowing academy in Lavasa, India, launching FiveG- a Fairtrade Cotton Brand of Clothing and aiding the build of a new youth and business centre in Lincoln. As well as this, the British Olympic legend’s Steve Redgrave Fund helps supports community groups, small charities and schools in areas of economic deprivation, community cohesion and education.

We salute Sir Steve for his Olympian efforts in charitable fundraising.

Currently serving as chairman of the Royal Opera House Endowment Fund, Director of the South Bank Centre board, on the board of the World Monuments Fund and Governor of the Royal Ballet and the Royal Ballet School, she is a formidable supporter of the arts.   But it seems her concerns are as much for the educational impact that the arts can have as it is for the arts in themselves. “The Government can’t ringfence the arts. In my mind education is as, if not more, important”, she said last week. 

To borrow in part from John F Kennedy, her message is seems is: “Ask not so much what we can do for the arts but what the arts can do for our people.”  As Arts organisations come to terms with the prospect of fewer government grants administered by the Arts Council and the need to generate more for themselves, they could do worse than reflect upon what Dame Vivian might be suggesting.

• From April 2013, changes to Gift Aid will allow charities to claim Gift Aid on £5,000 worth of donations without the need for signed declarations.
• By April 2012, there is to be a 4% drop in the rate of inheritance tax (to 36%) for those bequeathing 10% of their estate to charity after their death.
• From April 2011, the current limit of £500 is to be increased to £2,500 to enable charities to give ‘thank-you’ acknowledgments to donors.
• A new online system of filing for Gift Aid applications is to be introduced by April 2013 to reduce bureaucratic burdens.
• Further exploration about how to increase take up of Payroll Giving will take place.
• Consultation will take place in 2011 on proposals to encourage donations of pre-eminent works of art or historical objects to the nation in return for a tax reduction.

Without seeking to repeat the plethora of opinion already offered by many commentators, Cause4 offers these thoughts:

It would be churlish not to acknowledge the positive developments announced in the budget.  Of course the encouraging of legacy giving is to be welcomed – as are plans whereby charities can claim Gift Aid on multiple smaller donations.  However, are we alone if feeling underwhelmed.  Far too many further consultations and explorations – not nearly enough in the here and now.  

If you had £240m to make available to charities, the sum the Chancellor claims will be given  through Gift Aid concessions, would you not choose to spend it incentivising new and more substantial donations?  And the idea of enabling charities to say thank you to donors with acknowledgments that might have a value of £2500 as opposed to £500 seems frankly crass!  Not only will it cost charities more in time and money but it pre-supposes that this is what donors want and expect.  Is it really going to turn hesitant givers into much more substantial ones. 

Where are the real tax-breaks?  Where are the new radical, creative ideas?  Where are the imaginative schemes to enable those that might leave generous legacies to have their gifts advanced?  In the eyes of some the Budget announcements might be the best ever for charities, but to suggest that these new measures will turn philanthropy on its head seems little delusional.

The issue of independence is especially germane given current controversy surrounding The Arts and Humanities Research Council (AHRC) and news that it will spend a “significant” amount of its funding on research related to the government’s Big Society vision.  This follows government “clarification” of the Haldane principle – a convention that for 90 years has protected the right of academics to decide where research funds should be spent.

The implication bluntly is that research bodies must dance to the government’s tune. The Guardian claims that the AHRC was told that research into the “Big Society” was non-negotiable if it wishes to maintain current funding levels at £100m a year.  This ‘strings-attached’ agreement is ethically highly questionable.

Perhaps such is the desperation within Government to give definition and structure to its Big Society concept that this is a final tilt to see what the weight of the UK’s best academic brains can produce. Whatever happens, let’s hope for some academic excellence and independence, Haldane principles or otherwise….