10 APRIL 2012

An open letter to Prime Minister David Cameron:

“Don't block philanthropy; unleash it!”

Dear Prime Minister,

Philanthropists are often individualists, taking their own path of hard work and good fortune to create wealth and invest where they see the greatest opportunities and needs. But they are united by their desire to contribute their talents and resources to achieve a real impact for the better.

And to do that, they look for a framework of regulation and taxation that encourages philanthropy without legal delays or financial obstacles.

Thus we are deeply dismayed by the proposals from the UK government in its recent budget to enforce a restrictive cap on tax efficient giving.

It is claimed, without producing a scrap of evidence, that these measures are essential to prevent tax evasion and fraud. We doubt that. Instead, these plans, if enacted, would limit giving, damage hard-pressed charities and undermine this government's hopes of creating a “big society”.

Indeed, within days of the budget, it has become clear that these vague and illconsidered proposals:

• Are already discouraging major giving, with donors informing charities privately of their intention to put on hold plans to give five-, six- or even seven-figure sums.
• Risk destroying a conducive context for major giving that many have worked hard to create, creating doubt, uncertainty and mistrust about this government's intentions for philanthropy.
• Will, if enacted, significantly hamper the work of many charities, large and small, as almost half of all giving comes from just 7% of donors through significant giving.
• Can only undermine this government's idea of the “big society” that envisaged such a key role for donors, charities, local communities and volunteers alongside a smaller state.
• Are a retrograde step to take at a time when needs are growing amid tough times in the UK and worldwide, and when national and local government support for charities is falling fast.

It is telling that these naive proposals have come without consultation with either philanthropists or charities, and without – it would appear – discussion with those ministers with charity, arts and other responsibilities who would immediately realise the implications.

The UK should take a lead in creating a legal and financial regime that can maximise giving.

By listening to the voice of philanthropists and major donors, such as those engaged in the Ambassadors for Philanthropy, an efficient and effective giving regime can be created that will empower philanthropy in the UK and be an example around the world.

Already, many philanthropists are expressing their worries and anger at this threatened developing, and contacting Ambassadors for Philanthropy to declare:

• “This will be ruinous for many charities and voluntary sector
  organisations that have seen their funding from government bodies cut. Now they will see many large donations from philanthropists dry up as well.”
• “I, for one, have been in the process of considering how to make current year donations that in total are a seven-figure sum. This has been stopped dead in its tracks and I will not proceed until the uncertainty caused by this announcement has been removed.”
• “The government needs to drop this perverse proposal before any major damage is done. Charities are correct in saying that it will significantly hit large donations.”
• “The government says that it is pro-philanthropy, and then absurdly limits the amount people can claim against their income. How do they imagine that any future capital programme will succeed without major donations? Do they think people like me who give money are motivated by tax avoidance?”
• “This is a cack-handed assault on philanthropic giving.”

Philanthropy is a promising force for good, driven by talented people with great knowledge and a deep commitment to address vital causes and meet great needs. Today, it is doing wonderful work within its existing restrictions here and overseas.

But there are almost no limits to what more it could achieve if released from the shackles of stifling red tape, bureaucratic tax rules and out-of-date laws that in country after county are holding it back from fulfilling its true global role.

Thus we call on you, prime minister, to commit to drop these damaging proposals now and use the forthcoming Giving Summit to draw on the knowledge and commitment of major donors to begin enacting reforms that can unleash the power of philanthropy as a force for good.

Yours sincerely.

DSS

Dame Stephanie Shirley, Co-Founder, Ambassadors for Philanthropy

The British Government’s Founding Ambassador for Philanthropy -09-10

Founder, The Shirley Foundation