Small Charitable Donations Bill

Eilidh Whiteford Excerpts

Tuesday 4th September 2012 Commons Chamber

[Dr Eilidh Whiteford (Banff and Buchan) (SNP)]

May I first declare an interest? Until relatively recently, I was a trustee and non-remunerated director of two charities and am currently a trustee of the Parliament Choir, which has charitable status.

Charities, and particularly small charities, are the backbone of our civil society. The contribution they make to our communities is immeasurable. It would be remiss of hon. Members if we did not acknowledge the people around these islands—in my constituency and those of all hon. Members—who give up their time and money for the public benefit. The Government could never replicate, reproduce or replace what they do, and it is right that they remain at the forefront of our consideration of the Bill.

These have been difficult times for charities; their capacity to fundraise in tough economic circumstances has been stretched ever tighter and greater demand has been placed on their services. Gift aid has been immeasurably and immensely valuable to many charities large and small, so it is a good innovation and a step forward that small charities can start to benefit from it too. I therefore welcome and support the principles behind the Bill—it will be a meaningful step forward for a number of charities.

Having said that, however, previous speakers have highlighted feedback from stakeholders making it clear that, as things stand, the scheme is still too complex and will not be accessible to all the charities that could legitimately benefit from it. The Economic Secretary introduced the scheme with the intention of providing opportunities for charities, but the National Council for Voluntary Organisations, the Institute of Fundraising and the Charity Finance Group have all expressed concerns about the complexity of some of the preconditions and about the difficulties that they will create for some charities.

I am sure that we all realise that getting a scheme of this nature right is tricky, and we would acknowledge that a balance needs to be struck between enabling charities to maximise the value of small cash donations, and protecting both the Treasury and charities themselves from fraud. Nevertheless, cash giving remains an important method of fundraising for the charitable giving sector. As the hon. Member for Stafford (Jeremy Lefroy) said a few moments ago, almost 47% of donations are made in cash, and, according to the NCVO and the Charities Aid Foundation, it remains very much a part of our giving sector, even though other forms of giving are coming on stream.

I am sure that I am not the only person in the Chamber with lots of experience rattling a bucket to raise cash for projects. It can be a very effective way of raising money, particularly for certain situations and kinds of appeal, but it is only fair to recognise that it is open to abuse. It is not only the Treasury that might lose out; I have seen how easy it is for people to put a logo—particularly the logo of a big charity that is a well-known household name—on a bucket, shake it and collect money that will never benefit anyone in any part of the world. There have to be protections, and reasonable steps have to be taken to prevent that from happening.

Many charities, particularly those that have professionalised over the past 20 years or so, have made a great effort to encourage people to give regularly. That is good for charities, because it means that their donations are predictable and that they know what revenues are likely to be coming in. It also helps them to communicate with their donors, makes them much more accountable to the people giving money and helps people to understand what their donations are being used for. On the whole, therefore, this move is a good thing, and I welcome the fact that, even in tough times and a recession, more and more people are signing up for direct debits and finding more long-term and sustainable ways of giving to charity. But that does not mean that there is no place for bucket rattling, and the Bill will help smaller charities that want to collect in that way from people who do not want, or are not in a position, to give a regular amount.

Although in recent years we have moved in that direction, an awful lot of charities still work entirely through volunteers—they do not function with staff but are still dependent on people who selflessly give up their spare time and weekends for fundraising activities and the bureaucratic administration on which charities—large and small—depend. Just as it is important that the laws regulating charities take a proportionate approach to governance and regulation—that important principle has underlined the charity regulation changes of recent years—it is important that we recognise the difference between large professionalised charities delivering public services and small organisations raising money for a local community project with no paid staff. It is also important that the opportunities open to charities through gift aid-related schemes demand a proportionate level of administration.

I listened carefully to the Minister’s opening remarks, and I think the Government seem to be trying to find a middle path, but as we manage risk in a proportionate way, there are still things we could be doing. The concerns of the umbrella bodies in the charity and voluntary sector should be taken on board. I encourage Ministers to keep engaging with those organisations as the process goes forward and to look at some of the detail, particularly in implementation. Charities are conscious of their reputations, especially when it comes to managing cash. In my experience charity managers desperately want to encourage regular giving not in cash, but in other ways.

I am interested in what has been said about the restrictions on gift aid. Some of them are reasonable—it is quite reasonable to have a track record with charities—but we have to recognise that there will be a detrimental impact on people raising for, say, a one-off event to install a piece of community equipment or for a community project. They will not be able to benefit from the scheme. I would be keen for Ministers to come back to us on that point and see whether there is a way round it. There are also questions about the matching provision. It could be useful for charities trying to comply with the requirements, as it would help them to build up more knowledge of who is giving them money. Charities should not be afraid of that—indeed, I would encourage them to do it—but in the meantime let us find a way forward through the detail.

I am also interested in the explosion in the number of people giving through their mobile phones in recent years or finding other ways to give—for example, through websites such as JustGiving. All are innovative ways of raising funds which have been developing rapidly as the technologies develop and people come up with innovative solutions. Again, however, smaller charities find it harder and more expensive to access such schemes. They do not come free; they come with a cost, which erodes the benefit of gift aid schemes for smaller charities in particular. Will the Minister consider working with the Charity Commission and the Office of the Scottish Charity Regulator to see whether it is possible to develop some HMRC-approved tools that might help smaller charities to take such schemes forward and benefit from the gift aid small donation scheme? I would be interested to hear what the Minister has to say about that. Such strategic investment in the sector could protect public money and at the same time help grass-roots charities that do not have big infrastructure and bureaucracy at their disposal, keeping costs down for everyone.

I also reiterate what the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) said about clause 17(2)(a). These points have been raised by the Law Society of Scotland in particular, which, in recognising that a balance needs to be struck in the Bill, has pointed out that there is a difference between how “charitable purpose” is defined in Scots law and how it is defined in English law. I urge Ministers to engage with the relevant bodies to ensure that the Bill is absolutely devolution-proof and works equally well in both jurisdictions.

To conclude, the Bill is a step in the right direction. I support its principles, but as we go forward I urge the Government to look carefully at how it might be implemented more effectively and benefit more of the charities that currently will not manage to be part of the scheme. The hurdles are surmountable, and I hope those issues can be ironed out.