More than US$150 billion has been promised to charity by 40 US billionaires led by Bill Gates and Warren Buffett. Enormous benefits would follow if giving on this scale could extend to the UK. Unfortunately, apart from the fact that there aren’t as many billionaires in the UK, three major problems deter large scale donations in the UK.

First, there simply isn’t an established culture of large-scale giving. Average giving in the USA is twice that in the UK, although UK residents give much more than in other European countries.

Second, and closely related to this, wealthy individuals who follow a philanthropic course are often seen as flaunting their wealth, suggesting a 'loads a money' attitude that simply isn’t 'British'.

The major problem though, is that the tax authorities can actually make life difficult for large donors and for the charities that receive funds from them.  The draconian substantial donor rules have already caused at least one charity to refuse a multi-million pound donation while gift aid, undoubtedly one of the world’s best reliefs for giving, is complex and easy to get wrong. 

Fortunately both of these are currently under review and likely to be reformed. However, if the government’s dream of a Big Society, with philanthropy as one of its core values, is to become a reality then ministers must get behind this and deliver a tax system that really encourages giving.

If you’d like to learn more about the latest tax issues for charities, have a look at Baker Tilly's Charity and Tax Update.