The Department of Culture, Media and Sport announced its new Philanthropy Strategy on Wednesday as well as the publication of two key reports on developing charitable endowments in the UK. While the plans unveiled by Jeremy Hunt MP do not create any immediate changes to the legal or tax treatment of donations to charities, they do indicate a major review of the area.
In his speech on Wednesday, the Secretary of State for Culture, Olympics, Media and Sport, Jeremy Hunt, announced a major cross-government review of philanthropy, to culminate in spring 2011. Details were not given of the review, but it was emphasised that the review is aimed at identifying ways to grow and improve the culture of giving in the UK and harness its potential.
Matched funding and incentivising giving
The centrepiece of the launch was the announcement of a new matched-funding scheme that will leverage public money with private to support organisations, in particular in building up endowments. This will be vital to long-term survival and success in a climate of funding cuts. A total of £160 million is to be released into the arts sector through this scheme when public and private funds are considered together.
It is hoped that the Government's review will also take fully into account the range of interesting proposals beyond this matched-funding pot, however, including tax reliefs for gifts of art and lifetime legacies.
On key element of the new strategy is to promote and increase planned giving, including legacy giving. There is a stated ambition for the UK to become the first country in which it is the norm for 10 per cent or more of one's property to be left to charity.
The Government also appears to be interested in lifetime giving. It is hoped that this will translate into a serious consideration of 'lifetime legacies', which provide tax incentives for individuals to set aside funds for charities during their lifetimes while retaining the security of having some access to the income.
We have worked over the last few years with the European Association of Philanthropy and Giving (EAPG), the Charity Tax Group and others on lifetime legacies proposals. These arrangements have been a mainstay of US fundraising and particularly endowment fundraising for years and should be seriously considered in the review.
Hunt's speech recognised that it took a century to build up substantial US charitable endowments but thought that...