Everyone. The scheme includes individuals, businesses (small & large), trusts and foundations. Donations can be made along with income tax payments whereby individuals can choose to opt out from a default minimum level of 0.7%. Higher-income tax payers would be invited to donate 1% or more of their taxable income and businesses would be required to pay a minimum of 1% of their net profits (when positive), but have the option to pay more. Other methods of payments are through direct payments or as legacies. Donations may also come from people who are not domiciled or resident, and from accumulated wealth, including funds held offshore. All private donations will be matched from governments’ development aid budgets and businesses donations will be matched if over the 1% minimum requirement.
The funding will be channelled through the Real Aid Fund (RAF), which will be set up by a government or the governments’ aid agency. The RAF will then allocate resources to international development causes proposed by credible and trusted organisations, which includes; foundations, trusts, NGOs, international aid agencies, private humanitarian organisations, social businesses and grassroots organisations.
The MM approach is a hand up approach. We believe in investing in the potential of all our fellow humans. Governments’ RAFs’ will invest in scalable and economically empowering programmes to help boost local employment and incomes allowing local communities to work ‘their own way out’ of the reliance on international donors. By tackling the root causes of the issues and addressing them at every level of society; individual, community, infrastructure services and governing policy we can work towards giving people a hand up from poverty.
By improving transparency of aid projects, matching donations to achieve twice the original donation and channelling them through a trusted body we create a multiplier effect. The increase in development aid income (through matching) combined with better evaluation and transparency improves results in project impact, boosting confidence with donors who can see their donations working effectively. This makes it more desirable to donate again, which is in turn matched, and leads to further increases in development aid income. This positive cycle continues, transforming the aid system.
The RAF would be set up as an entity owned by the main government aid agency and will perform as an organ of the government aid agency, primarily acting as the gateway to the private sector. RAF will become a complementary subsidiary of the main government aid agency to improve and communicate its reporting and service new large donations by providing specialist advice and support.
The independent panel would be made up of experts who represent the development, charity, NGO and aid agency sectors. There would also be a chair of the panel which should be an elected post selected by a government appointed select committee.
This donation scheme is intended to be separate from the particular tax arrangements currently in force for charitable contributions. Donations made within the scheme would not qualify for any additional tax relief nor imply tax avoidance. Off-shore funds that are currently not being deployed for charitable purposes could contribute greatly to global development. Tax dodging would not occur as the offshore entities would be abiding by the international tax regulations.
Private philanthropy fosters innovation because philanthropists often take risks, but if things work with great success on a small scale, proven philanthropic results should be scaled up by governments to speed up progress and coordination. To attract foundations and trusts to contribute to the RAF, the RAF should invite them to submit their best funding practices and projects for funding consideration. The recommendations would not take place on the tax return, rather through the ‘Private Sector Office’ who would get in touch to process the donation and instigate the donor cultivation process. We further suggest that an innovation department by set up to consider a variety of these recommendations as well as other emerging innovative models.
The Private Sector Office would act as a gateway to the private sector. Its purpose would be to cultivate private sector relationships and maintain donor relationships in order to optimize their giving levels. This offices main functions would be; reinforcing the donors’ connection to the causes through the dissemination of reports, events, thanking and recognizing major donors and engaging in their funding expertise. It would also be the conduit to pass on funding successes for RAF consideration. By publishing these outputs in the public domain, the RAF will catalyze stronger consensus within philanthropy and government on the most effective options for meeting the challenges of the SDGs.
All funds will have to abide by the tax regulations of the country the RAF is set up in.
Although initially NGOs/ charities may notice a small diversion of funds directly donated to them, this would hopefully be a short experience. We propose that NGOs total income should be at least doubled with as little as 10% of total OECD DAC aid budgets made available for matching NGOs directly to projects intended to help fulfil the SDGs. This would not only counteract any initial loss in funds, it should lead to a substantial increase in the amount of income NGOs currently have.
The government would estimate each year in advance how much of its aid budget it should set aside to be used for matching contributions, this would be capped at somewhat more than the expected level of total matching. Business contributions will be made in the form of a levy, as such they will not require matching funds and are likely to make up a good percentage of additional income, this reduces the amount of matching required.
In order to have a predictable budget, governments should cap total matching contributions that could be made by government at somewhat more than the expected level of total matching. However, funding through the RAF cannot be precisely forecast. In the UK for example, DFID should be able to borrow from the Treasury to deal with any shortfall in the finance of planned expenditures, and would carry forward donations and matching above predicted levels to future years.
One for one matching has a clear and simple effect; it doubles the donation. The general argument that a multiplier should increase donations for development suggests that a bigger multiplier will achieve even more. There is evidence that matching beyond 100% does not elicit larger donations. Additionally if a one for one level of matching was implemented it would make a really positive difference in terms of uptake and for the impact of the scheme.
Donations to global development have a special character. The UN SDGs were developed to replace the UN Millennium Development Goals. These 17 global goals are the world’s most pressing problems covering a range of issues; poverty, health, hunger, education, climate change, gender equality, water, sanitation, energy, environment and social justice. The RAF aims to create a multiplier effect to people’s donations for development causes and in the development context, matching should have a greater effect than in other areas. Although there are many charitable issues that deserve additional funding the UN SDGs are the world’s principal development targets which aim to transform our world and lift billions out of poverty, creating a sustainable development plan for all human life, enabling the future we want to live in.
