By looking at a sample of 26 nations – detailed notes on each are available in a separate annex – this report will look at the way tax incentives regimes are conceived and implemented to ascertain the ideal approach to incentivising charitable giving. In identifying an ideal approach it will of course be necessary to define the ideal outcome. As an organisation which exists to try and create a sustainable resource base on which civil society can flourish globally, CAF believes that tax incentives should be judged to some degree on the extent that they elicit greater giving. However, if as is the case for CAF, an ideal scenario for civil society is seen as one where everyone is encouraged to give generously to a range of causes which is as wide and vibrant as the needs, interests, concerns and aspirations of the society it reflects, we must take a holistic approach which looks beyond the value of incentives and donor responsiveness.
- The balance of evidence suggests that people and corporations are responsive to incentives.
- Incentives for giving cannot be understood as an alternative model of public service delivery.
- Tax incentives are not the most important policy lever in motivating giving.
- Tax incentives are being used to side-line certain parts of civil society.
- Awarding donor-incentivised status to state controlled organisations erodes confidence in giving.
- Higher tax nations offer more compelling incentives.
- Complexity in claiming incentives limits donor responsiveness.
- Tax deductions are the preferred method of incentive globally.
- Most countries weigh pragmatism above concerns about progressiveness in designing their incentive regime.
- Tax credits are the most progressive model for incentivising giving.
- Hybrid systems – which mix deductive and credit based incentives – introduce unnecessary complexity.
- Corporations see, on average, more favourable tax conditions for giving than individuals.
- Globally, there is a wide variance of incentive values and cap levels.
- Cross border giving is poorly incentivised.
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- Copyright The Trustees of the Charities Aid Foundation 2016