This is according to a YouGov survey for Charities Aid Foundation (CAF), which also says that this number has grown from 39% this time last year.

Nearly 8m Britons are eligible for this tax relief due to being higher and additional rate taxpayers – meaning that they earn more than £50,271 (€57,700) a year, or £43,663 in Scotland.

If a taxpayer gives £100 to charity, the charity may claim an additional £25 in Gift Aid. If the donor is a higher rate taxpayer, they can also reduce their tax bill by £25 – or slightly more if they are based in Scotland, or are an additional rate taxpayer with annual earnings exceeding £125,140 (€143,500).

Even though more than half of those 8m are aware of the relief being available, only half of that group (meaning around 2m people in total) actually make use of it.

A third (30%) of those who do claim the tax back say they do it in order to give additional money to charity, and 24% say that an accountant or financial adviser recommended doing it.

Another quarter of those taxpayers are aware of the incentives but don’t claim anything back, with the most common reason being that they didn’t keep a record of their donation.

Two in three (65%) of higher and additional rate taxpayers made charitable donations in the last 12 months, versus 55% of the population as a whole.

They are also more likely than the average donor to ensure the charity is able to claim Gift Aid (69% versus 60%), even if they do not then take the next step of claiming back the tax for themselves.

Mark Greer, managing director at Charities Aid Foundation (CAF), says:

“As the number of people donating falls, and charities are under increasing strain, it’s important that more people understand the tax incentives available when giving to charity. 

“With more people expected to enter higher tax brackets, knowing this relief is on offer to them could encourage higher rate taxpayers to consider donating more, unlocking additional funds for these crucial services. It’s great that advisers are raising the topic with their clients and we encourage more to do the same.”

As Fundraising Europe noted last year, the number of UK residents who gave money each year dropped by 4m between 2019 and 2024.

Picture by Tim Alex on Unsplash

Donation deductibility has been part of the Finnish tax system in some form for decades. Originally introduced to support national defence and other wartime needs, it reached its broadest scope in the late 1980s before being significantly limited during Finland’s comprehensive tax reform, which aimed for a simpler and more neutral tax system by eliminating various deductions.

Current rules allow:

• Private individuals to deduct donations of €850–500,000 if given to publicly funded universities in the European Economic Area (EEA).
• Legal entities to deduct donations of €850–250,000 given to EEA-based universities, and €850–50,000 given to associations or foundations (nominated by the Tax Administration) supporting science, arts, or Finnish cultural heritage.

The newly proposed reform introduces several key updates:

• Expanded eligibility of donation purposes and recipients: Tax-deductible status would extend to cash donations made for purposes that promote science, arts, the preservation of Finnish cultural heritage, youth work or youth activities, physical activity and sports and the welfare of children.
• For private individuals:  The tax deduction is 30% for donations of at least 500 euros. Annual caps: €50,000 for EEA-based universities, €5,000 for associations and foundations.
• For legal entities: The tax deduction is equal to the amount of corporate tax for donations of at least €850. Annual caps: €250,000 for EEA-based universities, €50,000 for associations and foundations.

Finnish fundraising association VaLa: A good development, but further improvements needed

VaLa’s response, from Pia Tornikoski, secretary general, and Tessa Robertsson, communication & advocacy coordinator, is as follows:

This reform is an important step toward strengthening a culture of giving in Finland. It has the potential to enhance the fundraising opportunities for civil society organisations by making private donations more attractive. We see the direction of the proposal as positive — especially if its implementation is carried out in close dialogue with the nonprofit sector. To ensure effectiveness, it is essential to avoid unnecessary duplication of efforts and to provide clear guidance to organisations.

However, several concerns remain that need to be addressed for the reform to be truly inclusive and impactful.

VaLa welcomes the proposal to broaden the range of eligible recipients. Nevertheless, the current draft excludes, by estimate, at least one-third, and potentially up to two-thirds, of all nonprofit associations and foundations from being eligible for tax-deductible donations. This means that many organisations working in environmental protection, animal welfare, health and social services, and international development would be left out.

Ironically, these are often among the most popular causes among Finnish donors, as numerous studies have shown. The exclusion of these organisations has been justified in the draft proposal only from a financial standpoint, without a transparent explanation of the underlying policy rationale.

