FUNDRAISING NEWS: Gift Aid pledges swell by £220m

Giving through Gift Aid and covenants grew by £220 million between 2000 and 2002, according to new research released by Charities Aid Foundation.

The figures represent a 13 per cent growth in giving through these methods and bring the total amount this year of tax-efficient donations through Gift Aid and covenants up to £2 billion.

"Tax-efficient donations now represent almost one third of all giving," said Catherine Walker, head of research at Charities Aid Foundation. "In time we hope that charities will be able to realise the full potential of this medium."

However, Walker admits that the organisation has been unable to fully assess the changes and growth in Gift Aid following the sweeping changes to giving in the 2000 Charities' Tax Review.

The Government's proposals intended to make it more inclusive and easier for charities to use Gift Aid and encourage more people to make use of it.

Changes included merging existing deeds of covenant into Gift Aid. Deeds of covenant formerly allowed people to claim back tax after pledging to support a charity over a fixed period of time.

"We're not going to be able to accurately assess the real growth of Gift Aid for another couple of years until the whole process has settled down," said Walker.

"The problem for us is that the Inland Revenue cannot separate the old free-standing Gift Aid from the new version which includes covenants," she said.

"This means we can't tell what is the actual real growth of Gift Aid or how much the new figures reflect the additional income brought in by merging covenants."

She believes that the tax changes account for the drop in combined income in 2000 (see graph), which was interpreted by many as an indication that the mechanism was failing. Last year the figures increased at the rate seen in 1999.

Walker warns that as long as the Inland Revenue continues to publish combined figures for Gift Aid, covenants and company donations, it will be practically impossible to separate and assess the real growth of Gift Aid as a medium.

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