The Community Foundation for Ireland seeks reform of taxation on larger donations
Pre-Budget Submission published
Statement by The Community Foundation for Ireland
Budget 2021 should be used to support charities, community and voluntary organisations facing a surge in demand for services and a fall in donations as a result of Covid-19, according to The Community Foundation for Ireland.
In a pre-budget submission, the Foundation which will provide €16m in grants to community groups this year, says straight forward measures in both the budget and the Finance Bill could provide an important lifeline of support to groups working with vulnerable people.
The Community Foundation for Ireland, which has supported communities for over 20-years, is making two recommendations:
· Ensure all donations intended for communities go to communities by removing the administrative burden of tax relief for donations over €5,000 from charities to donors. This is the only outstanding recommendation of the 2012 Forum on Philanthropy Report on Major Gift Incentive.
· Reduce the Capital Acquisitions Tax on donations from inheritances on a € for € basis.
Announcing the publication of the submission, Denise Charlton, CEO said:
“The Covid-19 pandemic has created a perfect storm for the charity, community and voluntary sectors with hugely increased demands for services and supports coinciding with a drop in donations, gifts and funding.
Budget 2021 and the Finance Bill are opportunities for Government to address the shortfalls in financial support by taking imaginative measures which would address long-term sustainability and planning by encouraging larger donations.
At present in Ireland less than 1% of donations are greater than €5,000. Efforts to boost this have been hampered by a tax relief regime which is not delivering for either charities or their larger donors, with money intended to benefit communities instead going on taxes. The estimated loss is €50m since the current measures were introduced in 2013.
In this submission The Community Foundation for Ireland sets out practical steps which if adopted by Government would encourage and nurture philanthropy, gift giving and legacies to ensure our communities can secure larger donations which will allow for medium to long term strategic planning for the future.”
Chair of the Foundation, Mike Gaffney added:
“Older people, people with disabilities, those who struggle to make ends meet, those trapped in violent relationships and many others have borne the brunt of the isolation and loneliness caused by the restrictions needed to keep us all safe.
For them hope, support and help often comes from charities, community and voluntary groups. Meals on Wheels, newly developed virtual supports, neighbours who will make a run to the shop or pharmacies are literally lifelines.
Yet the upsurge in demand for such supports is happening at a time when fundraising has been largely shut down or very severely reduced. Charity shops have had their doors closed, there are no street collections while fears over household incomes have also hit online donations.
It is time now for Government to take overdue steps to address these concerns. By doing so it will not only help in the immediate emergency but will ensure that our essential community services can plan and prepare for whatever the future may have in store.”