Tax relief for charity workers

I have always had an issue with the story of the prodigal son. Whilst he got the big welcome and feast, the son who stayed home and did the right thing got little credit. I understood why the father celebrated the return of his son but, for balance, I also wanted there to be a party for the son who stayed.

I have a similar problem with the attitude toward people moving from the private sector into the charitable sphere. We applaud when an industry chief decides to bring their skills to the charitable sector as a Chair or Chief Executive. We also praise those who accumulate wealth in their business years and then decide to become philanthropic and give it away. Obviously, these acts are to be welcomed – I am not quite that curmudgeonly! – and they are certainly much better than not doing anything charitable.

But it does make me wonder why those who have chosen a path of working in the charitable sector from the outset do not get such praise? The wages in charities are generally lower – partly to keep overheads down but also because it is seen as a nice place to work with its own intrinsic rewards of making a difference. (As an aside, I never quite get how working to divert challenging young people from gangs is ‘nice’). Most charity workers are not motivated by their earnings. When you make the leap from for- to non- profit, it is seen. But when you are just working in it, you are below the radar and get no fanfare. And instead of winning praise, if workers move across into the commercial sector, they are accused of selling out.

So I learned with interest the other day that in Australia you get tax relief if you work for a charity.

“If you are classified as a charity, your staff can salary-package up to $30,000 worth of benefits before triggering the Fringe Benefits Tax (FBT).

Charities survive on a shoestring budget which can prevent them from matching the salaries offered by commercial employees. But the FBT breaks allow them to attract good quality staff by offering packages. Effectively, the staff get more for their salary dollar.”

From http://www.ourcommunity.com.au/financial/financial_article.jsp?articleId=2906

So as well as tax relief for charity donations by companies and philanthropists, how about adopting the same for charity workers in the UK? It could kick in after say 3 years and then increase over time as a reward for those who stay. Charity workers opt out of the for profit sector to support others so surely they should be appreciated and applauded?

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