HM Treasury publishes outcome of Gift Aid forum

Justine Greening MP, Economic Secretary to the Treasury, has now published the Coalition Government’s response to the Fanning Report which was produced following the deliberations of the Gift Aid Forum:

 >> View the full response here <<

The Forum was set up with the remit of considering how structural and process improvements to Gift Aid may increase giving to charity. Kevin Russell, Stewardship’s Technical Director, who sat on the Forum said:

“The Forum debated a wide variety of issues and, with such a diverse sector, it was never going to be possible to satisfy everyone’s interests. However, both HMRC and Government are now much better informed as to where improvements can be made to ensure the continued success of Gift Aid in the 21st Century. There is a real openness to working together to see charities succeed in what is a very difficult economic climate.”

The Government have indicated that they wish to take forward the following recommendations:

• Recognition that Gift Aid is a success. As part of this, the Government will look, with the sector, to ways to raise awareness of Gift Aid, particularly among donors and to improve the knowledge and capability of charities. For example, by tax professionals donating skills and time to help charities benefit from Gift Aid.
• HMRC to move quickly on recommendations where Guidance can be improved or clarified. This to include oral declarations, split payments and sponsored events.
• Recognising the potential benefits for both HMRC and for charities, HMRC are to consider the viability of offering online filing of Gift Aid claims.
• Whilst not able to fund a Gift Aid Declarations database, the Government are keen to encourage the sector on such an initiative, including ensuring that any development meets legislative and audit requirements.
• HMRC will launch new ‘intelligent’ gift aid forms for charities in the New Year. These are expected to comprise the R68i claim form, the form ChA1 enabling charities to register with HMRC for the first time and form ChV1 which enables charities to advise HMRC of important changes in personnel.
• HMRC to examine proposals for higher rate taxpayers to be able to redirect their gift aid tax relief to charities.

The Minister confirmed that Transitional Relief will not be extended beyond April 2011. Instead, the £100m Transition Fund announced as part of the Comprehensive Spending Review will provide more targeted support to the charities that need it most.

Proposals that the Government will not be taking forward:

• Application of gift aid to money equivalents, such as donated goods and expenses.
• Bringing payroll giving within Gift Aid.
• Permitting couples to claim Gift Aid, when only one of them donates on behalf of the couple.

A Charity Tax Forum will now be established, with wider membership, to consider charity tax issues, covering not just Gift Aid, but other matters including VAT. The new Forum will play a role in progressing recommendations to be taken forward by the Government.

£100m Transition Fund details announced

Minister for Civil Society, Nick Hurd, announced on 30 November 2010 that the £100million Transition Fund to support charities, voluntary groups and social enterprises affected by public spending reductions was now open for applications.

The fund is available to organisations with a turnover of between £50,000 and £10million, which have derived much of their funding from state sources.

It will provide grants of between £12,500 and £500,000 to enable organisations to make the changes they need to become sustainable in the longer-term.

The Transition Fund is managed by the Big Fund, the non-lottery funding arm of the Big Lottery Fund.

Applications can be made by visiting www.biglotteryfund.org.uk/transitionfund or calling 0330 303 0110.

The application process will close on 21 January 2011.

The Spending Review: Issues for Churches & Charities

by Kevin Russell

I have identified a number of issues and opportunities for the church and charity sector. There is a lot of detail still to come, but here is my analysis of today's announcements.

Public Sector Reform

The way services are delivered will be reformed by moving provision away from central government. Underlying this is the belief that: 

• changes needed to tackle the UK’s social and economic challenges are too numerous and  complex to be solved by a one size fits all approach from central government
• new and innovative ideas are required to address these challenges. These ideas are most likely to come from service users, community groups and employees
• central government micro-management can stifle the innovation needed to instigate real change

To maintain the momentum for reform, and consult further with public sector staff, citizens and communities on how to deliver better services, the Government will publish a reform White Paper early in the New Year. This will set out further detail on the policies announced above.


Opportunities for churches and charities

The Government believes that it should continue to fund important services. But it does not have to be the default provider. This stifles competition and innovation and crowds out civil society. The reforms create new opportunities for non-state providers, including churches. In line with this, the Spending Review announced: 

• that the Government will pay and tender for more services, on the basis of results. The use of simple tariffs and more innovative payment mechanisms will be explored in new areas including community health services, processing services, prisons and probation and children’s centres. This complements measures already announced in relation to welfare to work, mental health and offender rehabilitation services
• the Government will look at setting proportions of appropriate services across the public sector that should be delivered by independent providers, such as the voluntary and community sectors and social and private enterprises. This approach will be explored in adult social care, early years, community health services, pathology services, youth services, court and tribunal services, and early interventions for the neediest families

In addition, the Government are committed to:

