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Could lifetime legacies fit the bill if Gift Aid reform fails to satisfy?

In the very near future, a group of third sector bodies will put forward a series of recommendations to the Treasury for Gift Aid reform.

Sadly, these look likely to be relatively modest, compared with what sector figures once hoped to achieve. And as a result, some sector figures are looking around for other models they can use to improve tax reliefs for giving, and it looks like lifetime legacies might fit the bill.

The lifetime legacy is a type of giving that has existed for several decades in the US. A donor decides he wants to leave something to charity, but is worried about income when still alive. So he bequeaths the capital, but keeps some rights to the income. If he gives cash, he receives income from it, typically 5 per cent a year. If he gives property, then he can carry on living there. In either case, there’s no tax liability to the donor or the charity.

It’s most commonly given through something known as a charitable remainder trust, and it’s now simplified to the extent that you can download a document, fill it out, and send it off.

Donors surveyed here seem keen on it. And charities here like it because it offers certainty of income, and an asset they can borrow against. A new campaign has attracted a wide range of support among legal firms and umbrella bodies. And there’s likely to be little cost to the exchequer.

However it has proved impossible to introduce the necessary legislation here – essentially, campaigners say, because of a “can’t-do” attitude on the part of HMRC.

It sounds like a familiar tale. This idea would take some working up from civil servants, some legal expertise, and some time and effort from civil servants. It presents a couple of potential problems, including the potential for abuse, which, the US proves, could successfully be ironed out. All of this is doable. But little is happening.

It’s essentially a question of political will. If any of the big guns in the cabinet takes a liking to the idea, it will go forward. Otherwise, no way José.

The sector is already mustering its considerable powers of lobbying to make it happen. It sounds a concept worth backing.

  • Pamela Ball

    As usual spot on Richard. ASSISST got by most of us and that begs the question who did know about it and therefore who got in under those farcial timelines ???

  • James Renton

    Richard
    You are right about the farce this has become, Both OCS and Big bleat endlessly about the lack of resources yet have have found money to fund a massive contract like ASSIST plus the money blobbed out to Your Square Mile and they were in negociations with Business in the Community to fund their Business Connectors scheme. It is quite clear that the market driven agenda will create new players in the market if that is their intention why not be honest and state it, if their vision is fee based services then state it and if they could not care less about “voice” then state.

  • Rob Jackson

    This is a really good assessment of the frustrating array of seemingly unlinked initiatives around infrastructure. Thank you Richard.

    Whenever I read tales of the woes of infrastructure in the current environment I cannot help but reflect on the missed opportunities of ChangeUp. I spent six years advocating for change, development, modernisation and rationalisation. As a result I spent just as long being told many reasons why change wasn’t going to happen. Having failed to change on their own terms, many of those people and organisations now face change directed by others who have little or no understanding of the reality of sector infrastructure, hence this bewildering array of initiatives, programmes and consultations.

    I agree that infrastructure and those they serve need to be clear on what they want and their role in giving the sector a voice. I just despair that so many spent so long ignoring calls for change that they find themselves ill-equipped and unprepared to face the future effectively.

  • stolen stolen

    In looking at the culture and performance of the infrastructure sector under the previous government, perhaps the present government has justifiable reasons for some of the things it does and the manner of doing it.

    • Karl Wilding

      That may well be, but the culture and performance of the infrastructure may also have reflected the design and delivery of funding programmes that sought to deliver outcomes (never mind activities) in time periods that were shaped by accounting rules rather than common sense.

      Mistakes were made, opportunities were missed – by all of us – but there was also a lot of good work done.

    • Yes I’ve just finished reading the National Audit Office 2009 Report on ‘Building the Capacity of the Third Sector’ and it makes sobering reading, especially with regard to Capacity Builders. Money wasted, no real strategy, failure to measure outcomes or achieve sustainability.

  • Karl Wilding

    Good assessment Richard. I think many of us can look back – but also look forward – and wonder what would have happened and what will happen if the role of infrastructure had been thought through a little more holistically and, dare I say, trusted.

    Your point about voice and representation is particularly important for me. This is what ‘infrastructure’ – which I should say in passing I find an unhelpful term – is all about. But if we are there to represent, or more accurately convene and amplify, is it right that we are just looking at external funders in government to set the agenda? They might reasonably say this aspect of our work is nothing to do with them.

    I wonder if instead the dialogue we should be having about this function, how it is funded, and how it is structured (national/local; horizontal/vertical) is one we should be having with our members? And maybe that’s a discussion we should be having collectively rather than individually.

    Maybe its a discussion we don’t want to have because some of the answers might be difficult for us – and I include myself in that. Is it about time we again all picked up a copy of the Wolfenden Committee’s report?
    Cheers
    Karl

  • Karl Wilding

    Good assessment Richard. I think many of us can look back – but also look forward – and wonder what would have happened and what will happen if the role of infrastructure had been thought through a little more holistically and, dare I say, trusted.

    Your point about voice and representation is particularly important for me. This is what ‘infrastructure’ – which I should say in passing I find an unhelpful term – is all about. But if we are there to represent, or more accurately convene and amplify, is it right that we are just looking at external funders in government to set the agenda? They might reasonably say this aspect of our work is nothing to do with them.

    I wonder if instead the dialogue we should be having about this function, how it is funded, and how it is structured (national/local; horizontal/vertical) is one we should be having with our members? And maybe that’s a discussion we should be having collectively rather than individually.

    Maybe its a discussion we don’t want to have because some of the answers might be difficult for us – and I include myself in that. Is it about time we again all picked up a copy of the Wolfenden Committee’s report?
    Cheers
    Karl

  • Mike Wild

    Seems to me that all Governments’ atitude to VCS infrastructure (and I agree with Karl, I don’t like the term either) has always been a love/hate cycle. What’s unusual about the present situation is that they’re doing both simultaneously – or a very good impression of it.

    If the current survey about using online tools is anything to go by, not only is the voice aspect missing from the thinking but so is any concept of true community development at a local level. That’s the most puzzling aspect for me – with Big Society and the localism agenda one would have thought that key partners would be those organisations ideally situated to bring local people together, stimulate local activity, etc. and yet we get these curiously mixed messages as Richard rightly says.

  • stolen stolen

    Dear Karl

    Technical mistakes were made but that was not the problem per se.

    Inflated egos and greed in the sector magnified those mistakes and did not allow for correction or course change.

    Are we still in the same culture by the significant players in the sector is the concern.

    Stolen