Charles Saumarez Smith, Secretary and Chief Executive of the Royal Academy of Arts on plans to boost philanthropy.
The Royal Academy of Arts is in the unusual position amongst arts institutions in that it has been entirely private and determinedly independent of central government for the last 242 years. It therefore contravenes the orthodoxy that it is impossible to run an arts organisation without public subsidy.
As a result of this highly individual situation, we feel strongly about the need to improve the circumstances and support of individual philanthropy. So, we are delighted that Jeremy Hunt is taking the initiative in looking at, and thinking about, how it can be made easier for individuals to give money to cultural institutions.
The Royal Academy’s own view as to what needs to be done is:
1. Do everything possible to make everyone (and not just lawyers and tax advisers) understand how easy it is to obtain tax benefits under the present tax system.
2. Gift Aid is currently very successful and an important source of revenue for the Royal Academy (it generates over £1 million pa). We would like to see greater take-up of gift aid by clarifying the message and literature to donors (they get 100% tax relief on their donations); lobbying all solicitors and financial advisors to ensure they fully understand the benefits of the scheme and promote it to their clients; introducing an ‘opt out’ for donors on gift aid, rather than asking them to ‘opt in’.
3. Make charitable donations deductible on every citizen’s income tax return.
4. Change the tight restrictions around the provision of benefits to donors.
5. Encourage the growth of endowments through legacies, by introducing lifetime giving, so that the donor receives tax relief on their gift to a cultural organization during their lifetime.