• giving communities due notice and the right to buy or run public assets and services that might otherwise close or face significant reductions;
• giving parents, teachers or community groups the right to bid to start new schools

Funding

The Government have stated that they will assist new providers by improving access to the resources they need:

• the Government will direct around £470 million over the Spending Review period to support capacity building in the voluntary and community sector, including an endowment fund to assist local voluntary and community organisations. As part of this:
  
  
  • the Government will provide funds to pilot the National Citizen Service. The aim of the NCS is to encourage young people to become engaged and involved in social action within their communities.
  • establish a Transition Fund of £100 million to provide support to voluntary sector organisations delivering frontline services that stand to be affected in the short term by reductions in spending, and are able to demonstrate that the financial impact will affect their ability to deliver services. The fund will be provided for a transition period, enabling these organisations to adapt.
  • The Big Society Bank will bring in private sector funding in addition to receiving all funding available from dormant accounts;
• the Government will undertake a review of ways to increase philanthropic giving. Further details will be announced later this year.

It remains to be seen whether this funding, at an individual level, will be enough to enable cash strapped charities to deliver the services that these reforms are aimed at.

Charity Commission

The Review announced that the budget for the Charity Commission will be reduced from £29m in the current year, to £26m next year and down to £21m by 2014-15. The incoming Chief Executive of the Commission has already speculated on how these cuts could lead to the withdrawal of advice to charities (for which see the previous Legal & Financial bulletin).

Important Conference: Aiming 4 Excellence

Three years ago I attended the best conference ever. It was for leaders and senior executives of Christian organisations and it is being held again at the end of November.

Aiming 4 Excellence is a three day conference to help both current and aspiring leaders to engage with what it means to aim for excellence and follow best practice. It is designed for Chairs, Trustees, Chief Executives, Finanace Directors, HR Directors and Senior Executives of Christian charities.

Speakers include Dame Suzi Leather, Rosemary Conley, Sir Peter Vardy and Rev Ian Coffee among others.

See detail of specific seminars for CEOs, HR, Boards & Trustees and Finance Professionals.

It takes place from 29 Nov - 1 Dec, in Swanwick, Derbyshire and I am told there are just a small number of residential places left.

Learn more from the Aiming 4 Excellence website.

Treasury Gift Aid Forum: The Report

By Kevin Russell, Technical Director.

The Treasury’s Gift Aid Forum, on which I was Stewardship’s representative, finally reported today. Well, maybe not. The charity sector is a very diverse one, which is one of its great strengths. But is also means Forum members both agreed and disagreed on a wide range of issues from minor administrative reforms through to major proposals such as calling for the extension of Gift Aid transitional relief, due to end next April, and the introduction of a ‘composite rate’ of relief in place of the current basic rate and higher rate taxpayer reliefs. Neither made it through to the final report for sound, but technical or political, reasons.

In a way, it was inevitable that such a diverse sector would not reach widespread agreement on the content or priorities for such a report. So it was a relief in a way, when late in the process, the Justine Greening, the Treasury Minister, asked Peter Fanning, the Chief Executive of the Chartered Institute of Tax to prepare and present an independent Report on the proceedings of the Forum. He sent his report to the Minister today.

But what were sector representatives able to agree on? Well quite a lot. First off, we are anxious to make it clear that Gift Aid is a valuable relief and the work on reform should not be taken as a sign that it is ‘broken’. It isn’t. But there are ways that it can be improved such as facilitating electronic recording of Declarations, being able to file Gift Aid claims online, and more mundane things like having greater clarity over how Gift Aid applies to donations from couples when only one member of the couple is a taxpayer. The points that we were able to unite around are set out in a three page summary  signed by Stewardship and a coalition of charity partners: NCVO, Charities Tax Group, CAF, IOF, Arts and Business and the Small Charities Coalition.

Do you have thoughts on how take up of Gift Aid can be improved? What do you find most difficult or irksome? Add your comments below.

Off to a flying start: our online giving facility

Over £250,000 given online in first 12 weeks 

On 1 July, we started a low key rollout of the new online giving facility for a small number of givers with Stewardship Accounts. We didn't know quite what to expect to be honest. To say they have enthusiastically embraced it is an understatement. We have been thrilled to see the rapid take up. The average donation request made so far is over £250, more than double the figure given on average by Stewardship's community of givers. Over a quarter of a million pounds of donation requests had been made online by early October.

The early success has caused us to accelerate login invitations to the rest of our givers - we have over 34,000 in total. We have also opened the door to new account opening online.

This shows that people clearly trust us with their giving. No 'dipping the toe in the water', no tentative 'wait and see', but straight in with large and generous donations. In fact the average gifts being credited into accounts (as opposed to donation requests out of accounts) is a whopping £500. 

