Maman Poulet | Clucking away crookedly through media, politics and life

Guest Post – Indulging the Exiles

July 23rd, 2013 · No Comments · Irish Politics, Social Policy

Damian O’Broin is the director of Ask Direct, a fundraising and direct marketing agency.

Let’s get the disclosures out of the way first, shall we?

I earn my living in the charity sector, and have done for 20 years. I spend my days coming up with better ways to connect emotionally with donors in order to persuade them to make more and larger gifts to the organisations that employ my services.

I’m proud of my work, and I’m proud – and awfully privileged – to be able to support ‘charity’.

And right there we have the second thing we need to get out of the way – the definition of charity. Over the years, the term has become tainted, associated with a do-gooder, patronising, disempowering attitude. Hence the appearance of terms like non-profit, NGO and social enterprise as alternatives.

Today, I’m going to stick with charity, because that’s the term most people use. For me, charity is simply support for a cause that you care about or believe in. That cause could be the environment, it could be finding a cure for cancer, or it could be empowering lone parents to be able to fully participate in society. There needn’t be anything derogatory about it.

That’s a lot of introduction before I even get to the main point. But I think they’re points that need to be made.

Which brings me on to the Forum on Philanthropy’s proposals around tax exiles.

The Forum has proposed that tax exiles, if they donate €15 million over a ten year period, could get an extra 62 days in Ireland.

Now, I think promoting philanthropy is a great idea. I would love it if organisations and causes that I care deeply about had more money to invest in their work.

And if we look at our wealthiest citizens, their charitable giving is disappointingly low by international standards.

So, encouraging the wealthiest in our society to give more makes sense.

But this is where we run into problems.

Focusing either exclusively or primarily on giving by the super wealthy throws up a number of serious problems.

First of all, it means that it’s the interests of the rich that get well funded. Or, to put it another way, anything that challenges or threatens wealthy people won’t get as much. So children and health get the big gifts and are supported by the charitable trusts and foundations, whereas climate change and anti-poverty work struggle for support.

The second problem is that it leads to a tendency to give special privileges to the rich. Why should donors who can afford to give lots of money get kickbacks that less well off donors don’t get?

The current tax efficient giving regime is a case in point. If you donate more than €250 a year, the charity that receives your gifts can claim back the tax you paid on it. But if you give less than €250, they can’t. (In contrast, in the UK, there is no threshold and tax can be reclaimed on all gifts, no matter what the size).

But the €250 threshold is small fry compared with the proposal to give tax exiles extra days in Ireland in return for charitable donations.

Tax benefits do matter to donors, especially high-value donors. It’s rarely the primary motivation or driver, but it is a consideration.

And the Forum on Philanthropy’s proposal would work, in the sense that it would generate additional gifts from our tax exiles. Chuck a few quid to a charity and get an extra two months in Ireland? No bother.

But efficacy can’t be the only consideration. We have to consider equity. And we have to consider ethics.

Because this is an inequitable and unethical proposal.

It says that if you’re rich enough to live as a tax exile, you can get special benefits by making donations to charity.

And it says that if you’re rich enough to live as a tax exile, you can substitute charitable donations for tax payments.

(I wonder is this the real motivation here. The privatisation of taxation and social provision. A world where the rich get to choose where their charity goes, while the poor have to cough up their taxes.)

This proposal stinks. We are selling indulgences and offering unrepentant sinners extra days in the promised land.

The charity sector is about ethics, equity, fairness, justice. It’s about making the world we live in a better place. But if we support this proposal we will bring shame on ourselves. We will allow ourselves to be used by incredibly wealthy people living in luxury abroad to avoid paying tax – at a time when our public services are being hollowed out and hundreds of thousands of our fellow citizens are out of work, living in poverty and being forced to emigrate to find work.

Let’s nail our objections to the door and make it clear that while we want to encourage philanthropy, it can’t be at the expense of fair and equitable taxation.

 

Editors Note – This is the first in a series of guest and MP pre-budget guest posts. Anyone who would like to pitch a post can of course contact me at tips @ mamanpoulet.com

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