26/12/2011 06:09 GMT | Updated 24/02/2012 10:16 GMT

Charities Could Make £1bn More A Year Under Centre For Social Justice Scheme

Charities would reap an extra £1 billion a year under think-tank proposals unveiled today to "turbocharge" corporate giving.

The Centre for Social Justice, founded by Work and Pensions Secretary Iain Duncan Smith, has devised a tax relief scheme to encourage businesses to subsidise voluntary work carried out by their employees.

It claims the move would boost "unfashionable" grassroots charities that struggle to compete with the major organisations for volunteers and donations.

Under the "C-Volunteering" plan, drawn up with social enterprise group 'C', employees would be encouraged to give up some of their working time to charity and their employer would donate cash for every hour volunteered.

In return, firms running the scheme would be eligible for tax relief in a similar way to the existing system that encourages research and development.

The report suggests there would ideally be no limit to the amount of tax relief that could be reclaimed but suggests that if it was capped overall at £330 million a year it could generate an extra £1.3 billion for charities.

CSJ Executive Director Gavin Poole said: "We need imaginative new schemes to get British companies playing a bigger role in tackling deep-seated problems, such as educational failure and welfare dependency, that are holding back the country economically and socially.

"These proposals are a practical blueprint for revitalising Britain's hugely important and valuable third sector and helping them at a local level to rebuild shattered lives.

"Britain has a great track record for charitable donations and for people freely giving up their time as volunteers. But we are still far behind the United States, where the charitable impulse is more deeply ingrained.

"In the US, charitable donations run at 212 billion dollars (£136 billion) a year - proportionately almost double the UK's. We need to move closer to the American culture of corporate giving."