As mentioned in my previous blog post, in response to the finding from this years UK Giving Report that charitable donations in 2011/12 are down 20% in real terms from the previous year, CAF and NCVO have launched a campaign calling on Government, businesses and members of the public to “Back Britain’s Charities.” I highlighted there that the campaign has five key asks, and it is these that I want to look at in a bit more in detail here.
Before I delve into our specific asks, it is useful to give some brief consideration to the broader question of using policy levers to try and encourage greater charitable giving. This should hopefully help to set the scene for why we settled on the recommendations that we did.
The main point to make is that there really isn’t any one thing that will suddenly result in a massive increase in charitable giving. I have spent most of the last five years doing policy work focused on ways to encourage a more philanthropic culture in the UK (and many others have spent far longer than that!), and I have found that coming up with ideas to boost giving is hard work. I am pretty convinced that this is a function of the fact that achieving cultural change is a slow process requiring action from multiple different actor, rather than being down to any paucity of imagination on my part…The simple truth is that there is no “silver bullet” (as the much over-used saying goes).
The difficulty of policymaking in this area is demonstrated by the fact that there have been many and varied efforts made by Government and others over the years to get people giving more, and despite this levels of giving have not noticeably shot up. Notable examples of these sort of efforts are the incremental improvements to tax incentives over the years (such as removing the £250 lower limit on donations eligible for Gift Aid), the Government-backed Giving Campaign (which ran from 2001 to 2004), and the efforts of the current Government through the social action strand of its Big Society agenda (including a White Paper devoted to giving).
As if coming up with killer policy ideas to drive greater giving wasn’t hard enough at the best of times, at the moment we also need to factor the reality of the current economic climate and the state of public finances if we want any proposals to be credible and realistic. This makes it very difficult to put forward any ideas which simply require the public to give more in donations or the Government to provide additional funding for charities.
With that background in mind, let’s have a look at the campaign asks.
1. Individuals should support charities by giving as regularly as they can, regardless of how much time or money they are able to give.
The idea here was to think of something positive that individuals could do that would not necessarily require them to give more, but would still benefit charities. From the charity’s perspective, the advantage of regular gifts is that they offer a greater degree of certainty and ability to forward plan than simply relying on sporadic donations, even if the amounts involved are not actually any larger. As the campaign develops, we will be developing more information to signpost people to ways that they can give regularly and effectively, and to other initiatives that they might want to get involved in, such as the Give More campaign.
2. The Government should modernise and promote Gift Aid and Payroll Giving, so every pound given to charity goes even further.
The idea again here is to find a way to help the value of charitable donations to be increased without simply asking people to give more. Our proposal is that the Government should modernise and promote the existing methods of tax-effective giving, particularly Gift Aid and Payroll Giving, so that more people are able to take advantage of them and enable their donations go further at no extra cost to themselves.
Of course, we have to bear in mind that there is a cost to Government because every pound given in tax relief on charitable gifts is a pound less to the Exchequer. One might reasonably contend that this is in fact the whole point, and that if the Exchequer loses out it will only be because of the success of a policy that the Government is firmly committed to (i.e. using the tax system to incentivise giving), but in straitened times that sort of logic doesn’t always apply. We should be aware of this possible reluctance on the part of Government, but also remember that it is their stated policy to use the tax system to encourage giving, so they have a responsibility to ensure that the incentives they support are fit for purpose.
In practical terms, we would like to see:
- Gift Aid brought online in a way that reduces administration for charities and makes the system fit with the way people live their lives and with new forms of digital giving.
- Payroll Giving reformed to bring it into line with the reality of careers in today’s world, so that we can make more of this under-used form of giving.
- The proposed Gift Aid Small Donations Scheme introduced in a form that ensures it is accessible to all charities that should be able to benefit from it.
3. Government should ensure that public bodies do not cut funding for charities disproportionately when making spending reductions.
This ask is obviously not a direct response to drop in charitable giving in quite the same way that the others are. However, we felt that it was crucial to recognise that State funding (in the form of grants or contracts), is another crucial source of income for many charities alongside charitable donations. We therefore need ensure that changes in public funding do not do not exacerbate the challenges charities are facing in terms of raising voluntary income.
This is definitely one ask where it was important to bear in mind the need for pragmatism: much as we might like to simply ask the Government to give more money to charities, this is not realistic when Government departments and local authorities are themselves having to make severe cuts to their budgets. Instead, we decided that the focus should be on making sure that when such cuts are being made, charities do not suffer disproportionately. There is already a strong precedent for this principle in guidance given out by the Secretary of State for Communities and Local Government, Eric Pickles, to local authorities in England.
4. Businesses should maintain or increase their support for charities – whether this is financial or practical help for good causes.
In a climate where it seems unfeasible or unreasonable for charities to ask for more money from the public or the Government, businesses may be the big untapped resource. Corporate giving still only makes up a small proportion of total giving, so there seems to be scope for greater corporate involvement. This need not necessarily be by increasing direct corporate donations (although cash donations remain hugely important)- there is also an enormous amount businesses can do in terms of pro bono help, skilled volunteering and enabling and encouraging workplace giving by employees.
5. Charities should work together with the Government to modernise and improve fundraising and to enhance their impact, so that every pound given goes further towards helping beneficiaries.
Charities themselves need to play their part in addressing the challenges they face. There is a lot that can be done in terms of developing public trust and confidence in the work of charities so that people are motivated to give more and confident in dosing so.
A key part of encouraging people to give to charity is asking them in the right way. This means that developing the fundraising capacity of charities is vital: as mentioned in my previous blog, those charities with resources to invest in fundraising seem to have been better insulated against the drop in donations, which shows the benefit of getting better at asking. Obviously this may be easier said than done for small charities with few or no full-time staff, which is why it is crucial for there to be support for development of fundraising skills.
The other piece of the puzzle is offering donors assurance that their money will be used effectively to address a cause that is important to them. This is why it is crucial that charities work as efficiently as possible and are clear about the value of their work. The more that charities can get better at measuring and communicating the impact their work has on the lives of people, communities and causes, the more they will be able to demonstrate to people the benefit of making donations.