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by Nick Hurd MP, Shadow Minister for Charities, Social Enterprise and Volunteering.
Good ideas can sometimes flounder in the wake of bad design. One such idea, whose design is ripe for an update, is Gift Aid.
Gift Aid is the most important direct way that the Government can help citizens help the voluntary sector through giving and philanthropy. It works on the principle that we should not tax people on what they give to charity. It sends an essential message about how we view donation and philanthropy: as something quite distinct from business or from state provision.
This is more than a philosophical distinction: it goes to the heart of what makes the voluntary sector independent and innovative. And yet the Gift Aid system, in practice, is plagued by red tape and overly-burdensome bureaucracy.
The current design of our system for Gift Aid could be so much better. It is so very archaic that, today, in the 21st century, a donor is required physically to fill in a piece of paper declaring that he or she pays taxes. This necessitates a vast archiving system for the biggest charities so that the declaration of every individual donor can be checked. This must be repeated for every single charity. Who benefits from this bureaucracy? In all truth, no one.
Donors, charities and HM Revenue and Customs all spend their time mired in red tape. Organisations that could otherwise be spending their time committing resources to the end of social good are caught up in it all.
Little wonder that take-up of Gift Aid is so low. According the 2005/06 UK Giving Survey only 34% of givers used Gift Aid for one or more of their donations. In the wake of the 2007 Budget, Gordon Brown announced a review of Gift Aid, which charities hoped would result in significant reform.
However, in the event, the review produced nothing more than a few minor tweaks, confirming suspicions that its only real purpose was to distract attention from the £90 million a year loss from the cut in the basic rate of tax.
A recent consortia of umbrella groups have attempted to get the Treasury to commit to a timetable on moving to an 'opt out' system of gift aid. This is proving to be a frustrating process.
There is a real danger that, as the recession begins to bite, the Government will take Gift Aid reform off the agenda. That is why today I am asking for your help. I want to start an ongoing conversation with you that, I hope, will ultimately help Government Get Gift Aid Right.
I want to hear your ideas as to how we can make Gift Aid work better. What experiences have you had with the overbearing bureaucracy and burden posed by the current regulations? What would make your life easier when it comes to attracting donors who wish to claim? What measures – simple or complex – could we take to make your lives and your donors' lives easier?
In short, how could we, together, create a system that is better for donors, better for the Government, and most importantly, makes your lives easier and your funding drives that much more effective? No experience is too small, too prosaic or mundane. Gift aid should be there to help you. If there is any point at which it becomes a hindrance to you – no matter what that point may be – I want you to tell me about it.
By working together, I believe that we can create a better system from the bottom up that is good for your organisation and good for twenty first century giving. So let us see what we can do and what ideas the conversations yield. Your contributions to this debate could be very important indeed; they could mean, not just a better design for Gift Aid, but moreover the safeguarding of the distinctiveness and independence of our sector for many years to come.
Nick Hurd MP is the Shadow Minister for Charities, Social Enterprise and Volunteering.
He can be reached at hurdn@parliament.uk or by writing to him at the House of Commons.