The MM Model is a roadmap for Governments to adopt and adapt any or all of the Model’s tenets on their own accord. For example, Our pivotal influence on the genesis of UK Aid Match has spawned more than £200m of funding for trusted charities which is on its way to impacting nearly 100 million lives across the globe. The MM Aid Model core ideas that have been taken up by DFID include; a) For Government to utilise its aid budget to match and therefore galvanise private sector overseas donations (from individuals, corporates and foundations b) To set up a ‘Private Sector’ office to optimise (and service) sizable donations, also for defined initiatives. Our other recommendations taken up include the setting up an Independent Audit of Aid and a Global Innovation Fund. These concepts have been developed and adapted by the UK Department for International Development (DFID) whereby the UK Government matches charity appeals through their formation of UK Aid Match. The long term goal is, with our collective efforts, to have the majority of the richer countries sign on and be rolled out globally to harness the Model’s full global potential of unleashing $100bn for development.
The donations form should also offer the opportunity to donate shares and other assets to the RAF; these also attract matching at their fairly calculated value, and, as now, not to be subject to capital gains tax.
No. The opportunity to contribute donations to the fund certainly does not make evasion safer or easier. It may ease the donor’s conscience, but it is hard to believe it would affect his decisions to report income to the tax authorities.
Nothing in our proposals affects the ability of the collecting authorities to scrutinise off shore funds.
For the sake of minimising administration costs, we propose that there should be a minimum level of donation for individuals, of £10 a month or roughly US $15
Governments largely respond to strong public opinion - If you take action by joining the MM model campaign, signing our petition and campaigning locally, you can help influence all of the richer OECD Nations to take on the MM Aid Model, this could bring in around $100bn that can be invested in those who need it most, so they can take charge of their own lives.
Although we do donate a portion of our taxes to development issues through government bodies it is not nearly enough. By donating to the RAF we are directly increasing the money available for NGOs who work on the ground with a proven track record of providing the most effective and accountable aid. Children and adults are without; education, food, water, sanitation, security, resulting in death and suffering from entirely preventable causes and as such we have an obligation to help our fellow humans. However, if individuals feel they do not wish to donate to the RAF there is an opt out feature that will enable them to stop their donations.
An estimated 705 million people, or roughly 10 percent of the world’s population, lived in extreme poverty in 2015. This is still a massive portion of the global population. Whilst we recognize that there is relative poverty in developed parts of the world as well, poverty in the developing countries is generally far more substantial than anything seen in most wealthy societies. We must help our human counterparts around the world, it is our duty as developed nations to lend a helping hand to those who need it, to help lift the millions of people suffering for a daily existence a hand up out of poverty for good.
Unfortunately, it is possible that corrupt offshore money could be used in the RAF. But at least these ill-gotten gains would be used for a worthwhile cause.
Spending money on aid is proven to directly benefit the giver of the aid, as we improve the living standards of people around the world they are more able to contribute to the global economy, this in turn provides a direct benefit to the aid giver. An example of this can be seen with the UK, in 2014 a report carried out by the Overseas Development Institute (ODI), showed that the UK spent £3.7 billion ($5.9 billion) in direct bilateral aid, increasing UK exports by almost £810 million ($1.3bn). Or put another way, £1 of direct bilateral aid leads to a £0.22 increase in UK exports. This in turn created up to 12,000 jobs in the UK.
There are many reasons that tying aid is a bad idea. It increases the cost of many goods and services by between 15-30%, increases administration costs, subsidizes jobs in the donor countries and creates fierce competition for securing donor contracts. By exclusively allowing aid contracts to be won by donor contractors it prevents firms and consultants in developing countries from competing, this prevents them from having the opportunity to work themselves out of poverty. Using local contractors would enable local businesses to benefit; the income raised would be put back into the local economy, which would in turn create more jobs and so on. Although it may seem beneficial for the donor country to tie their aid it makes aid inefficient, wastes large sums of money and in the long term makes developing countries dependent on them. By untying aid projects the contracts would be carried out by the most suitable party, limit wastage and providing the best possible service, benefiting the people who need it most, instead of a corporate few.
There is an additional level of monitoring that will be undertaken by the RAF as it will be evaluating projects performance and reporting this to donors. Whilst we recognize that this will be an additional cost it is of utmost importance as direct monitoring and reporting will limit the scope for corruption and provide donor confidence in the aid projects. The administration of the RAF will be paid for out of its income, but only a small proportion would be needed. There should also be a proportionate reduction in monies spent on monitoring and evaluation by those implementing the work compensating for the initial outlay on RAF scrutiny.
Social businesses would be under the same process of evaluation as NGO projects, aid agencies, foundations and trusts. As such the social business would only receive funding from the RAF based on the impact the project was making relative to the costs of running it. This would remove any project that is carrying out wasteful practices such as overly high salaries for social business CEOs or management and limit the scope for corruption as corrupt projects would be inefficient and recognizable as such, therefore their funding would be removed until these wasteful practices have been stopped.
Charities and NGOs would be invited to bid for funding on the basis of performance whether by long term or short term indicators. Performance would be defined by a “results-based” criterion whereby proven and exceptional results would attract increased levels support. We further propose that the fund would identify the latest innovations in development practices. One way would be to distribute some funds to smaller pioneering organizations, so as to scale up excellent local initiatives.

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