Can someone explain why the philanthropists are complaining?

[claig]

I don't get it. Why should the tax payer subsidy the billionaire philanthropists by making contributions to charities tax exempt? If we donate to Comic Relief, it comes out of taxed income doesn't it? I don't understand it and may have got it wrong. Can someone explain?

If we give money to a beggar, do we only give it if we get tax relief? What kind of philanthropy is that?

I thought it was the charities that were complaining

If I give the charity £60 of my post tax income they get the £80 and can claim the tax back from the exchequer so get £100 in total.

I can't afford to increase the £80 to £100 as my take home pay is the same so the charity is losing out on £20

The way the rules work this will impact larger donations. Someone who earns more doesn't necessarily have the disposable income to make up the short fall

It is just a way for Government to encourage private giving. It really helps charities with their funding.

And you can use gift aid if you donate to Comic Relief

Thanks, Everybody. I didn't realise the charities claim it back. But should the government use our tax payer money to help charities rather than spend the tax money on government expenditure such as the armed forces or health service?

From the news I see, I keep seeing philanthropists saying that they may not be able to keep contributing if the Tories implement these changes. Why? Is contributing something not better than contributing nothing?

I would say that in a lot of cases this reduces the need for government contributions to charities. it also enables the public to choose where resources are focussed and should hopefully encourage people to give a bit more!

I think people are saying that they will donate less ie they won't pick up the short fall.

I kind of agree with what the government are trying to do on capping reliefs but I think they are using a sledgehammer to crack a nut.

They could circumvent a lot of avoidance by restricting it to cash donations and excluding in kind. Also, by reviewing charities that are eligible to ensure no connection between donor and donee

I don't understand why they can't contribute to government coffers by not expecting tax exemptions, so that the government can spend that revenue on essential services. We are not allowed to decide where out tax money is spent, it seems to me that the philanthropists are in some way choosing where what they would have paid in tax is spent i.e. some sort of hypothecation.

As the government are implementing their cuts, it is charities who are trying to plug the gap so it is a bad time to reduce their income whichever way you work it out.

I see what you mean.

The problem is that the government are targeting the wrong people. In order to get this relief you have to actually have paid tax. You are not catching people who aren't paying it in the first place, eg people who are non

We can all use this relief whatever your tax paying amount! It isn't just the rich who can choose to redirect their tax

Not exactly sleepy, the charity can claim 20% basic tax paid by the tax paying donor under giftaid, but if the donor is a higher rate tax payer then they can also claim back tax relief on the difference in 20% basic rate and higher rate of 40 or 50%. Donations under gift aid are treated as having basic tax at 20% paid for the purpose of calculations/reliefs. So a £100 donation is worth £125.

Ie if a 40% taxpayer gives £100 to charity, the charity can claim 20% basic tax already paid by donor (£25) and the donor can also claim £25 (40%-20%). This is what the government is talking about stopping.

On the news we have heard that some philanthropists are paying no tax by giving to charities. Are these charities accountable to the public?

There's a good article on the bbc news website giving the arguments

I don't know how a charity qualifies to be able to get gift aid but perhaps it would be better to tighten up those rules.

I know bill gates isn't a British taxpayer but (fantasy land assuming he was) he donates huge amounts to try to find a vaccine or eliminate malaria. There is no way equivalent resources could be put towards that in another way so I wouldn't begrudge him getting the tax relief!

But who effectively pays that tax relief? Is it the public and if so has anyone asked the public if they want their money spent on that rather than cancer treatment? If a multi billionaire decided to spend 100 billion on a charity, would the government have to give the charity 25% or 40% of that amount and if so is that right if the public has no say?

Well the tax relief is tax receipts foregone by the Treasury so ultimately I guess we all pay in a sense, but the donor would view it as preferring to give that money (the gift aid 20%) to the charity of his/her choice rather than the state to use as it sees fit, with the added bonus of also reducing their tax bill by a similar amount if a higher rate taxpayer.

The government allows this to happen, at least at present, and as "the public" has given then the mandate to make such decisions then in that sense we have had a say?

I agree with sleepyeyes in that I am happy to let donors get some of their tax back for donations to amazing charities. The problem is that lots of the "charities" benefitting from the donations don't seem to be passing much of them on to the actual good causes - so what really seems to need attention is the registered charities themselves, not the tax allowances.

By the way, AFAIK I don't think the government is talking about stopping giftaid in relation to the charity claiming the basic tax, only in terms of stopping the higher rate tax relief for the donors.

