Daniel

Daniel Ferrell-Schweppenstedde

Policy and Public Affairs Manager

Charities Aid Foundation

What is on the agenda for charities and giving in the post-Brexit world?

6 April 2021

In some ways civil society was at the forefront of Brexit – the main fundraising and campaigning vehicles for both sides were themselves non-profits. However, in many other ways it has been side-lined with civil society barely meriting a mention in the EU-UK Trade and Cooperation Agreement that will determine how we engage in the future. Brexit has clearly changed the policy landscape but these shifts also bring new opportunities to shape future thinking and ensure that civil society is taken into account.

The UK Government has, for example, made a commitment that any shortfall in EU funding post-Brexit will be replaced by the UK Shared Prosperity Fund. Many charities across the UK have benefitted from EU funding in the past, and it is vital that charities do not miss out on future funding arrangements or face administrative burdens and issues around eligibility criteria when accessing UKSPF funding, even more vital at a time when many are already experiencing major Covid-related financial challenges.

There are further potential opportunities too: such as reforming VAT to make it work better for charities, using state aid differently, and designing a procurement system that is better able to engage charities and harness their potential to help build more resilient local economies.

But there are also practical changes to be resolved such as volunteers and workers needing visas, ensuring that cross-border supply chains work so that products used by charities are available when required - health and care supplies being a good example. There is also the wider question of the additional impact Brexit might have on an economy already weakened by the Covid-19 crisis, changing people’s ability and willingness to donate should their disposable income be reduced. There might also be corresponding changes to corporate giving.

The value of cross border giving cooperation

There are also other issues which might not garner much profile on the national political agenda but could have a significant impact on civil society over the longer term. CAF has been at the forefront of facilitating cross-border giving for many years, but the Covid-19 crisis has shown the importance of cross-border cooperation more than ever before.

We have, for example, enabled donations to the WHO Covid-19 Solidarity Response Fund, facilitated giving through the Transnational Giving Europe network and helped to enable growing flows of philanthropic capital between the UK and the US.

It is clear that many donors want to give to good causes across the globe, but cross-border giving still faces many barriers that could be reduced. Most European countries, for example, do not grant income tax deductibility to donors who wish to support a foreign beneficiary, even between EU member states. A post-Brexit environment provides an opportunity to work towards an equivalency regime with European partners to incentivise further charitable giving. And there are other services that underpin cross-border giving which are impacted by the UK leaving the EU.

Bank and money transfers, for instance, now come with higher fees which makes giving from the UK to the EU and vice-versa more costly (depending on which platform or service the sending donor or organisation are using).

transnational giving europe post brexit