VaLa strongly believes that all nonprofit associations and foundations holding an official fundraising permit should be eligible to apply for tax-deductible donation status. This would be the clearest, fairest, and most donor-respecting solution. There is broad consensus within the Finnish civil society sector on this point.

It’s important to note that Finland is an exception among many European countries in that all fundraising activities require either a fundraising permit (granted by the National Police Board) or, in the case of small-scale fundraising campaigns up to €10,000, a prior notification to the police. This means that Finnish organisations are already subject to significant regulatory oversight when raising funds. Adding another filter for eligibility would place an unnecessary burden on many nonprofits that are otherwise highly trusted and well-governed.

Since tax-deductible donations would be a new concept for many Finnish donors, a broad and coordinated public communication effort is essential. Civil society organisations alone cannot shoulder the burden of building public trust and awareness around this new framework. Clear, supportive messaging from public authorities is crucial to explain the purpose of the tax deduction, the value of giving, and the societal role of civil society organisations.

Final thoughts

VaLa considers the reform of donation deductibility an important part of a broader effort to strengthen the Finnish civil society. It must be seen not in isolation, but as one piece of a comprehensive framework that supports the diversity, sustainability, and resilience of the nonprofit sector.

While important, tax deductibility alone cannot compensate for recent cuts in public funding. VaLa stresses that additional supportive measures are needed to improve the fundraising environment, such as:

• reforming gambling legislation to allow nonprofit-led lotteries and raffles,
• introducing VAT relief options for nonprofit organisations.

Based on VaLa’s experience, fostering more inclusive and participatory dialogue between public authorities and civil society actors is essential for effective and future-proof fundraising development.

Five Belgian parties reached a deal on January 31 to form the new ‘Arizona’ coalition government, led by Bart De Wever from the nationalist N-VA party.

In response to the proposed measure in the coalition’s draft agreement, the Impact Coalition – a group of associations, federations and umbrella organisations of which EFA member Fundraisers Belgium is a member – has shared the possible impact of such a deduction with the parties involved and is calling for its removal.

This has included sharing the message in the media and sending a letter, endorsed by more than 180 representatives of fundraising organisations in the country – including Fundraisers Belgium members and supporters.

The Impact Coalition describes the threat of a reduced tax credit for donations as ‘a cold shower, instead of a warm encouragement for all that work for the social interest’. It says that the deduction would impact the donations of more than one million households who annually transfer more than €350 million in donations to charity, with an average of more than €300 per family.

The ‘gain’ for the federal budget would be limited, it adds, bringing in just an estimated 50 to 55 million euros. However, the losses for the sector and for society would be far more significant, leading to a decrease in donations, and therefore in the resources of the organisations and institutions affected. In turn, this could have a negative impact on beneficiaries, as well as on employment and workload in the sector.

The Impact Coalition comments:

“The arguments were communicated to the parties involved and through the media. But unfortunately, this measure was not removed from the coalition agreement. However, a provision in the coalition agreement is not yet a legal measure: it would have to be amended in law (WIB92), thus get a majority in the House of Representatives. So the battle is not quite over yet.”

Picture by Patrick Robert Doyle on Unsplash

As reported by Fundraising Europe in late 2022, the country’s previous Government created a €250,000 limit for donations eligible for tax deductions in any one year, which came into law on 1 January 2023. There had until then been no such ceiling.

A letter to the Government from 21 charities, co-ordinated by GDN, said that the change would “have harmful consequences for the work of charities”.

GDN then ran a ‘Red de giftenaftrek’ (‘Save the gift deduction’) campaigns, which it said received significant support.

On 15 November, GDN reported that a proposal by three members of the Tweede Kamer (the lower house of parliament), to increase that limit to €1.5m per household per year, had been accepted. It is yet to be formally put into law, but GDN nonetheless welcomed the decision as “very good news”.

However, GDN notes that the amendment would not impact the restrictions on tax deductions for corporate donations, which it says should be lifted to encourage further giving.

In addition, GDN and the interfaith group CIO have commissioned a committee of experts, chaired by former politician Alexander Rinnooy Kan, to provide advice on potential changes to the gift deduction system. Its final publication is expected later this year.

