Belgium increases tax incentives for a stronger Philanthropy culture

During the COVID-19 pandemic, philanthropic organisations across the continent acted as frontline defenders to provide urgent support to the most vulnerable segments of our society. When it comes to recovery plans and measures, however, philanthropy and wider civil society are often overlooked. Some countries have however increased tax incentives to stimulate more private giving.

Philanthropy Advocacy welcomes the initiative of the Belgian authorities to double the ceiling for tax deductibility of donations made during 2020 to public benefit organisations from 10% up to 20% of the net income of the donor.At the same time, the tax deduction for donations made in 2020 to approved institutions will be increased from 45% to 60%in 2020. Both changes increase private actors’ incentives to contribute to the public good in a specific moment of crisis.

The proposal to raise deductibility from 45% to 60% was made explicitly in an open letter published by the Association for ethical fundraising (AERF-VEF) in early May (see French versionof the letter). The main arguments used to justify the measure are two-fold. First, the need to compensate losses caused by confinement measures was highlighted, especially for associations and foundations relying heavily on street fundraising. Second, the need to encourage private philanthropy as an indispensable complement to public action in addressing the economic and social consequences of the crisis.

The Belgian authorities explicitly recognise the importance of a strong philanthropy culture, stating that newly introduced tax benefits target “the voluntary sector and will support NGOs and non-profit organisations whose activities of general interest have been severely affected by the crisis.”

“An increase from 10 to 20% of the share of net income eligible for tax deductions for donations. At the same time, the tax reduction for donations to approved institutions will be increased from 45% to 60% in 2020. The latter provision is aimed in particular at the voluntary sector and will support NGOs and non-profit organisations whose activities of general interest have been severely affected by the crisis.” https://www.premier.be/en/new-measures-third-part-federal-plan-social-and-economic-protection