Government commitment to philanthropy is still strong and charitable giving is of great importance to the sector, is one message in the recent Government action plan for third sector organisations hit by recession.

Real help for Communities: Volunteers, Charities and Enterprises, published by the Office of the Third Sector (OTS) this month, aims to address the challenges faced by third sector organisations within the current economic context. 

"The third sector is brilliant at knowing how best to provide real help for people who need it most.  We need to make the most of the skills and expertise the sector has to offer”, Kevin Brennan, Minister for the Third Sector, said. “That's why we are acting to invest in helping the third sector get stronger now and in the future.”

The action plan announces a number of measures to forestall a potential drop in giving, including an OTS plan to develop further channels of communication between the Association of Charitable Foundations (ACF) and government departments.

In addition, the Government will host a Corporate Giving and Philanthropy Summit, at which it will announce the appointment of a Giving and Philanthropy Ambassador who will support Ministers and the OTS in championing giving and philanthropy.  

Of less certain benefit is another report that HM Revenue and Customs is currently exploring possible research into the potential effects of redirecting the higher-rate element of Gift Aid from donors to charities.

“While understanding the attraction to charities at this time of making such a change, I would be urging caution of the potential risk here,” said David Emerson, chief executive of ACF, in response to the possibility of research into Gift Aid. “We simply do not yet know enough about donor motivation to be clear about the impact of such a change, and in the worst scenario it could even lead to a significant drop in giving from such donors.

“Now that we have the new Centre for Charitable Giving and Philanthropy established, surely we should not be rushing into such a decision before the Centre has had time to discover more about donor motivation?  I would also speculate that with the new duty on the Charity Commission to encourage charitable giving as established in the 2006 Act, it might also be concerned about the impact of such a change without clear evidence that this would not discourage giving or donations to the sector.”

Since the plan was launched, Stephen Timms, financial secretary to the Treasury, has told third sector leaders that the Treasury may explore a shift to an ‘opt-out’ system for Gift Aid, rather than the present ‘opt-in’ scheme.

Other aspects of the plan highlight a total support of £42.4m to the third sector. This included £500,000 for the School for Social Entrepreneurs to increase the number of young people it trains to set up sustainable community enterprises to 800 in the next three years.

A volunteering brokerage scheme will aim to give 40,000 unemployed people new skills. The Department for Work and Pensions will spend £10m over two years on this scheme, for those who have been unemployed for at least six months.

The two largest commitments announced in the action plan are unlikely to directly affect funders but may have implications for some of the charities that they support.

A community resilience fund, of £15.5m, is designed to help small organisations that address recession-related need in the most deprived areas. A modernisation fund of £16.5m will provide for specialist advice to organisations that want to collaborate or merge.

Other initiatives highlighted in the action plan to enable third sector programmes include a national campaign to raise awareness of the government’s commitment to pay all invoices within 10 days, which will improve cash flow for small organisations.

The full action plan is available on the OTS website.