Claig, you are referring to 'Philathropists' as if they were not members of the public.

good point ClaireAll, but how many people could be classed as 'philanthropists'?

Why do their small numbers make them less than human?

Nobody is saying they come from Mars, of course they are human.

RSA Animate - First as Tragedy, Then as Farce, this is worth a look.

Slavoj Zizek sets out to explain that charity is not an added extra but is in fact central to the global economy.

"Philanthropists" are these people who give a lot or people like you and me who give a little?

I do think Dave and co and have created a strange dichotomy now. I personally don't think charities will suffer as long as they are prepared to reinvent themselves not just in terms of taking on government contracts but also by becoming indebted to private investors through social enterprise funds. Anybody else notice how many corporations are changing their core business to social enterprise?

Interesting video, minimathsmouse.
He makes some good points about hypocrisy and the cloaking of consumerism in help for the environment and charity etc., which I think is an attempt to counteract any criticism of capitalism. But I feel that he is a doom monger. He seems to believe that we are on the road to ecological ruin etc., which is of course what we are constantly told by the system with its message of catastrophic climate change and having gone past the so-called "tipping point". He seems to see the only solution as one or reorganizing society completely in order to solve the problem of capitalism. But this is the type of doom mongering that elites like, because you can guarantee that the changes made will be made by the elite and not the people. He seems to want things to get worse before they get better, but that is what elites want, because they don't intend to make things better.

Ordinary people do give to charity and do help now, they don't plan a complete reorganisation of the system, because they know that that is impossible for them to do. So they give now in order to alleviate suffering now, rather than waiting for the tomorrow that the revolutionary doom monger promises and which is likely never to come.

He makes some good points about hypocrisy and the cloaking of consumerism absolutely, I think he makes the point that we pay whether we like it or not, it's factored in to the costs. Where we have choice we are bombarded with the suffering so that we can only realistically make "good choices"

Of course the answer is to have a fair and just society where there is no need for charity. This won't happen because some people are getting very rich through the system (the guy who set up Oxfam is loaded) and there is now a great new way to make money through social enterprise.

As for climate change, the Indonesians live on 7p a day now, poor black american kids can't go to school because they have no shoes now and 1in4 kids in the UK live in poverty now, the climate, it's kind of a non issue, isn't it.

Yes, I don't fully understand how all these philanthropists and social enterprise funds work, but I think that Osborne has a point with his changes when we are told that some philanthropists are paying zero tax.

Zizek makes great points which I think show how we are conned by some of the "ethical" capitalists etc. with their ecological concern and charitable contributions. But I have just googled him and I am no fan of his because it does look like he is a doom monger prophet with an apocalytic vision and of course he also therefore believes in the apocalyptic "catastrophic climate change". I wouldn't be surprised if he is of the "we have only 50 days left to save the planet" type thinking. I think he speaks of our apocalyptic future because he essentially blames it on capitalism and the more apocalyptic he paints it and the less days left to save the planet we have, the more the chance of a fundamental, systemic reorganisation of society and capitalism becomes real.

I don't believe doom mongers and climate catastrophe cowboys because I think they want to pull the wool over the people's eyes in order to restructure society for teh benefit of the elite and not the people.

Here is a review of one of his books, with an apocalyptic type title beloved of certain Christian doom mongers - "Living in the End Times".

www.guardian.co.uk/books/2010/jun/26/slavoj-zizek-living-end-times

Some Christian doom mongers say repent and pray to save your soul and some green doom mongers say recycle and pay your carbon tax to save the planet.

They both predict catastrophe and they both imply that catastrophe is the wages of sin, be it for not following their prescriptions or not recycling your bin.

And some newspapers and reviewers tell us that Zizek is a clever man for telling us how the sh*t will hit the fan if we don't consign capitalism to the can. But the public ignore the prophets of doom and gloom and don't give these scare stories any house room; they've heard all about the "tipping point" from people who write in papers and rule the joint; they are well aware of the end time scare and know that in a time of deceit, the truth is rare.

www.bbc.co.uk/programmes/b006mk25/broadcasts/2012/04

Newsnight, last night, had an interview with Dame Shirley, a philanthropist and a Tory MP - Treasury spokesman I think. Both sides argued their case - for the life of me, I couldn't help but have some sneaking preference for the MP's position.

Claig, Is it the doom sayers who have an agenda or is it capitalist forces that take up the opportunity to find ways of making money from social and environmental ills?

I will look into Zizek, I don't know much about him but on the face of it he seems fairly savvy in having worked out how the corporate class make money from charity.