Picture by the Tweede Kamer, used under CC-BY-NC 4.0 license for non-commercial use

The Geen hogere btw (‘No higher VAT’) campaign says that the proposed rise from 9% to 21% would raise around €2.2bn per

Graphic for the No higher VAT campaign

year for the government.

The campaign also dismisses the idea that the tax rise would primarily impact higher earners. Its website notes that the average share of household expenditure on cultural consumption is 1.2%, and that while this does rise slightly in higher income groups, it is still 1% for those with lower incomes.

The campaign had advertisements in major newspapers on 3 June, and has been encouraging supporters to use social media to signal their opposition.

Alongside EFA member GDN, organisations supporting the campaign include the Dutch Olympic Committee, the country’s football governing body (KNVB), and a range of arts, heritage and cultural bodies.

Geen hogere btw’s website says that these organisations oppose the “burden” of this tax change, explaining:

“It places an additional burden on your precious free time, your curiosity and your health. Playing sports keeps you physically fit. Attending a concert or football match contributes to your mental well-being. A newspaper or daily newspaper keeps you informed about world events. Reading a book broadens your world, relaxes, enriches and deepens it, and a pleasant hotel stay is essential for a successful weekend away.”

Meanwhile, GDN is also working in coalition as it fights proposals to reduce the tax deductions applied to charitable donations. At the start of June, GDN director Margreet Plug had a letter published in the newspaper AD, alongside Jurjen de Groot of the Christian group Kerk in Actie and Pieter Grinwis, an MP from the ChristenUnie (Christian Union party). They wrote:

“The new coalition’s intention to drastically reduce the gift deduction testifies to a poor vision of society. Moreover, it is also an unwise austerity policy: the bill will inevitably return if charities and churches are forced to scale back their important work in society. As far as we are concerned, that is a very bad thing.”

Main picture by Karolina Grabowska on Pexels

The public finance plan was approved on April 25, 2024. The specific details, such as how eligible donation recipients will be defined or what the lower and upper limits for tax-deductible donation amounts will be, will become clear once the preparation work for the reform is completed. VaLa aims to be involved in the preparation work.

The current situation

Until now, private individuals in Finland have been able to receive tax deductions only for donations to universities, with donations qualifying for deductions ranging from 850 to 500,000 euros. Additionally, companies have been eligible for tax deductions on donations ranging from 850 to 250,000 euros for contributions to science, art, or the promotion of Finnish cultural heritage.

Positive move

The proposal from the budget framework session acknowledges the significance of donations to the nonprofit sector’s work and moves the regulation of tax deductions for donations in the right direction; earlier this spring, the Finnish government decided to cut funding for nonprofit organizations, so compensatory measures are needed. Experiences from other countries suggest that broader tax deduction eligibility encourages more people to donate. It also increases trust in fundraising among citizens and businesses.

Limits of eligibility

However, the most popular donation causes among Finns are excluded from the tax deduction eligibility. These include helping the most disadvantaged in the home country, humanitarian aid and disasters, environmental and nature conservation, animal welfare, and disease prevention and treatment. VaLa has long advocated for extending tax deduction eligibility to include all entities with a fundraising permit, which is managed and supervised by the National Police Board in Finland.

One of the major proposals is to make it possible to get tax relief on donations to education, sport, human rights and animal protection charities.

The Government predicts that donations to organisations in these areas will almost double as a result, and FVA says that it will impact more than one million donors. In the area of education specifically, a recent study cited by FVA suggests that the reforms could help up to 8,000 students to receive additional support.

Donations to certain nonprofits were made tax deductible in the country in 1994, and the list of eligible causes was significantly expanded in 2009. Since 2009, donations to the roughly 6,000 eligible organisations have nearly trebled, reaching €900m in 2022, according to FVA.

However, the organisation has previously warned that the trend of increasing donations was unlikely to continue into 2023, in part due to those inconsistencies on tax deduction eligibility.

The Government’s reform package also removes the cap on tax-deductible donations, which FVA says should make Austria more attractive to philanthropists globally. Other measures will make it easier and quicker for smaller clubs to apply for tax-deductible status.

Outside of tax, the reform improves legal protections for volunteers, and allows them to receive volunteer allowances of up to €1,000 per year.

