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Top charity execs: Government cap on tax relief will hit donations from major donors

12 April 2012

Nearly nine out of ten top charity executives believe the Government’s new cap on tax relief will hit donations from major donors, according to a new survey published today.

A survey of 120 charity chief executives and senior executives conducted by the Charities Aid Foundation revealed deep concern about the effect of the Chancellor’s decision to cap tax relief, with 78 per cent of executives calling on the Government to reverse their decision.

The survey, carried out over the Easter weekend, found more than half believed the Budget would lead to a significant reduction in income from major donors, with 56 per cent of them believing that major donations would fall by at least 20 per cent.

Charity executives also expressed deep concern about the potential impact on their own charities’ income, with half of those expecting a reduction in income predicting their major donations would fall by at least 20 per cent.

The survey found:

  • 88 per cent said the decision would have a “negative impact on the value of donations from major donors”
  • 89 per cent said they were concerned about the implications of the tax relief cap on the charity sector
  • 82 per cent said the decision “will have a negative impact on the relationship between the wealthy and charities”
  • 78 per cent of charity executives called on the Chancellor to reverse his decision to cap tax relief on charitable donations
  • 91 per cent said the Government should have held consultations before deciding on the cap

More than 2,200 charities and individuals have signed up to support the campaign against the charity tax - Give it back, George.

John Low, Chief Executive of the Charities Aid Foundation, said:

“This survey shows the widespread alarm and despair among charities at the Government’s decision to cap tax relief on donations.

“There are fears across the charity world that donations will be hit, which means the vital work that charities do will be damaged at a time when demand is high and public spending cuts make the charity safety net even more important than ever.

“Major donations support a huge number of projects and services for the public good. We need to encourage more philanthropists to give to these causes, not dissuade them through the tax system.

“It was the intent of Parliament that these tax reliefs be used to promote major philanthropy, something which was confirmed in the Government’s White Paper on giving last year. Capping tax relief on charitable donations flies in the face of the Government’s own policies and aspirations for a big society.

“We need the Government to embrace and celebrate our modern philanthropists for the good of society as a whole. It was good to see the Prime Minister this morning confirm his commitment to encourage charitable giving.

“Ultimately, it will not be the rich who will lose out. It will be the most vulnerable people in society, and the other causes charities support.”

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