The White Paper on giving, released last week, contained a raft of ideas. Some good, some bad, some nothing to do with government and some which will mature in time to generate additional income.
The proposal they didn't contain was for lifetime legacies. Various parts of the sector led by CAF and the Philanthropy Review have thrown up their hands in horror and organisations such as the Institute of Fundraising have joined the chorus.
I cannot share in lamenting the non-appearance of lifetime legacies. I simply don't get what everyone else is going on about. When NCVO says that introducing lifetime legacies would be one of five things that would energise the Big Society (despite not mentioning it in their funding commission report) I am amazed.
As best as I can understand a lifetime legacy works like this. A person owns an asset (say some shares) and wants to benefit from them now but is happy to commit to give them to a charity at some time in the future. So the gift can get tax benefits today although it is not actually given for many years.
In other words, the charity gets nothing from the donor for maybe 10 or 20 years, or longer. The government hands over the tax today (say it's gift aid) because the gift is promised. If the gift reduces a capital gains tax burden then the donor may benefit and if it is eligible for gift aid then both donor and charity may benefit.
Can you spot why a deficit-driven Treasury might not like this idea? It hands over the tax years, even decades, before the donor. The opportunities for fraud are scary. The charity isn't much better off as it has an asset it can't touch. Definitely not jam today or even tomorrow but one day.
Would this bring about a revolution in giving? Would this idea deliver the Big Society? Certainly not in the lifetime of this parliament and probably only for a limited number of high-value donations.
One of the main arguments in favour of lifetime legacies appears to be that they have them in the US. If this is the best that the proponents can open with it is not much of an argument. The US has the right to bear arms, the largest armed forces in the world, a budget deficit of astronomical proportions and the death penalty. Just because they have something in the US doesn't mean we should have it here.
If we had lifetime legacies in the UK already I wouldn't be arguing for their abolition. They would join the pantheon of niche ways of giving, like share giving, payroll giving, affinity credit cards and soon cashpoints, that might add up to be the final 1% or 5% of a charity's income.
The real problem is twofold. First, the political capital the sector uses up with government, arguing for a tax change that would be at best delivering a peak of income in 20 or more years. And second the opportunity cost of putting all that energy into something that can only be a niche income stream.
What the sector needs now is the next big idea that might raise £500m or £1bn a year. The ideas that might allow charities, particularly small charities, to fill the void left by government cutbacks if not today then in 12 months' time. The ideas that might reach new audiences for giving or allow people to give more painlessly.
We have seen a number of these ideas over the last two decades: street fundraising, challenge events, £2-a-month TV ads, online event sponsorship, to name but a few. Surely the sector's collective creative energy should be put into identifying these ideas and not wasted on an idea like lifetime legacies, which is difficult to explain, difficult to implement and difficult to raise funds whose benefits lie far into the future.
Joe Saxton is founder and driver of ideas at nfpSynergy
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