The chief executive of Voluntary Action Westminster says the government's U-turn over the cap on tax relief on charitable donations is not all good news for the sector
The sector won a major concession from the coalition government in persuading the Chancellor, George Osborne, to reverse the decision to impose a cap on tax-free giving. The #giveitbackGeorge campaign, headed by the National Council for Voluntary Organisations and the Charities Aid Foundation, managed to draw together a rainbow alliance of organisations, great and small, across the sector. The campaign coalesced around a simple message that the planned changes to tax relief on giving in the 2012 Budget would be extremely damaging to the sector. They pointed out that the tax proposals seemed to run completely against the government's stated policy on the big society, which places great importance on growing philanthropy. The immediate effects of donor desertion were anecdotally reported, and organisations reported cash-flow problems.
The sector has won a major victory, of which it is rightly proud. However, there are disconcerting elements to this victory. First, the campaign positioned the sector as arguing for rich donors to have preferential tax regimes. Second, the issue on which the sector most vociferously stood up to central government was to protect the wealthy and not the least well off.
The campaign exposed existing arrangements that enable rich donors to offset tax against giving. This means, in effect, that there is a two-tier tax system in which richer people can decide if, and to what extent, they pay taxes. Rather than paying their taxes, they can instead donate money or buy a painting or support a social cause. Many might argue that this is a good principle – that they would like to take an ethical decision not to fund the armed forces or the police, say. Those without children might decide that schools were a waste of money and those in good health might choose not to support the NHS. By supporting the existing arrangements, the sector is endorsing the right of the better off to decide societal priorities. The key point is that this option is not available to the majority of the population.
The sector's problem is that, in arguing for continuation of the status quo, it played a central role in supporting the right of richer people to decide what taxes they should pay. Why is this important? As BBC Radio 4's excellent Analysis programme on last summer's riots argued, a pre-eminent condition for society to function is that we should feel that the law applies to everyone equally. In campaigning, in effect, for a two-tier tax system, the sector got itself on the wrong side of the argument.
The second and more powerful point relates to the purpose of the charitable sector. In the Give it Back, George campaign the sector has lobbied hard for big donations that generally go to big causes (and big charities). But at the same time, the most deprived in the community are seeing unprecedented attacks on their living conditions and life prospects, with cuts to housing, welfare and disability benefits, as well as cuts in support services. Often this has meant cuts to small local voluntary organisations and community groups that do not have recourse to big philanthropy.
Where, then, was the sector-wide campaign against these cuts? The website? The tweets? The emails? Of course, there are some notable exceptions – Shelter and the Joseph Rowntree Foundation, for example - but there is no hourly drumbeat of tweeting anger. By choosing to fight so publicly for big donations, the charitable sector has created an impression that it is more interested in its own needs and those of the rich than the most disadvantaged in society. I believe that the sector will regret this.
Bernard Collier is the chief executive of Voluntary Action Westminster and a trustee of the National Association of Voluntary and Community Action. He has more than 20 years experience leading not-for-profit organisations and working for local communities