Charities Aid Foundation says sector Gift Aid proposals remove donor choice

Charities Aid Foundation says sector Gift Aid proposals remove donor choice


The Charities Aid Foundation (CAF) has rejected the proposal made by a coalition of sector umbrella bodies to the Government's consultation on Gift Aid.

The Charity Tax Group, Acevo, the NCVO, the Institute of Fundraising, the Charity Finance Directors’ Group and the National Church Institutions last week proposed that charities should be allowed to claim a fixed percentage of their total donations in Gift Aid. This would be based on an estimate of the proportion of donors who are taxpayers and on the proportion of voluntary income the charity receives. Representatives said that their suggestion would simplify the complex audit trail necessary for reclaiming Gift Aid as well as increase the sector’s revenue through charitable tax relief by £400m each year.

CAF’s submission to the Government’s Gift Aid review rejects the idea and warns against proposals that would turn the system into a “fixed pot of money available to the sector”. CAF says that removing donors’ control over their giving risked alienating them, and its submission states that “proponents fail to understand that Gift Aid is a donor incentive and is not in the gift of the charity or the Government.”

The idea of making Gift Aid an opt-out system, in which the presumption would be that donors wanted the charity to claim Gift Aid on their donations, is also rejected. It says such a move would, “in essence move Gift Aid from a tax rebate to a grant system”, and thereby erode the principle of donor choice.