Givers can now credit their account online, by debit/credit cards or using their Direct Debit facility. They can also manage regular giving and make one-off donation requests in a a variety of ways. It's all recorded in a suite of excellent reports. Not got an account? You can open one here.

You can read the press release here.

Join the Conspiracy of Freedom

Are you interested in a simpler, more sustainable, more generous life? If so, the Conspiracy of Freedom www.conspiracyoffreedom.org is about making that happen.

Many of us may feel that our lives are little different to the dominant pattern of consumerism we see all around us. It is hard to make outrageously generous choices. The sustainable option is not always clear. Simplicity, we find out, has a habit of being surprisingly complicated!

This is where the conspiracy comes in. Based on the experience of the Breathe Network (a Christian network for simpler living), the Conspiracy of Freedom aims to get us talking with others about the changes we could make. Supported by Stewardship, Tearfund and A Rocha, we have produced four short videos which can spark off discussion and lifestyle change. Time and again, this kind of group discussion has been seen to make a real difference in areas where we are often swept along with the flow. Our hope now is that Christians around the country will watch and discuss these videos with friends.

Sam Stephens, co-founder of community sharing initiative Streetbank, describes one of the videos as “a powerful film that makes its point elegantly, lightly and joyfully”. Each video lasts 3-5 minutes and ends with questions to provoke discussion. They cover the topics of generosity, community, good childhood and sustainable living.

So how can you get involved? Check out the videos at http://www.conspiracyoffreedom.org/ or order a DVD from editor@breathenetwork.org, and think about how you might discuss one or more of them with friends. Some churches are playing them in services. Friends are forwarding them through Facebook or by email. Small groups are discussing them, and considering how they can support each other in living differently. How you get involved is up to you, but the invitation is there to get the conversation rolling and join the conspiracy.  

Reflections on the latest Christian giving survey

Obtaining accurate figures on the level of Christian giving in the UK is difficult, requiring the piecing together of  different sources.

The most recent addition, and very welcome, is the report "Why Christians Give", produced by McConkey Johnston, authored by Redina Kolaneci and based on  a survey of members of the Evangelical Alliance. The report is clear and deliberately expands on the data to provide reflections and challenges for church leaders and charity fundraisers. A recommended read.

There is much to encourage us. The evangelicals surveyed gave 11.5% of their household income with 6.5% going to their local church and the reminder to other charities. We read of the rise of legacy giving, the commitment to regular giving during the recession and the importance that faith continues to play in giving decisions.

It is concerning that there was lack of evidence of real stewardship teaching in the churches of those interviewed and I was surprised that when asked where they would give away a gift of £100, nearly 40% said they would share it between charities -  which seems a bit stingy to me.

The other points of concern in the report almost certainly relate to the fact that the respondents are part of the ageing  population of evangelicals. Only 3% were under the age of 35 with 66% over the age of 55. This is a factor of the database  used to sample the survey respondents - the Evangelical Alliance database of individual members. We should therefore be cautious about extrapolating the findings to all evangelcials. 80% of those in the survey didn't have any dependents at home and 34% had household incomes of £40,000 or more which tells us something of the sort of people providing the answers.

That said, the giving habits of this group are excellent, reflecting real generosity, loyalty and care for the work of God locally and internationally. As the author astutely points out, engaging those in their 20's and 30's is crucial because regular giving from the mid 30's usually results in a long term commitment. However this age group expect different and higher standards of communication. And I wonder to what extent the giving habits of their parents, the kind of people in this survey, will pass from one generation to the next.

The report confirmed that evangelical givers spend plenty of time online, yet apparently do little of their giving online. I suppose this is because much of their giving is regular and planned in nature, not something that can be managed easily online - unless you have a Stewardship Account!

The arrival of Stewardship's online giving service now enables these kinds of donors to enjoy setting up regular giving,  amending it when needed, and the making of one-off donations, whether by credit/debit card or from their giving balance.

Stewardship's own figures of Christian giving affirm the commitment of evangelicals to regular planned giving which continues to hold up during difficult and uncertain economic times.

Anthony McKernan

Not your average city traders

Many would argue that 1970’s London was a city in trouble. For Dr John and Dorothy Davies – after 10 years service in Nepal and North India – it was the perfect urban mission opportunity. If only they could afford to live there.

When they returned from Nepal in 1970 they had no capital, no proof of income and absolutely no way to get started in London as they hoped. Fast forward 40 years and John and Dorothy Davies are now, as retired Senior Citizens, finally living out this long held vision with transformational results. We catch a few minutes on the phone to talk about their story, but time is scarce as Dorothy is busy preparing a curry lunch to bid farewell to some friends about to return for their annual stint in Nepal.

The energy, passion and drive of this couple is quite remarkable and there is not much sign of slowing down. For proof just look at how and to whom they give: “Our priorities at present,” says Dorothy “are overseas mission, urban mission, resourcing the church, resourcing those working for the church, resourcing London churches by helping to house their key workers, and personal support for individual Christians dependent on regular donations.”

