The Gift of Giving

The Gift of Giving

If you are preparing for the worst, it’s easy to believe the worst. When one newspaper reported what seemed like another cruel detail of a punishing National Budget for 2013, it caught much attention and criticism: “Philanthropic donations will now be subject to a new 31 per cent tax of what is donated.” It was also completely wrong.

The measure, a legislative change to Section 848a, is actually for tax relief on charity donations, of 31 per cent, which, ironically, is intended to simplify a process hitherto clogged with bureaucracy.  It also has implications, potentially very good ones, for a theatre sector encouraged to become more sophisticated in its approach to philanthropy.

The changes do not apply to all donations, though. First, the recipient must have charitable status, recognised by the Revenue Commissioner, such as larger organisations like the Abbey, the Dublin Theatre Festival or the National Concert Hall. Second, the donation must come from an individual, either PAYE or Self-Assessed, as opposed to a corporate donor. Third, the donation must amount to €250 during the year (in lump sum or instalments) to exploit the benefit: a refund of 31% of the donation that goes to the charity, not the donor; or €112.32 for every €250 donation.  

According to Andrew Hetherington, project director with Business to Arts, which was part of the Working Group with the Irish Charities Tax Reform Group which advised the Finance Minister, the legislative change offers an “overwhelming opportunity” for charities who are close to commanding donations of €250 or more, or currently receiving such donations and not realising the full tax relief. Encouraging individuals to donate in such amounts has not always been easy: many ‘Friends’ schemes, for instance, come in at under €250 per person. Nor has the process of claiming tax relief, so impeded with red tape - “a small amount of money for too much work,” as Hetherington puts it – seen a huge uptake. Now, though, making the case for such donations, as well as claiming their extra benefit, have become much simpler processes. In short, you can turn €250 in €362.

This may at least begin to address a glaring imbalance between expectations of philanthropy and its reality: while philanthropy has become the watchword of Minister Jimmy Deenihan’s Arts department, less than 3 per cent of the turnover for Arts Council-supported organisations comes from donations, memberships or subscriptions. There are still perceptions of potential impediments, however, and certain worries. It can take at least 15 months to receive the tax refund (donations made from this January will be eligible, with benefit realised in the Q1 of 2014), and self-assessed taxpayers can no longer claim a deduction on their donations – if they are motivated purely by self-interest, there’s little reason for them to continue. That, however, seems to ignore a higher motivation: the gift of giving. Now with 31% extra.

Peter Crawley is News Editor of Irish Theatre Magazine


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