Budget 2013 announced changes in the tax treatment of charitable donations
to registered charities. The changes were made with the objective of simplifying the process and on the foot of recommendations of The Forum on Philanthropy and Fundraising.

In 2018, Philanthropy Ireland engaged BDO to review the impact of the 2013 changes. Based on our analysis we concluded:

· Changes to the tax treatment of charitable donations have not resulted in an increased number of charities availing from the scheme. (In 2016 only c. 1,700 entities out of 8,000 register charities in Ireland availed of the scheme)

· The changes implemented in 2013 have not resulted in any meaningful increase in the value of donations. (Donations decreased by almost a quarter from €119.7m in 2010 compared to €92.4m in 2016)

· The current scheme has not been effective in mobilising large scale philanthropic giving, as the vast majority of amounts given are characterised as small charitable donations. (90% of fall within the €250 -€999 and 99% of all donations below €5,000)

· Changes to the tax treatment of charitable donations have not resulted in an increase in the number of donors since 2013.

· This level of restrictions/rejections would suggest that the scheme is not working as effectively as desired. (87% of claims filed by charities were subject to restriction)

· In terms of eligibility for tax incentives Ireland has a narrow eligibility and small number of organisations eligible for the incentives based on international comparisons.

Based on the above we believe that now may be an opportune time to re-visit the scheme with the objective of exploring what can be done to encourage greater levels of philanthropic giving in Ireland.

Summary provided by Austin Hickey and Ciaran Brannigan, BDO Ireland

The full report on the review of the impact of the 2013 changes is available here.