The reforms were submitted by the Government for a legal review on 12 October 2023.

Günther Lutschinger, managing director of the FVA, says:

“After almost two years of exchanges and consultations with politicians and administration, there is great joy about a package of measures that creates truly first-class conditions for a strong culture of giving, from volunteering to the tax deductibility of donations to the foundation system – this is a milestone for the third sector in Austria.”

Picture by Snapwire via Pexels

Currently in the Netherlands, there is no maximum for tax deductibility with donations. However, a new law will cap the deduction of regular gifts at €250,000 per household per calendar year from 1 January 2023.

While an announcement on the Government website suggests that it is “undesirable” for donors’ taxable income to be “greatly reduced or even reduced to zero”, it also says that the new law will impact only a “very small group of taxpayers”.

However, in a letter to the Government 21 charities, co-ordinated by EFA member Goede Doelen Nederland and sent on 27 October, say that this is “a measure that, perhaps unintentionally, will have harmful consequences for the work of charities.”

The letter adds: “Since the group of wealthy Dutch people is responsible for a substantial part of the donations in our country, limiting the donation deduction could therefore mean a substantial loss of donations.”

The letter also cites research showing that 40% of wealthy Dutch people would donate less if the gift deduction level were reduced, and argues that the new rule contradicts the government’s own philanthropy policy.

Opposition politicians were also firmly against the law, according to an article by philanthropy advisor Rien van Gendt.

In a piece in the newspaper Financieele Dagblad, he argued it was essential “that citizens have the freedom of choice to strengthen the public good… the government has no monopoly on public interest”. Van Gendt also expressed a concern that the move could lead to further erosions of the gift deduction rules.

Picture by: Wereldbestormers on Pixabay

The Impact Coalition seeks changes in ten areas from Belgium’s Ministers of Finance, Justice and Home Affairs. Top priorities are a 60% tax reduction on donations, modernisation of the regulations for collecting donations, and a reduction in the administration and formalities they have to undertake.

Erik Todts of the Association for Ethics in Fundraising (VEF) said:

“We are asking the government to permanently increase the tax deduction for donations to 60%. Supporting charities should be encouraged as much as possible.”

Jan Van den Nieuwenhuijzen, President of the Belgian Federation of Philanthropic Foundations (BFFS), added:

“We want to spend our time as meaningfully as possible, not lose it to outdated rules and formalities.”

The Impact Coalition consists of nine associations, federations and umbrella organisations, including the Association for Ethics in Fundraising (VEF), the Belgian Federation of Philanthropic Foundations, and Fundraisers Alliance Belgium. Together they represent thousands of the country’s associations and foundations.

Belgium boasts an active nonprofit sector, with more than 100,000 organisations active across the country. Data from 2015 shows there to be over 570 public benefit foundations and 1,180 private foundations. 760 of those have a public interest mission. In addition, there are 2,265 international nonprofit associations with a registered office in Belgium.

Photo by Petar Starčević on Pexels

The Third Sector Platform (PTS), which represents around 28,000 organisations, is behind the seal, supported by the Ministry of Social Rights and the 2030 Agenda. The distinction will be awarded as of next year to companies that seek to generate a positive impact on society by checking the Solidarity Company Tax Box. 

Ticking this box allows the state to allocate a proportion of that company’s corporation tax (0.7% in 2021) to the financing of social projects with the objective of building a fairer and more inclusive society. Any organisation required to file a corporate tax return is eligible to participate.

The seal was presented during an event last month, ‘The Third Sector and the companies that add up’, which was attended by sector representatives, organisations and companies.

The event was moderated by Paquita Sauquillo, PTS member and coordinator of Casilla Empresa Solidaria, a campaign led by Third Sector Platform to raise awareness and increase uptake of the scheme.

During the event, she commented:

“We want to ensure that all companies in our country, regardless of their size or sector, join the Third Sector and collaborate with social entities. The reality of our times, marked by inequalities and social imbalances, as well as by the climate, health and economic crisis, demands urgent changes in the social and economic model. Companies play a very important role, having the opportunity to focus and direct their actions towards creating value for society as a whole and for the planet.”

Photo by Stevepb on Pixabay