Brian Lamb: The tax relief protest has stirred up debate about the value of the sector

The tax relief issue has raised questions about the extent to which the public regards charities as valid examples of public benefit worthy of being subsidised through taxes, says Brian Lamb

Brian Lamb
Brian Lamb

One thing that has not been in dispute during the recent political row about tax relief for philanthropic giving is the worsening financial plight of the voluntary sector. Everyone knows times are tough for charities, so it is no surprise that the sector has united around this issue.

Communications and campaigning staff have done a great deal to raise awareness of the difficulties many charities and their beneficiaries are facing, but ironically the same staff are often among the first to suffer when charities make cutbacks. These cutbacks will inevitably damage their capacity to highlight the key work charities do to help communities.

Cuts to the sector's campaigning and communications capacity did not lead directly to the government's proposal on tax relief. But the weaker that charity communications teams become, the more limited Whitehall's understanding of charities and their beneficiaries will be.

Now could be the time to change that. The Give It Back, George campaign has shown just how formidable the sector can be. It has turned the screw on the government and gained significant media coverage.

One of the interesting aspects of the tax relief saga was the initial focus on the government's claim that it was about preventing tax breaks for millionaires. This made it difficult for the sector to get its message across at first because it was unable to frame the argument on its own terms.

Some people still see it primarily on these terms and remain unconvinced about the merits of allowing millionaires to decide how their taxes are hypothecated to charities. Furthermore, some commentators and poverty campaigners have questioned the need for charities to rely on large-donor philanthropy.

But by working together the sector has won the overall media and political battle against the government hands down, as the Chancellor's retreat has shown.

The long-term impact of this issue is hard to gauge. Much good might come from highlighting the precarious state of charity finance and the impact this is already having on everything from research to the provision of services. The coverage could also be used to provoke a much broader debate about sustainable funding and whether the big society concept is built on unrealistic assumptions of the sector's capacity.

However, it has also raised questions about the extent to which the public regards charities, ranging from arts institutions to private schools and organisations set up as personal hobby horses, as valid examples of public benefit worthy of being subsidised through their taxes. Who thought Chancellor George Osborne would bring the debate on public benefit to a wider audience?

Whatever the final resolution on the future of tax breaks for philanthropy, the sector needs to use this opportunity to provoke a much wider debate about the value of the sector and promote its own vision; otherwise events will shape future debate.

FACT FILE - CAMPAIGN ON TAX RELIEF CAP

Chancellor George Osborne announced plans in the Budget to cap the amount of tax relief individuals can claim to a quarter of their income or £50,000, whichever is higher, from April 2013.

The Give It Back, George campaign is calling on Osborne to reverse his decision and exempt charitable donations from plans to cap personal tax reliefs.

More than 3,300 organisations have backed the campaign so far.

 

Brian Lamb is  a consultant and chair of the NCVO's campaign effectiveness advisory board

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