The Institute of Fundraising has expressed concern that progress to reform Gift Aid is “still slow moving and disjointed”. In particular, it is concerned that new discussion around increased giving, donor motivations, and the UK embracing and replicating the American model of philanthropy means that the consultation around Gift Aid is departing from its original brief.
The Institute was responding to the Digital Giving presentation given by ResPublica on 6 September 2010.
Lee Grant, Tax-Effective Giving Project Manager at the Institute of Fundraising, said: “Donors do not choose to give because of Gift Aid; they give to support good causes. Gift Aid simply increases the value of their gifts. Higher rate taxpayers enjoy partial-relief and therefore often adjust their gifts accordingly. Our system is not comparable with that of the USA; primarily because all the relief goes to the donor in the States and this can be used to motivate donors to give more.”
He added: “It is quite alarming that in 2010, we are discussing new technologies in Gift Aid in the same breath as ‘the internet’ and ‘SMS donations’; this is hardly revolutionary stuff. However, the fact remains that the sector needs to catch up, and what we have come to expect as ‘the norm’ in the commercial sector is not necessarily being replicated in ours”.
The Institute states that it welcomes any reform of Gift Aid that “creates an opportunity to increase charities’ income from voluntary gifts and that reduces the administrative burden and costs for all organisations involved in administering Gift Aid”.
It is particularly keen to ensure that no voluntary groups are excluded from Gift Aid and the choice it offers their donors to increase their gifts. It argues that recent changes to the application process and the introduction of the fit and proper persons test is already discouraging new charities from using the relief.
The Institute continues to call on Government to extend transitional relief to maintain Gift Aid at its current level until suitable reforms have been implemented to address the deficit post-transitional relief and simplify the process sufficiently to include all voluntary organisations.
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