New Philanthropy Capital (NPC) is launching a major UK study on why donors give. The Money for Good UK survey, supported by the Pears Foundation, Oak Foundation, Bill & Melinda Gates Foundation and NESTA, will survey over 2,000 medium- and high-income households as well as undertaking in-depth interviews.

The launch comes hard on the heels of a government announcement of a cap on tax relief for donations. Announced in last month’s budget, the changes mean that relief on giving will be capped at £50,000 or 25 per cent of annual income, whichever is the higher, from April 2013.

The move has raised a predictable furore among donors and charities alike. According to a survey carried out by NCVO in the last week, nearly half of over 200 major UK donors approached say that the cap will force them to cut donations by more than 40 per cent. The Cabinet Office has received many representations from major donors protesting the cap and one charity, Stewardship, has calculated that some £11.7 million in donations in the last year would have been at risk under the government’s proposal.

Resistance is mobilizing around the Give it Back George campaign, launched by NCVO, Charities Aid Foundation and Philanthropy Review (the George in question is George Osborne, UK finance minister). 546 organizations and 678 individuals had signed up to the campaign for repeal of the cap within days of its launch.

The government response, while conciliatory, does not betray any intention to relent. The government department responsible for fiscal matters, HMRC, has said in a statement that draft legislation will be released in the usual way for consultation later in the year, adding, ‘philanthropy is important to this government and the decision to cap reliefs against charitable giving was not taken lightly. It is for this reason that the government will explore with philanthropists ways to ensure this new limit will not significantly impact upon charities that depend on large donations.’

Against this background, the results of the Money for Good study, to be published in November this year, are likely to make interesting reading for both sides in the debate. With public funds to charities being cut and the demand for their services rising, NPC’s press release about the research describes the need to develop private philanthropy as ‘greater than ever’, and the study is likely to conclude, either implicitly or explicitly, that incentives to private donors to give should be increased.

Sources
Philanthropy UK, 30 March 2012
NPC press release