How ISF repeal, CSG increase and withholding tax affect French generosity

NGOs are organizing to mobilize donors and engage the youngest with a new generation of fundraising and payment methods.

According to the April Barometer by France Generosites, foundations and associations with general interest will receive 4.2% less revenue in 2018 than in 2017. According to professionals in the industry, it was the fault of a series of tax upheavals. Foremost among these is the transition from Wealth Tax (ISF) to Real Estate Wealth Tax (IFI). The associated tax advantages certainly haven’t disappeared, but the basis of this tax has melted and is now less popular. Nolwenn Poupon of France Generosites details: “According to our estimates, the loss of donations on the device will amount to between 13 and 150 million euros, which is about half of the ISF donations in 2017”.

An increase in pension CSG would also weaken collections. Stephane Dauge of the Apprentis d’Auteuil Foundation reports: “We receive about 10 letters a week from donors who explain to us that paying €20 less a month no longer allows them to accompany us”. That’s not trivial, given the share of retirees in fundraising — nearly 60 percent of donations reported to tax authorities under the income tax deduction in 2018 were made by people over 60. “The introduction of withholding tax has also played a role, with some arguing that 2018 donations will not be tax deductible,” Mr Doug added.

Faced with this unfavourable environment, the department sought to mobilize donors, explaining that despite the fiscal shift, the cause it defends has not diminished in demand.

In the face of this unfavorable situation, the department has sought to mobilize donors, explaining that there will be no blank years for donor-related tax cuts, and that despite the tax shift, the need for defense causes has not diminished. “We also submitted a draft deposit to the government,” Ms Poupon stressed. In early September 2018, it was announced that taxpayers who received a tax credit for their 2017 donations would receive 60% of that tax credit amount in January 2019 as an advance on their 2018 donations. This reassures us that despite the withholding tax, the amount paid in 2018 has been taken into account.

It should be noted that the average drop hides the contrastive results. For example, Apprentis d’Auteuil saw a 19% decrease in public fundraising, while Caritas lamented the 45% decrease. On the other hand, it was stagnant at the Fondation de France, which also excelled in the creation of sanctuary foundations (37 new foundations). At Greenpeace and other environmentalists, donations have increased.

Greenpeace donations increase
The structures most affected are those eligible for IFI grants and utility foundations. “However, even if they do not receive donations from international financial institutions, many associations are indirectly affected, those that receive significant funds from foundations”, says Benoît Miribel of the Centre for Funds and Foundations in France.

Instead, Greenpeace explained its 10% of giving (excluding legacy) and the increase in donor numbers by “mobilizing people for the environment and climate.” Fundraising Director Marie-Eve Lhuillier noted: “We are also not concerned about IFI and are barely affected by the rise in CSG, as seniors don’t weigh as much in our fundraising efforts as elsewhere… Another advantage: 90% of our donations come from direct debit.»

Monthly direct debts are an important tool for players in this industry, allowing them to better forecast earnings. As a result, significant resources are devoted to persuading donors to make long-term commitments, especially in-person fundraising events—streets, malls, festivals, etc.

cryptocurrency donation
Another challenge: updating the donor panel. Gradual changes in collection methods continue as society and technology evolve. On top of that, since the end of 2017, NGOs can raise funds directly on Facebook, thanks to the “donate” button, and users of the social network can organize their own jars in their name. “Generosity must be based on what they are used for,” said Sebastien Lyon, UNICEF Director-General in France. We are therefore looking at all alternative payment methods. »

If the collection, possibly via SMS since 2016, doesn’t live up to the promise, “generousity on board,” especially rounding purchases and salaries, seems more promising. According to Microdon, 2.2 million euros and nearly 1 million euros in wages were collected last year at checkouts in supermarkets and stores. Another new generation of fundraising methods are so-called “free” donations. For example: You agree to see advertisements for watches on the Goodeed website, and the brand agrees to financially support the Restos du Coeur project.

More innovative: UNICEF’s Game Chaingers campaign, launched in early 2018, targeted PC gamers and encouraged them to “mine” the ethereum cryptocurrency (i.e. the blockchain that makes their computers available to verify transactions, in exchange for compensation) and transfer their income to it. Harvest: EUR 30,000. Since September, UNICEF has also accepted donations in nine cryptocurrencies, including bitcoin. “The new approach is currently 2 to 3 percent of our collection,” says Mr Lyon.

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