Is this the opportunity for GWWC to expand into the EU—i.e. to see if there’s a format that would enable transnational donations to be tax-deductible from anywhere in the EU?
I keep getting feedback that tax-deductibility isn’t a big deal. For example, in the UK, it seems to be limited to the charity being able to claim back an extra 25%. (I’m not an expert on this).
But my point is that in much of the EU, tax-deductibility allows you to roughly DOUBLE your net donation.
In Belgium, I could choose to give 100 euros to GWWC, or, with the same net cost, give 100/(1-.45) = 182 euros—almost double—to a registered charity like the Red Cross. In Germany, I could donate up to 20% of my income, and it would be fully tax-deductible, meaning that if I’m paying tax at 50% on my marginal income, I could donate twice as much for the same net cost. I could give 100 euros to GWWC, or give 200 euros to the Red Cross and receive 100+ euros back as a tax rebate (or a reduced tax bill).
Even if EA arguments might convince me personally that it would still be much better to support the most effective charities, whose impact may be 100 times greater, it’s unlikely that most tax-payers will be convinced.
But there’s another thing. Being a registered charity is a mark of trust. If someone tells me to support Charity X who are doing amazing work, but I don’t know the, but I find them on the list of registered charities, that reassures me that they are a reputable, vetted organisation.
I haven’t done much research into this, but it would be interesting to see if a model exists to formally do this across all the EU countries. Failing that, it would be worth prioritising based on potential benefits.
(to be clear, although I’m writing this comment here, I’m very conscious that both GWWC and Charity Entrepreneurship are aware of this opportunity—so really this comment is aimed at anyone else who might have knowledge or ideas).
Not the main point of your post, but tax deductibility is a big deal in the UK as well, at least for higher earners; once you earn more than £50k donations are deductible at a rate of at least 40%, i.e. £60 becomes £100.
You are probably aware of this, but I think this is a great reason why CE just launched an Effective Giving Incubation program, and we should apply to start new Effective Giving Initiatives in underserved countries. (Belgium is even mentioned as a top-recommended country)
I looked into this for a few hours a while ago—it’s crazy to me that Cross-Border commerce is so easy in the EU, but tax-deductible cross-border donations are not.
I think there should be a push for harmonizing EU rules on tax-deductibility. Two scenarios:
You could make anything that’s deemed a charity/public benefit in an EU country automatically deductible everywhere.
Or, if member states can’t agree on criteria, create a new legal status for some orgs that means they are automatically deemed public benefit by any EU country. Ideally, this status would also be available to non-EU entities.
I would like to make this happen, but I have no idea how.
Soon we’ll have a critical mass of people interested enough to make it happen! I’m looking to find out more about who specifically would need to be convinced, and who would need to be involved to make it happen. I presume it’s something that would have to be led out of Brussels (where I live), but it’s not immediately obvious who (or even what DG of the Commission) would be involved. But I’m sure someone would know, and we can then start pushing to make it happen. It’s such an obvious, positive step that it’s hard to imagine anyone objecting with the possible exception of existing charities who benefit from these exclusive rights—but I have enough faith that most people working in charities are not the type who would object to enabling others to get tax-benefits to achieve really important and impactful goals.
On further googling, there is actually an active proposal by the Commission! The proposed directive introduces a new type of legal form (the “European cross-border association”), which will make it a lot easier for non-profits to operate across the entire EEA.
However, at this stage, the issue of taxation is not addressed. The European Parliament is expected to work on the proposal before the election next year, so now may be a good time to call further attention to this :)
Is this the opportunity for GWWC to expand into the EU—i.e. to see if there’s a format that would enable transnational donations to be tax-deductible from anywhere in the EU?
I keep getting feedback that tax-deductibility isn’t a big deal. For example, in the UK, it seems to be limited to the charity being able to claim back an extra 25%. (I’m not an expert on this).
But my point is that in much of the EU, tax-deductibility allows you to roughly DOUBLE your net donation.
In Belgium, I could choose to give 100 euros to GWWC, or, with the same net cost, give 100/(1-.45) = 182 euros—almost double—to a registered charity like the Red Cross. In Germany, I could donate up to 20% of my income, and it would be fully tax-deductible, meaning that if I’m paying tax at 50% on my marginal income, I could donate twice as much for the same net cost. I could give 100 euros to GWWC, or give 200 euros to the Red Cross and receive 100+ euros back as a tax rebate (or a reduced tax bill).
Even if EA arguments might convince me personally that it would still be much better to support the most effective charities, whose impact may be 100 times greater, it’s unlikely that most tax-payers will be convinced.
But there’s another thing. Being a registered charity is a mark of trust. If someone tells me to support Charity X who are doing amazing work, but I don’t know the, but I find them on the list of registered charities, that reassures me that they are a reputable, vetted organisation.
I haven’t done much research into this, but it would be interesting to see if a model exists to formally do this across all the EU countries. Failing that, it would be worth prioritising based on potential benefits.
(to be clear, although I’m writing this comment here, I’m very conscious that both GWWC and Charity Entrepreneurship are aware of this opportunity—so really this comment is aimed at anyone else who might have knowledge or ideas).
Not the main point of your post, but tax deductibility is a big deal in the UK as well, at least for higher earners; once you earn more than £50k donations are deductible at a rate of at least 40%, i.e. £60 becomes £100.
You are probably aware of this, but I think this is a great reason why CE just launched an Effective Giving Incubation program, and we should apply to start new Effective Giving Initiatives in underserved countries. (Belgium is even mentioned as a top-recommended country)
Absolutely—I love this initiative and I’ve applied, but also volunteered to help out if I don’t end up being one of the founders.
I looked into this for a few hours a while ago—it’s crazy to me that Cross-Border commerce is so easy in the EU, but tax-deductible cross-border donations are not.
I think there should be a push for harmonizing EU rules on tax-deductibility. Two scenarios:
You could make anything that’s deemed a charity/public benefit in an EU country automatically deductible everywhere.
Or, if member states can’t agree on criteria, create a new legal status for some orgs that means they are automatically deemed public benefit by any EU country. Ideally, this status would also be available to non-EU entities.
I would like to make this happen, but I have no idea how.
Soon we’ll have a critical mass of people interested enough to make it happen! I’m looking to find out more about who specifically would need to be convinced, and who would need to be involved to make it happen. I presume it’s something that would have to be led out of Brussels (where I live), but it’s not immediately obvious who (or even what DG of the Commission) would be involved. But I’m sure someone would know, and we can then start pushing to make it happen. It’s such an obvious, positive step that it’s hard to imagine anyone objecting with the possible exception of existing charities who benefit from these exclusive rights—but I have enough faith that most people working in charities are not the type who would object to enabling others to get tax-benefits to achieve really important and impactful goals.
On further googling, there is actually an active proposal by the Commission!
The proposed directive introduces a new type of legal form (the “European cross-border association”), which will make it a lot easier for non-profits to operate across the entire EEA.
However, at this stage, the issue of taxation is not addressed. The European Parliament is expected to work on the proposal before the election next year, so now may be a good time to call further attention to this :)
Wow, I hadn’t heard that. That’s good news.
Indeed, let’s see what we can do to impact this!