In Unicef’s London offices last week, all the focus was on the Sahel. A long belt of drought-ridden terrain running for hundreds of miles between the Sahara and the savannahs of Sudan, the region is in the grip of a food crisis aggravated by the fighting in Mali, which has sent refugees fleeing into the neighbouring west African countries of Mauritania, Niger and Burkina Faso.
Malnourished children are already turning up at feeding stations and health clinics, and a full-scale humanitarian emergency is around the corner. Just months after a report criticised the international community – governments, NGOs and the UN – for being too slow to react to warnings of last year’s famine in east Africa, there is a real desire not to repeat mistakes that cost thousands of lives. Charities know only too well that swift action is urgently needed.
Public fundraising is already under way for the Sahel, but it takes time. It’s in situations such as this, with a million children at risk, when rich individuals can make all the difference, said David Bull, executive director of Unicef UK.
“In the charity world, high-level donors are classed as individuals who have the capacity to give at £100k or more,” he said. “In 2011 they generously donated nearly £1.5m to Unicef UK’s life-saving work with children around the world, and are crucially a first point of call when an emergency breaks and we need money straight away to help keep children alive.”
Bull is just one of hundreds of those across the charity, aid, arts, health, university and church sectors who are reacting with unprecedented anger to George Osborne‘s “charity tax” – a cap on tax relief for wealthy donors. A survey of wealthy philanthropists by the Charities Aid Foundation has suggested that eight out of 10 will rethink their charitable donations because of the changes. The cap on tax relief of £50,000 or 25% of annual income will, those surveyed said, force them to cut their donations by as much as 40%.
The contradictions in the government’s approach have left the charity and other sectors which are dependent on donations bemused as well as furious. At a time when the Treasury is tightening the purse strings on public funding, ministers have gone out of their way to say they want philanthropists to fill the gap. Yet the Treasury then imposes tax rules which will deter them from doing so – and which run directly contrary to David Cameron’s vision of a “big society” driven by vibrant charities and voluntary organisations.
Those reliant on public generosity see a funding chasm opening up beneath them because of an ill-thought-through attempt to hit rich people which failed to spot that many wealthy like to give money for good causes, partly because the tax system encourages them to do so. One aid organisation has already seen a £150,000 donation fall through because of the cap.
From international aid to the art world, the fears are the same. Nicholas Hytner, director of the National Theatre, told the Observer that the policy would be so damaging that he could not believe that the government wanted to introduce it. He said one donor who had been in line to give £250,000 to the National had said he would have to rethink.
“Although technically the relief cap will not come into effect until 2013, my very real concern is that the changes will begin to impact immediately as wealthy individuals start to think ahead about their tax affairs this year,” said Bull, who believes crucial funding is already drying up as donors see their incentive to give vanish. “Put simply, this new legislation will have the unintended consequence of discouraging donations to charity by philanthropists, leaving some of the world’s most vulnerable children as the real losers. The government must act now. Children cannot wait.”
In a matter of days almost 800 individual organisations and more than 1,000 individuals have signed up to a campaign called “Give It Back, George”, while there has been a barrage of representations to ministers and MPs. The Charities Aid Foundation has held talks with the Treasury to discuss the impact of the “charity tax”, which Chris Groves, partner in the wealth planning team at law firm Withers, said was a “significant attack” on charitable funding.
Leslie Morphy, chief executive of Crisis UK, said it was unhelpful for donors “to be treated as tax dodgers”.
There is also a growing call for a boycott of the “giving summit” due to be held in Downing Street next month. The high-profile event was supposed to highlight the government’s wider philanthropic agenda and relaunch Cameron’s big society notion.
It is just over a year since the arts sector, deeply worried about dwindling public funding, was reassured by a keynote speech by culture secretary Jeremy Hunt. He praised British “philanthropic traditions” and promised a drive “to boost private giving” to the arts – even offering rewards for big donors through the honours system.
Those words ring hollow with many this weekend. In a sign of a lack of joined-up thinking in government, Hunt only found out about the new tax plans on the day of the budget and his concerns have been relayed to the prime minister and the chancellor.
Amid signs of deep unease in the cabinet and across government, serious momentum is building behind calls for a U-turn. “At a time when it is stated government policy to encourage more philanthropy for the arts, it is completely ridiculous to provide limits to the amounts that are given,” said Charles Saumarez Smith, chief executive of the Royal Academy of Arts. Stephen Deuchar, director of the Art Fund, warned of a “devastating impact” on planned fundraising and capital appeals.
In London last week Macmillan Cancer Support opened its new unit, built with the help of numerous sizeable donations. A £100m development, the University College Hospital Macmillan Cancer Centre, is a beacon of excellence of the kind the charity would like to see in every city in the country.
”Ten years ago we had a vision to fundamentally change the way cancer care is delivered by ensuring patients are at the centre,” said Ciarán Devane, chief executive of Macmillan. “It’s incredible to see this –a big impact project – opened, but this is precisely the kind of project that needs commitment. If we are less certain about our income, we can’t do it.”
“From Macmillan’s point of view, how do we continue to provide as high a standard of service when today we have two million people with cancer in the UK and in 2030 we will have four million?”
“It’s all about how we are going to meet those kinds of challenges in an ageing society, it’s not about setting us back. I say this more in sorrow than in anger, this is a mistake. It should be fixed, and fixed quickly.”