Where possible they make full use of their Stewardship account to manage this giving, “At our stage in life it relieves us of the hassle and burden of making gifts, so we can be free to use our time in other ways.” Back in 1970, and settling at the seaside (Clacton-on-Sea, followed by Frinton-on-Sea, to be precise) seems like an unusual move for aspiring urban missionaries. But for the Davies it was a crucial stepping stone and, in hindsight, the laying of foundations for something much bigger than they could have imagined.

“We moved to Frinton-On-Sea where I was blessed to be able to establish a Christian medical practice.” John continues: “This provided us with a serious income to direct to focused giving – much of it related to London where our hearts were still set.”

On John’s final retirement from medicine in 2002 they sold their home and headed to Bethnal Green. The irony of retiring from Frinton on Sea to London is not lost on the couple, but as Dorothy shares, this is where their giving gets integrated with living. As Dorothy shares, “if you want to do more than just give, if you want to be envisioned then it is good to be – if at all possible – among the people you have a heart to support”. That’s exactly where God led them.

And that is exactly what the Davies are now doing. Remembering their heartache of not having the resources to minister to the city of London in 1970, the couple with five others of like mind set up ACHAL, the Affordable Christian Housing Association Limited. That was in 1988 so their legacy over the years would be the provision of affordable accommodation for Christian workers in London who would otherwise “be squeezed out of London because prices were beyond them.” Over 22 years others have come on board with finance and management
and God has enabled many to stay on to serve in London by having accommodation provided. 2010 has become another significant milestone as a Chief Executive Officer has just been appointed for ACHAL.

With our time nearly through, it is John who has the last word: “Our account with Stewardship has meant we can be focused to give where it counts. Living in London helps us pray and support those committed to serve God here. Our latest thrill is the football club for young homeless men; some with addictions helped practically, others have come to faith. And seeing five young couples being married and committed to stay in London; our heart is with the next generation! It is a wonderful, vibrant life for which we praise God!”

For more information on ACHAL visit www.achal.org.uk

Giving Lessons

Stewardship’s new teaching material – ‘Seasons of Giving’ – helps get to grips with one of the subjects we often struggle to talk about. Steve Pierce, Stewardship Head of Content, reports.

The problem with biblical teaching on money is that there is so much biblical teaching on money! Are we to bring our first fruits and rejoice in all the good things (Deuteronomy 26:11) or should we sell our possessions and give to the poor (Luke 12:33)?

The shared insight of these verses is generosity: giving that honours the Giver and serves the poor. The foolishness of the rich farmer in Jesus’ well known parable (Luke 12:13-21) is that both the vertical and the horizontal obligations of wealth are absent.

“True giving is an act of self-liberation. It becomes one of the major achievements of our life.”

Seasons of giving week 2:Study questions on the rich fool

1.    What prompted Jesus to tell the parable of the rich fool? Can you think of ways in which money can get in the way of relationships and why this might happen?

2.    The wealthy man tears down perfectly good barns in order to build bigger ones. How and why do we do this with our possessions?

3.    Count up how many times the farmer uses the words ‘I’ and ‘my’. What does it suggest about his attitude to his wealth and possessions and his relationship with God?

4.    We can’t divorce our thinking about giving from the rest of our money. What do you think the parable of the rich fool teaches us about:

i)    Planning for the future?
ii)   Enjoying good things in life?
iii)  The rights and wrongs of making money?

5.    How might the local community suffer from the actions of the rich fool? (Proverbs 11:26 might suggest a clue.) In what ways can wealth either blind us or open our eyes to our obligations to people living in poverty?

seasons of giving

The new Stewardship Bible study resource, Seasons Of Giving, is written in the belief that generous giving is the key that unlocks so much of our relationship with money. Blending Bible study with illustrations of a remarkable modern parable of generosity ‘Seasons’ helps us explore how giving can transform our actions and attitudes around money:

• Giving helps set us free from the love of money
• Giving recognises God’s ownership of all we have
• Giving is the hallmark of authentic discipleship
• Giving is part of our stewardship responsibility before God

to test our love

‘True giving is an act of self-liberation. It becomes one of the major achievements of our life.’ So says Henry Drucker and he is right. Giving is a key part of our celebration of all God has entrusted to us, building resistance to selfish materialism. Giving gently tests the authenticity of our love (2 Corinthians 8:8). It shapes our character before God and the world.

Seasons Of Giving is a fresh and creative fourweek bible study which will get small groups in the church talking and thinking about their giving and their discipleship around money. The resource is available as a free download at www.stewardship.org.uk/money. Why not use it as a study session in your church before the summer break?

Download Seasons of Giving free here.