I wonder if it’s time for the charity sector to change tack with its lobbying on the Gift Aid Small Donations Scheme.
The GASDS, and the Small Charitable Donations Bill that will bring it into existence, have been criticised because of the bureaucracy involved, particularly the need for a good Gift Aid record before you can take part, and the need to collect at least £1 in Gift Aid for every £2 raised under GASDS.
But the scheme actually has another, perhaps more serious flaw: it’s not index-linked.
This issue is the kind of detail that doesn’t sound exciting, but has the potential to mess up the whole thing.
As MPs Gareth Thomas and Bernard Jenkin pointed out during the second reading of the bill, the government has no power under current rules to increase the payout. Parliament would have to do it – something that has very little chance of happening.
So, each year the limit will remain £5,000. But the cost of living goes up. Inflation goes up. The value of a pound goes down. And in little more than a decade, the usefulness of the scheme to the sector could easily have halved.
If we assume that household incomes will rise at 2 per cent a year over inflation, and that inflation remains around 3 per cent, then it will take only 20 years or so for this scheme to be inflated away into virtual worthlessness.
So what now?
Well, charities have lobbied on reduced bureaucracy, and have already won some concessions. The current level of protections, while likely to hamper charities, do unfortunately seem reasonable. Without them, this bill would be a fraudster’s charter.
So maybe it’s time to put that on the back burner and focus on a concession where the going might be easier.
Get a guaranteed index-link into the bill, and – hopefully – a guarantee that the government will look at it again in a few years, and consider increasing the limit further if everything’s working well.