The Institute of Philanthropy is lobbying for changes to tax laws to enable UK citizens to take advantage of an American form of giving that has so far netted US charities pledges worth more than £53bn.
The giving mechanism would be known in the UK as a 'lifetime legacy' and aims to provide a tax-efficient way of giving to charity after the donor's death, and provide an income while the donor is alive.
The institute is hoping that tax changes to enable lifetime legacies will be included in the Chancellor's pre-Budget speech next month.
Under the institute's proposals, donors that set up a lifetime legacy elect to donate to their chosen charity a capital sum which could comprise cash, shares, insurance or property. This sum would be held in trust for the charity, but an agreed income stream would be paid to the donor until death.
The institute claims that the benefits to charities from lifetime legacies would be the certainty of having a locked-in gift, a higher net gain because the money is already tax-free, and the ability to develop the relationship with the donor.
In the US, this method of giving offers the donor various forms of tax relief, but existing UK tax laws must to be amended to provide equivalent benefits.
Current legislation dictates that a donor should not retain an interest in or control over a charitable gift, and should not derive any benefit from a gift.
The institute also argues that lifetime legacies would help to bail the UK out of its looming pensions crisis, because it would help people fund their own pensions. It would also boost the UK's giving culture by encouraging people to donate their accumulated wealth, not just their income.