There is widespread alarm and despair among charities and other organisations at the government's proposal to cap tax relief on donations.
Over 1,000 organisations have come forward to support the Give it Back George campaign, alongside around 2,000 individuals. This includes household names such as Cancer Research UK, Kings College London and Southwark Cathedral, through to small and local groups such as the Nottinghamshire Community Foundation, Brent Community Transport and The Odysseus Foundation. The campaign is led by the National Council for Voluntary Organisations (NCVO), Charities Aid Foundation (CAF) and the Philanthropy Review.
A recent survey published by CAF suggested that nearly nine out of ten top charity executives believe the cap will hit donations from major donors. As the CEO of a fairly young charity, I find myself agreeing with the 90%.
The Chancellor announced a cap of £50,000, or 25%, of annual income on the tax relief donors can claim on their gifts. This means any donation of over £200,000 made through Gift Aid could be affected, but smaller yet significant donations are likely to be affected as well.
Major donations are vital for charities. £11bn was given to charity last year, with almost half of this coming from just 7 per cent of donors. The top 100 donors gave a total of £1.67 billion to charity, according to the last Sunday Times Giving List 2011. And many of these gifts are used to set up grant-making trusts and foundations that support small charities, like The Odysseus Foundation.
I am calling on the Chancellor to think again and reverse a decision that could cost charities millions. At a time when charities are being asked to do ever more with less, we need to encourage major donors to dig deep in their pockets, not changing the tax rules to put them off making donations. The government should be promoting philanthropy, not discouraging it
And I am not alone in my thinking. Another CAF survey revealed the scale of Conservative and Liberal Democrat backbench discontent at the proposed cap, with almost two-thirds of respondents saying that tax relief on charitable donations should be exempted. The survey also showed that 93% agreed that the government "should do all it can to use the tax system to encourage charitable donations from wealthy donors."
We need the Treasury to think again and reverse a decision which could cost charities millions of pounds. Philanthropists are not tax dodgers. Claiming tax relief on major donations is not a ploy to save tax. Philanthropists who make large donations give away far more than they could ever claim in tax relief. Please join us and support the Give it Back George campaign.
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