Sector bodies have expressed disappointment that the Government’s Gift Aid Forum is to close and will be replaced by a Customer Forum which will look at wider issues, including VAT and Payroll Giving.

Stephen Bubb, CEO of ACEVO said: “Let's be honest and say we are disappointed. There are some good things in the proposals for gift aid reform which we support . We will help make it happen. But clearly the sector was hoping for more.

“The government has trumpeted the big society, the need to increase donations and reduce charities' dependence on state funding. At the same time we face a VAT rise, loss of transitional relief, signs of falling donations and major spending cuts, this is a frankly disappointing and unambitious outcome.

“It doesn’t take a Treasury economist to work out that standardisation and more toolkits will do little to compensate the sector for the loss of £100 million in transitional relief and 140 million due to the rise in VAT, plus swingeing spending cuts."

Bubb added: “But I do very much welcome the silver lining in Justine Greening’s commitment to leaving ‘no stone unturned’ in looking at other ways to support the sector through the tax system. We look forward to engaging with HMT on that, and hope the result will be substantive action of a kind that sadly the Gift Aid forum has not led to.

“There are lessons for our sector here too, and those of us involved will need to reflect on what I think we should all accept has been a collective failure to achieve more for the sector at a time of need.”

Amanda McLean, chief executive of the Institute of Fundraising, commented:
"It is a shame that the Gift Aid forum was unable to fulfil its original terms of reference in improving the use of Gift Aid and that the Forum was unable to gain unanimous consent to a single reform strategy for Gift Aid.

"It is also regrettable that the Government was unable to agree to any extension of Transitional Relief. However, the Institute welcomes the fact that the Government has committed itself to working with the sector to help those most in need and leave no stone unturned in looking at other ways to support the sector through the tax system.

“The Institute looks forward to working with Government to extend the support of its tax-effective giving initiative to donors as well as voluntary organisations in the future."

The IOF though noted that whilst some may be disappointed that the Forum has failed to gain unanimous consent to a single reform strategy for Gift Aid, it is clear that what works for many charities as a means of redistributing higher rate tax relief directly to the cause is seen by others as removing a huge incentive for substantial donors to give more.

The IOF said what is "encouraging" is that the Government has committed itself to looking at other ways to support the sector through the tax system.

This includes the introduction of further promotions to encourage both donors and charities to adopt and use Gift Aid, and other tax reliefs, to their full potential.

The Institute’s tax-effective giving initiative has developed Gift Aid guidance, toolkits and support.

These are all resources recommended by the Forum during its final meeting, held at HM Treasury on November 30.

The obvious next step is to extend these services beyond the current small charity remit to the wider sector and a range of donors.

The first step in using new technologies to support tax-effective fundraising, as recommended by the Economic Secretary to HM Treasury, Justine Greening, is through the Institute’s iPhone application.

This has been developed to help donors and fundraisers calculate the benefits of giving to charity through Gift Aid, Payroll Giving, share giving and legacies.

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