Christopher Goodhart is absolutely right when he calls for greater focus on developing philanthropy amongst the mass affluent; people with sufficient disposable income to make a real and sustainable difference to the arts in this country if they are encouraged to give.
Whilst it would be good to facilitate means for such people to give their tax relief to charity, I think that there is a bigger problem - we have to get them to realise that there is a tax break in the first place! Charities are very good at promoting lower rate tax relief largely, one presumes, because they get to claim it. However few charities, and worryingly few arts charities, devote near as much effort to promoting Higher Rate Tax relief. Perhaps they don’t do it because there seems to be no immediately benefit in doing so. But getting the message out could help dispel the misconception that there is no tax efficient giving in this country and, more importantly, help to strengthen their donor relations. In this faintly ridiculous debate about “US style philanthropy”, the one thing that is rarely mentioned but entirely relevant and applicable here is the need for better “donor care” across the board.
As higher rate tax payers learn that there is a tax relief available, so it will be vital for the Government to help facilitate such donors to claim the relief available, particularly those on PAYE. And if, from a position of knowledge, those donors then chose to hand their available relief onto a charity, so much the better.
These are the main arguments we used on the Treasury/HMRC Charity Tax Forum, when we were faced with a broad call from the wider charity sector for the abolition of Higher Rate tax relief under Gift Aid in favour of a slightly more generous Gift Aid – a move that the Treasury’s own research showed would adversely affect giving to the arts. Fortunately this “Composite Rate” proposal has been shelved.
As to tax relief on the Gift of Art and facilitating gift of goods through charity shops – we couldn’t agree more!
Philip Spedding is Senior Manager, International & Individual Giving
at Arts & Business