The suggestion that £74bn could be pumped into charities via remainder trusts and a new type of trust, as proposed by a paper last week, is not supported by either evidence or demand, says Joe Saxton. 

Over the next decade charities and fundraisers will need to explore all possible ways of raising additional funds. And one of the sad facts is that over the last decade the government has focused little of its energy or funds on fundraising compared to volunteering or social enterprise.

So this means that we need to know and understand all the possible ideas for raising more funds. And we need to do this rigorously and innovatively. So the recent report by Prof Paul Palmer from the Centre for Policy Studies A step change in UK philanthropy ought to be a welcome contribution to the debate. Sadly it is anything but.

With the level of giving from individuals in the UK currently at around the £4bn a year mark, anybody who proposes some new sources of income that could be worth £74bn is making some pretty bold claims. Sadly not a shred of evidence is put forward to justify this figure – indeed it appears to have been plucked out of thin air. Equally disappointing is that no evidence is put forward that there is any demand for the two new sources of revenue, remainder trusts and a new form of charitable trust.

One of the recommended reforms, ‘remainder trusts’, have become a ‘cause celebre’ for parts of the charity sector despite the factor that rather like Sellafield they have had to change their name in order to slough off a tarnished reputation. Ten years ago remainder trusts were called lifetime legacy trusts. Name change or not they suffer from the same problem today as a decade ago – they are virtually inexplicable to all but finance geeks. Although I was chair of the Institute of Fundraising for three years and have three degrees I never heard a decent explanation of how remainder trusts work or why they would appeal to fundraisers.

It is also interesting that the fundraising community, who would be one of the key promoters of remainder trusts, has been more interested in watching paint dry than promoting this new form of fundraising.

The second type of reform is a new type of charitable trust with lighter regulation. Call me simplistic but the simplest form of charitable trust is called writing a cheque. If I want to give away £100,000 tax-effectively I can write a cheque and sign a gift aid declaration. I can give to any charity I choose. I can ask charities to pitch for my donation. So how would a new charitable trust unlock any additional funds?

Perhaps I am just being big, slow and stupid on these new forms of revenue, but if I am I can bet others will be too. If we are to raise more funds we need to know what fundraisers want and will promote. We need to see evidence of demand from donors. We need rigorous and well researched arguments. We need only the best ideas put forward to government. So for once I really hope government isn’t listening to the Centre for Policy Studies.

Joe Saxton is driver of ideas at nfpSynergy