Bring forward legacy gifts and make Gift Aid automatic, says CAF

In a briefing paper, CAF has outlined a number of methods it says should be introduced to inject money into the sector at a catastrophic financial time

The public should be able to bring forward legacy gifts and Gift Aid should be made automatic to help charities survive the Covid-19 pandemic, the Charities Aid Foundation has said.

In a briefing paper published yesterday, CAF said other methods of injecting money into the sector during a financially catastrophic time should include encouraging donations from wealthy philanthropists and speeding up efforts to unlock funding from dormant assets.

The proposals come after last week’s announcement of a £750m government stimulus package to help charities through the Covid-19 pandemic.

But charities have been critical of the amount of money announced, with the National Council for Voluntary Organisations suggesting the cost to the sector in lost income is a minimum of £4.3bn.

CAF’s proposals included temporarily removing the need for people to make Gift Aid declarations in order for charities to receive a 25 per cent additional benefit on every qualifying donation. 

It is estimated that £600m in Gift Aid goes unclaimed each year. CAF said this could bolster the sector until the end of 2021 as it recovers from the current financial crisis.

CAF also suggested “living legacies” whereby people could bring forward the kinds of gifts they might make in their wills to help charities immediately by allowing them to plan ahead and potentially borrow money against future assets.

A form of universal income that the public would donate to charities of their choice could also be introduced, CAF said.

A Covid-19 “big philanthropy pledge” could be established to encourage donations from wealthy individuals and businesses.

The £500m in the National Fund – which was set up in the 1920s to repay the national debt – could also be used to help charities, CAF said.

Dormant assets could in addition be used to support the sector during the pandemic, CAF said.

There is an estimated £2bn locked away in dormant assets, which are defined as those that are left untouched for 15 years or more and which cannot be reunited with their rightful owners.

The rightful owners are entitled to come forward at any time to reclaim their assets, which can include insurance and pensions, investment and wealth management, and securities. 

Big Society Capital could also be allowed to offer grants as well as loans for a period to help charities in financial distress, CAF proposed.

Rhodri Davies, head of policy at CAF, said: “In these times of crisis we need to employ radical ideas to bolster the charities that are an integral part of life in the UK. 

“The Chancellor recently brought forward welcome and important support for charities but was clear that he couldn’t intervene to help them all. We hope these bold ideas will be taken up by ministers, regulators and our colleagues in the charity world to unleash support that we need now to keep charities alive for the future.

“The contribution of charities has never been more evident and every course of action we can take to ensure they will be there to continue helping society’s most vulnerable needs to be considered at pace.”

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