Managing the potential of legacies
Over the past year, the number of charitable gifts listed in wills has hit its highest level since 2012. With lots of charities relying on these generous donations, legacy donations can make a significant difference to a charity’s operations.
For charities which do rely on receiving legacy donations, planning future income can prove to be difficult and unpredictable, so it is imperative that efforts are made to stay engaged with those who make a pledge – after all, some time could go by between them promising the money and the charity receiving it.
Charities can address this by ensuring they have a secure legacy fundraising programme in place, particularly during an uncertain market, to help accurately forecast their income and demonstrate just how impactful legacy donations can be.
Rise in popularity
While it's common to leave assets to friends and family when creating a will, more people are leaving money to causes they are passionate about or have had an impact on their lives.
For people who have dedicated a lot of their time to volunteering, donating and raising awareness of different causes, leaving a pledge to a charity in their will is the perfect way to make a lasting impact on society, and they themselves should be regarded as an important source of legacy giving. However charities often aren’t aware they will receive these legacy donations until they are informed by solicitors following someone’s death.
A recent survey showed that 64% of future legacy donors had not let charities know they have included a donation to them in their will, with 47% of those saying it never occurred to them and 25% saying they could not see how it would help.
This shows that charities may need to engage more, highlighting the importance of how being informed would help them to more accurately forecast the resources for future plans.
With the average age to write a will currently standing at 51 years-old, and life expectancy growing to between 79 and 83, it could take at least 25 years for charities to find out they could be gifted a potentially large sum of money.
It’s not just the will owner who should be communicating with the charity that they intend to leave a legacy donation, but it should also be the role of executors and solicitors, with the agreement of the will owner, to ensure that charities are aware in good time
By being informed about this future donation, charities have the opportunity to plan future projects such as fundraising events or activities, put aside some money for any maintenance costs or hold off applying for Government grants. It provides a sense of security for charities which might be cautious of spending if there isn’t a continuous flow of donations.
Better understanding
Although the majority of those creating a will are over 50 years-old, there is still a small percentage of younger people already thinking about who to leave their assets to. With just 3% of millennials – those aged 26 to 40 – already deciding which charities they want to support after their death, there is a huge opportunity for charities to begin engaging with younger generations and building up a relationship with them to help secure future support from them.
In recent years, especially since the pandemic and the cost of living crisis, parts of the charity sector have seen a huge boost in support including homeless and mental health charities. By understanding what different groups of people feel most passionate about, charities can tailor their legacy messaging and engagement accordingly, such as through social media platforms and newsletters.
The same can be said as charities engage with existing donors to ensure they are still receiving a regular flow of income, they should also be slotting in the legacy message. Also, during corporate partnerships, which tend to last for a fixed period, even if extended, interface with volunteers or participants from workforces during the duration should be used in an appropriate manner to get the legacy message across.
Clear evidence
Legacy monitoring, quite apart from its important function for marketing research purposes, can also provide clear evidence for charities to demonstrate from previous donations to potential donors how much impact these pledges can really make. If charities can show people who are thinking about including a gift in their will how easily they can forecast what could potentially be achieved, hopefully more people will be encouraged to consider legacy donations.
Building these relationships and making sure people have the correct understanding of legacy donations, may encourage more discussions in the beginning with the main beneficiaries in wills who may not otherwise have been aware of their loved one’s pledge, and therefore reducing the potential for dispute once the contents of the will are revealed.
END OF ARTICLE