Letter: Save the arts

Your campaign for US-style tax incentives on donations to the arts could lead to a loss of income to Oxfam of pounds 3.5m a year, the cost of our development programme throughout central Africa.

Tax-efficient giving is a great incentive to donors. Oxfam is one of many charities which currently derives much of its voluntary income from large numbers of people covenanting valuable but small monthly amounts often as little as pounds 2. Under current arrangements the tax benefit is claimed by the charity. It seems unlikely that the proposed system will result in all small-scale donors going to the trouble of completing self-assessment tax forms to reclaim tiny rebates perhaps as little as pounds 7.17 per year.

While we understand and sympathise with the crisis in the funding of the arts, confining these tax changes to arts organisations could significantly skew current patterns of charitable giving by diverting money from voluntary organisations which are also facing similar funding pressures. In theory, we might in time be able to increase income from wealthy donors, already using self-assessment, to compensate for any loss we would suffer, but this is completely untried. Other charities will face similar challenges, and could see their incomes affected over time.

These proposals raise complex issues which require extensive and careful consideration across the voluntary sector. They should not be rushed through in a Budget now only weeks away.

DAVID NUSSBAUM

Financial Director

Oxfam

Oxford