Generosity and philanthropy are well-established and important parts of British society.
However, real financial challenges exist for the charity sector as local and national governments, along with other funders, respond to challenging economic conditions.
The general election may bring a new government, but whatever the makeup of the new parliament, there will inevitably be difficulty in balancing the books. Private philanthropy will continue to have an important role to play.
Much attention is often attracted by high-profile philanthropy. Recent examples include funding of the acquisi- tion of the Honresfield Library, and Edinburgh’s new Dunard Centre. These are fantastic projects, but philanthropy at all levels is essential in ensuring the continuity of many charities.
Participating and contributing to charities is a two-way street. Charities clearly benefit from the funding in order to achieve their objectives. On the other hand, families, trusts and private individuals gain real insight into a charity’s operations and can benefit from the knowledge and satisfaction that funding is being put to good use.
Many families involved in philanthropy use their endeavours to involve younger generations in stewardship and decision-making around the funds.
Donors should also be mindful of the tax attractions of giving which can maximise sums passing to charities. The Gift Aid scheme and Inheritance Tax reliefs available are significant: in 2023 they came at an estimated cost of more than £3 billion to taxpayers.
These reliefs are well established, and changes have been risky from a political perspective.
The proposals in 2012 to cap Gift Aid for higher earners didn’t make it to the statute book after pressure from the charities sector.
As we approach the election, the policy change in the char- ity sector that has attracted attention is Labour’s proposed levying of VAT on private school fees.
Philanthropic endeavours of all sizes are an important consideration when planning your estate and should not be overlooked.
No matter the changing economic environment and outcome of the forthcoming election, the benefits of philanthropy will remain, and it is a matter for all concerned to continue to support such efforts to ensure the continuing success of a vibrant UK charity sector.
Partner Content in association with Shepherd and Wedderburn LLP