Government must act to ease 'perfect storm' hitting charity sector

Fundraising shortfall caused by pandemic could be eased if tax reliefs on donations were modified
Government must act to ease 'perfect storm' hitting charity sector

Denise Charlton, the new Chief Executive Officer of The Community Foundation for Ireland. Picture: Naoise Culhane

Changes to tax relief and other measures could help charities struggle to make up for fundraising shortfall due to the Covid-19 pandemic, according to the Community Foundation for Ireland.

The body, which has supported communities for more than two decades and which will provide €16m in grants to groups around the country this year, said many charities and voluntary groups needed a lifeline amid the "perfect storm" caused by the pandemic, with a surge in demand for services matched by falls in donations.

In its pre-Budget submission, the Community Foundation for Ireland said two measures could help: the first would be to ensure all donations intended for communities go to communities by removing the administrative burden of tax relief for donations over €5,000 from charities to donors; and a reduction in Capital Acquisitions Tax on donations from inheritances on a euro-for-euro basis.

It said the proposed change to tax relief was the only outstanding recommendation of the 2012 Forum on Philanthropy Report on Major Gift Incentive.

Denise Charlton, CEO of the Community Foundation, said: “The Covid-19 pandemic has created a perfect storm for the charity, community and voluntary sectors with hugely increased demands for services and supports coinciding with a drop in donations, gifts and funding.

Tax relief

"At present in Ireland, less than 1% of donations are greater than €5,000. Efforts to boost this have been hampered by a tax relief regime which is not delivering for either charities or their larger donors, with money intended to benefit communities instead going on taxes. The estimated loss is €50m since the current measures introduced in 2013.

"In this submission The Community Foundation for Ireland sets out practical steps which if adopted by Government would encourage and nurture philanthropy, gift giving and legacies to ensure our communities can secure larger donations which will allow for medium to long-term strategic planning for the future."

Chair of the Foundation, Mike Gaffney, said: “Older people, people with disabilities, those who struggle to make ends meet, those trapped in violent relationships and many others have borne the brunt of the isolation and loneliness caused by the restrictions needed to keep us all safe.

For them hope, support and help often comes from charities, community and voluntary groups. Meals on Wheels, newly developed virtual supports, neighbours who will make a run to the shop or pharmacies are literally lifelines.

"Yet the upsurge in demand for such supports is happening at a time when fundraising has been largely shut down or very severely reduced."

Last May a survey of more than 2,000 charities carried out by the Charities Regulator found that at least half of charities feared they may be unable to continue providing a services for more than six months because of the impact of Covid-19.

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