Media office archive

CAF is one of Europe’s largest charitable foundations. We produce research on charities and charitable giving, develop policy ideas and work with people, companies and charities to help good causes thrive.

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Budget 2013: Gift Aid Reform could help boost charities by more than £700m a year

20 March 2013

The Chancellor’s Budget proposal to make Gift Aid fit for the 21st century could help charities gain more than £700m a year, at a time when one in six charities fear they may face closure during 2013, the Charities Aid Foundation (CAF) said today.

CAF is delighted that the Chancellor has responded positively to its long-standing calls for reform and will consult on replacing the current cumbersome system of Gift Aid.

The Budget document (paragraph 2.75) pledges that “The Government will consult on proposals to make it easier to claim Gift Aid through a wide range of digital giving channels, including options for enabling donors to complete a single Gift Aid declaration to cover all their donations through a specific channel.”

CAF has estimated that reform could help bring charities up to an extra £735 million by increasing public awareness of Gift Aid and boosting ways of giving such as Direct Debit and via social media which make it easy for people to ensure tax relief goes to charities.

A CAF survey of senior charity executives published last year found that:

  • 17% said it was likely that their charity may face closure in the next 12 months.
  • 40% worry that their charity may have to close if the economic situation does not improve.
  • 49% say they have had to use reserves to cover income shortfalls over the last year.
  • 26% say they had cut front-line services.
  • 25% say they had made staff cuts.

John Low, Chief Executive of the Charities Aid Foundation, which promotes charitable giving and provides financial services and social finance to not-for-profit organisations, said:

“It is excellent news that the Treasury has responded positively to our long-standing call for a single Gift Aid declaration that people can use to cover all their charity donations. Such a reform will make it easier for people to add Gift Aid to all their donations whether via smartphones, tablet computers or more traditional methods.

“Gift Aid is vital for charities, but it simply isn’t fit for purpose in the 21st century. By bringing it up to date, charities stand to gain hundreds of millions of pounds a year.

“We need this fundamental reform of Gift Aid to make it work for the millions of people who support the causes we all care about.”

The Government also announced a commitment to introducing tax reliefs on social investment (Red Book para 1.135)

John Low commented: “The Chancellor's committment to introducing a new tax relief to support social investment is very welcome.

“Britain leads the world in using social investment to make a difference to people’s lives. We need to increase the flow of investment capital to our pioneering social enterprises so they can create new ways of working, and innovative solutions to intractable social problems in Britain today.

“We will work closely with the Treasury to ensure that this welcome reform of the tax system does indeed deliver the social impact that innovative social entrepreneurs can create.”

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