Charity Finance Group calls on next government to increase Charity Commission budget

Charity Finance Group
Charity Finance Group

The Charity Finance Group has called on the next government to increase the Charity Commission’s budget and invest in a sector-led campaign to improve public awareness of Gift Aid.

In a paper published yesterday, the CFG outlined five priorities for the next government. These also include enabling charities to reclaim irrecoverable VAT, passing legislation to enable charities to avoid triggering large debts if they close their pension schemes to future accruals, and ensuring that funding to improve financial management skills in charities is included in future spending programmes.

The paper, called Supporting Charities To Do Good, says that without additional resources the Charity Commission will struggle to monitor the sector.

"We welcome the decision by the government to provide an additional £8m to the Charity Commission over the next three years," it says. "However, the commission’s budget has been cut by more than 50 per cent since 2007/08. While we accept savings are required across government, we believe that there is a clear case for reviewing the Charity Commission’s budget."

It says that government spending on the regulator should be seen "as a small investment for a substantial return created through the public good delivered by charities".

It says: "We urge the next government to increase and put on a long-term footing the funding of the Charity Commission, with a view to enabling it to fully carry out its investigations and compliance work without comprising important guidance and support functions for charities and trustees in meeting charity law requirements.

"A properly resourced regulator will help to maintain public confidence in the sector and ensure that charities can continue to generate income to deliver social change across our communities."

The paper says that charities are missing out on hundreds of millions of pounds of Gift Aid every year and calls for a new campaign to educate people about the scheme.

"Research on behalf of HM Revenue & Customs indicates that donors are more likely to give if they understand what Gift Aid is and how valuable it is to charities," it says.

"HMRC research also indicates that investing in improving public understanding of the Gift Aid scheme would help to reduce error in claims, reducing the tax gap and saving public money."

The paper warns that charities face "significant headwinds" because of the fragility of the global economy.

"The deficit remains and all major parties have proposed continued cuts to public spending in order to balance the books," it says. "Households are still recovering from the recession and there is pressure for increased levels of transparency from all institutions."

But it says that, despite this, the CFG is optimistic about the future of the sector.

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