Conservatives announce proposals to boost charitable giving

Breakthrough Britain, the final report of the Conservatives' Social Justice Policy Group led by former leader Iain Duncan Smith, was published in July. The main focus of the 650-page report is on tackling poverty, but among its almost 200 recommendations are 22 directed at the third sector, eight of which concentrate on increasing charitable giving.

1. Gift Aid should be made easier to claim

The report proposes that to make it easier for third sector organisations to reclaim Gift Aid, a certain percentage, perhaps 80%, of all individual donations should be assumed to come from taxpayers. This percentage of all individual donations would qualify for Gift Aid without the paperwork currently needed to 'opt-in'.

2. Launch a 'Trustmarking' website

An independent website should be created to accredit the work of smaller poverty-fighting third sector organisations and promote giving to them. Run as a social enterprise, the site would help funds flow to charities getting good results. A fixed fund of £50m would generate an extra £150m for those taking part.

3. Introduce Charitable Remainder Trusts

Charitable Remainder Trusts (CRTs) should be introduced as tax-efficient vehicles for planned giving. These enable a person to donate assets while receiving tax benefits and income from them. Many assets such as second homes could be transferred to charities during their owners' lifetimes.

4. Boost Corporate Social Bonds

To raise levels of corporate giving, a drive should be launched to increase the number and value of Corporate Social Bonds. These raise funds from companies that forego capital growth and interest income on their investment – which is invested in local projects – but are guaranteed to receive back the full investment after five years.

5. School Giving Vouchers

Through this one-off initiative to help instil habits of charitable giving, all Year 6 pupils in England would be issued with a £5 giving voucher each term. After presentations by third sector organisations, they would donate their voucher to the charity of their choice.

6. Community Growth Trusts

Smaller third sector organisations with significant growth potential could apply for the new legal status of Community Growth Trust. This would entitle visionary social entrepreneurs and community groups to deliver a progressively increasing range of public services to their community as a reward for proven competence.

7. Community Foundation Challenge Fund

A new £50 million Challenge Fund could significantly boost grant-giving to poverty-fighting third sector organisations through the national network of community foundations. The foundations' track record suggest that they could generate an additional £100m in private sector giving, making a total fund of £150m. Invested in an endowment, this would enable £7.5m of grants to be distributed to poverty-fighting groups each year in perpetuity.

The Government subsequently announced a new local endowment fund, also for £50m, in its final report of its third sector review. Similar to the Conservatives’ proposals, the fund is aimed at supporting frontline organisations tackling poverty and other social issues (see next article).

8. Establishing a third sector institute

The evidence base for policy-making on many third sector issues can be patchy. The Social Justice Policy Group fully endorses and supports the call to establish a third sector equivalent of the Institute for Fiscal Studies, with government funding up to half its costs. Mapping the extent and impact of state funding on the sector should be one of the body's first research projects.

All proposals in the report will now be considered and debated throughout the Conservative Party and more widely. The leadership is expected to reach its conclusions on policy next year in preparation for the next election manifesto.

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