New tax laws see donations drop in France

Changes to French tax laws saw donations fall steeply in 2018, according to figures from France générosités, which represents 97 charitable organisations across the country.

France générosités’ figures show that across the whole year, major donations through tax wealth to its members fell by 54% – or €150 million – in 2018. It largely attributes the drop to recent changes in the country’s tax laws, which saw the IFI property tax introduced in 2018 to replace the previous ISF tax on wealth.

Previously, households with an income over €1.3 million were able to deduct 75% of charitable contributions (or up to €50,000) from their declarations. The new property tax however, it states, is applicable to half as many people as before, resulting in the steep fall in major gifts.

Other changes, including an increase in the generalised social contribution tax CSG on pensions and the overall social climate, have also affected all donations with a 6.5% fall on individual giving as a whole in the first half of 2018. France générosités figures show that 28% of taxpayers are now planning to change how they give while one in five retirees intend to reduce, postpone or stop their giving altogether.

Overall, France générosités’ figures show that individuals give around €4.5 billion to charity annually, with a further €3 billion raised through corporate philanthropy. It also found that 44% of French people give at least once a year, with 40% of donations made in the last quarter of the year, mainly in December.

Children’s charities are the most popular, supported by 33% although this was down 2% on the previous year in 2018, followed by those addressing poverty and exclusion, and supporting the disabled, both at 29%. Support for the latter however rose from 22% in 2017, putting it into third place for the first time.

Laurence Lepetit, chief executive of France générosités called for charities to work to increase people’s awareness of the importance of continuing to donate, commenting:

“After a year driven by fiscal issues, we have a duty to change the discourse and develop the public’s understanding of the impact of their donations on not-for-profit programmes and beneficiaries. Giving is an important part of our social contract.”