First changes to charitable donation contributions in a decade

Wednesday 16 December 2020

Deputies have agreed to increase the amount of charitable donations that will be matched by the States of Guernsey.

In an amendment to the 2021 Budget, Deputy John Dyke asked the States of Guernsey to do more to support the “rich tapestry of good people serving their community” in the third sector.

“We must always appreciate and never overlook our priceless charitable sector,” he said.

“Unfortunately, in a small way, the States have overlooked it for the past ten years, and my amendment is designed to put that right.”

A decade ago, the States created a new contribution scheme to encourage charitable donations; rather than granting a tax break to the donor, as was previously the case, the States currently matches 25% total annual donations between £500-£5,000. Deputy Dyke’s successful amendment increases this cap to £7,500.

While the 2021 Budget is largely characterised by difficult decisions and "no easy answers", he believes that this increase in expenditure will be overall beneficial to the island.

“I appreciate our financial difficulties, but this is a point that hasn’t been upgraded in 10 years,” he said.

Pictured: Deputy Dyke’s amendment is expected to cost £52,000 per year – but as he and Deputy Trott pointed out during debate, this could change based on how much people choose to donate throughout the year.

“It’s not pure expenditure. The money that’s used by charities, in many cases, relieves pressure on the States, to do things covered by the ground that they cover.”

Many Deputies agreed in principle that charitable work was vital to our communities and well worth supporting. However, Deputy Gavin St Pier argued that this contribution scheme was something of a "blunt instrument", and that the amendment would not necessarily provide support where it was needed most.

“A lot of work was done in relation to charitable work a number of years ago, and that analysis showed that the contributions that benefit from this ‘gift relief’ do not get shared by all charities equally,” said Deputy St Pier.

“They disproportionately benefit a smaller subset of charities, in particular the churches. And there’s absolutely nothing wrong with that, and there’s no great understanding of why that’s the case."

“But the point is that this is actually quite a blunt weapon, this doesn’t support the donations of those putting money into a collection box on a Saturday. It’s not necessarily as effective as some people might expect.”

Pictured: Chief Minister Peter Ferbrache supported the amendment, saying that charities can look forward to being able to expand their "wonderful work" in the future.

In response to these concerns, Deputy Dyke suggested that further measures could be looked into to; expand the scheme, better support smaller donations, include further increases to the contribution cap or adjusting the 25% rate at which the States contributes.

The amendment was ultimately passed in a unanimous recorded vote.

Pictured top: Deputy John Dyke pushed for the change to States charitable contributions.