Small Charitable Donations Bill

Memorandum submitted by Kidneys for Life (SCD 01)

1. Kidneys for Life fundraising for MINT is a small medical charity based at Manchester Royal Infirmary which funds medical research into kidney disease, transplantation and dialysis, supports the education of renal staff both nurses & doctors, maintains a research library and purposes direct patient amenities both medical and other equipment which is not normally funded by the NHS. The charity receives around £70k per year in donations and income.

2. I would like to submit my comments regarding the Small Charitable Donations Bill which introduced the Gift Aid Small Donations Scheme announced at Budget 2011 which is currently at Public Reading Stage. The purpose of the scheme is to enable charities and Community Amateur Sports Clubs to claim a Gift Aid style payment on small cash donations up to £20 where it is often difficult to obtain a Gift Aid declaration, up to the value of £5,000 worth of donations.

3. I would like to highlight some particular concerns, whilst the Scheme is trying to encourage smaller organisations such as Kidneys for Life to make use of Gift Aid, there are some substantial problems with the scheme as it stands that are set to undermine the target of benefiting 100,000 organisations and in particular it may not benefit those organisations who need the support most.

4. Reduce the conditions - The eligibility conditions are overly complex and controls seem disproportionate to the amount of money that might be claimed by charities, which is a maximum of £1,250 at current rates. In particular, the requirement that charities must have been claiming Gift Aid for three years previously before they can benefit from the scheme is likely to be a massive barrier to participation, we do claim gift aid but for newer organisations it may take some while for this to be administered correctly and then a wait of three years would be discouraging. The current conditions mean that those who are set to benefit most from the scheme are charities who already receive Gift Aid, including larger charities.

5. Remove match funding requirements - The total amount a charity is able to claim through the proposed Gift Aid Small Donations scheme is currently matched to twice the amount of Gift Aid that they have claimed on donations in the current tax year. However, a small charity which relies upon grants from Trusts and Foundations alongside their public collection donations, and who therefore receive no income upon which they can claim Gift Aid, would receive no benefit from the scheme under this condition. Charities should be able to claim for all small donations that they receive up to the £5,000 limit and should not have conditions potentially linked to another income stream. It seems to be an unnecessary requirement for such a small amount.

6. Reduce complexity - The scheme is currently overly complex – more complex than basic Gift Aid – and introduces new concepts and a different set of eligibility criteria. In order to encourage small organisations that do not have past experience of the Gift Aid system to participate, the complexity of the scheme should be minimised, we could be encouraging not discouraging participation.

7. Include non-cash donations - Non-cash donations have been excluded from this scheme. There is so many ways in which donations can be taken in this technological age, with I am sure many more ways to come that this Bill is outdated before it comes into force. Limiting the scheme to cash may exclude charities that are actively fundraising using a wider variety of methods, which does not seem to be in the spirit of the policy intentions.

August 2012

Prepared 16th October 2012