Danish legal changes leave country’s charities ‘increasingly disadvantaged’ 

A new rule on inheritance tax is the latest example of Denmark’s government creating a more difficult financial environment for charities, says the head of EFA member ISOBRO.

Kenneth Kamp Butzbach, the body’s secretary general, wrote recently that there is a paradox in the way the government praises the charitable sector and indicates that it has high ambitions for it, but then implements bills “which make it harder for organisations to raise money”.

In the article – posted on ISOBRO’s website and political news website Altinget – he points out several examples of this, with the latest being reforms to inheritance tax. By abolishing this tax when an estate is passed to nieces and nephews, the government has weakened the incentive to give legacies to charities, he argues.

Butzbach says of this specific change:

“We are undoubtedly looking into a major decline in donations from inheritance as a consequence, which will have serious consequences for the funding of social efforts, nature projects, emergency aid and support for vulnerable groups.”

Additional challenges

He lists several other changes from recent years including reforms of the country’s postal service, which has led to “rising postage prices and poorer quality”; new regulations being put on telephone fundraising; and stricter financial reporting requirements for charities’ fundraising income.

The week after that article was published, ISOBRO published another item on its website noting with disappointment that the Government’s finance bill did not contain a new foundation law, despite having been proposed earlier this year. ISOBRO says that a new law is “essential for both foundations and the many civil society organisations that cooperate with them”.

Better assessments needed

In the Altinget article, ISOBRO proposes that the government could motivate more people to give by raising or removing the tax deduction ceiling for donations.

It also suggests that it should be a requirement that all legislative processes are subject to a civil society impact assessment, similar to existing assessments which examine climate and business impacts.

Butzbach’s article concludes:

“In its own words, the government has high ambitions for civil society. But if the government and parliament say their words of praise about the importance of civil society, they must give us the framework to do our job.”

Despite the unfavourable environment, the latest Nordic Donor Survey found that Denmark was more generous than its three Northern neighbours, as previously reported by Fundraising Europe.

Picture by Wesley Tingey on Unsplash