Charities making the most of legacy giving
More and more people are choosing to leave a gift to charity. These gifts in wills enable charities to plan longer term and to widen their impact. Understanding what motivates these kinds of gifts is key to encouraging more people to do the same.
We are entering a period of change in terms of how we give to charity. The pandemic, a cost of living crisis and political turmoil have caused people to tighten their belts and posed a question mark over the income stream of donations to charities of all sizes. Research suggests that more than six in ten Brits have cancelled or cut down on monthly charitable giving since the cost of living crisis began.
Yet, at the same time, these worldwide events have heightened the importance of helping others throughout these financially and emotionally turbulent times. Even with personal budgets getting smaller and regular streams of donations wavering, there is still a growing trend of legacy donations.
According to Legacy Futures, legacy incomes have quadrupled in value over the past thirty years, and this is only expected to rise.
The great wealth transfer
On a larger scale, we are also entering the throws of the great wealth transfer. According to Cerulli Associates in the US, $84 trillion will be transferred from the silent generation of Americans (78 to 96 years old in 2024) to Millennial and Gen-Z family members in the next 20 years.
As they have been doing for years, wealthy individuals are weighing up legacies, tax benefits and trust formations, considering what they want to leave behind. Only now, the stakes are higher. There is not only more money being transferred, but amidst a backdrop of emerging corporate consciousness, increasing numbers of high net worth individuals are also looking to shape a legacy that goes beyond their immediate family to the charities and causes they love.
However, this isn’t only a question for the ultra-wealthy. Individuals from every background are increasingly considering their charitable legacy. Granted, this is a lot easier without Succession levels of planning drama. However, the trend is gaining momentum among the general UK population.
Charities have a unique opportunity to capture this wave of legacy givers by educating them about the benefits and impact of these gifts. This requires internal buy-in and support so that they can encourage and support this type of income. Charities which take this moment to invest in legacy giving will reap the rewards.
Maximising legacy gifting benefits
Legacy giving is a longer term play. It won’t solve charities' immediate fundraising needs, but it will allow them to plan for the longer term, taking on bigger projects and scaling their impact. Investing in this framework now will ensure you enjoy the benefits further down the line.
According to Legacy Futures, the top 10 legacy charities in England and Wales currently account for over 24% of all legacy income, and these include household brands such as CRUK, RNLI, BHF and Macmillan. Meanwhile, the top 1,000 charities in England and Wales account for over 73% of all legacy income.
There is work to be done by charities of all sizes to ensure they are also getting a slice of the giving pie. When it comes to causes, certain sectors are outpacing others:
- Health charities take by far the largest sector, accounting for 41% of legacy income.
- Followed by animal charities (15%).
- Conservation (7%).
- Development (7%).
- Disability (6%).
- Armed forces and children’s charities (each represent around 3%).
The sizeable “other” sector category (18%) includes legacy-pulling brands such as RNLI and the Salvation Army, as well as large player Age UK. In this portion, you also find a host of much smaller organisations from various sectors, such as churches, schools and arts organisations.
Free wills campaigns
For charities, taking part in the bi-annual national free wills campaigns is a great way to engage in the legacy giving conversation actively. For two months each year, charities can ensure they are at the forefront of supporters and potential prospects' minds when looking to include a gift in their wills.
The shift in giving offers opportunities for charities of all sizes to enhance their long term financial stability. Unlocking the full potential of this movement hinges on a strong focus on two key areas: education and engagement.
Educating potential donors
The first and most important step in any legacy giving programme is education. Potential donors need to be made aware that they can include a charity in their will, or they may need to understand the tax benefits and impact of such a gift.
Free wills campaigns give charities the tools to educate and engage their supporters with ready to use assets and content toolkits, tailored to both existing supporters and new potential prospects. On websites and other channels charities can really get their message over by spotlighting case studies and the impact of legacy gifts. As part of a campaign, supporters could be educated not just on the impact of legacy giving, but also about will writing, simplifying the process so that they feel empowered to make decisions.
Legacy messaging lands best when charities wrap their legacy gifting messages into their wider programmes and create a cohesive narrative that can be easily understood without scaring potential supporters off.
While it is often easier said than done, there are several ways charities can begin drip-feeding educational messaging to their audiences:
DEFINE THE IMPACT OF A LEGACY GIFT. It’s essential to communicate the difference a legacy gift can make. Using powerful stories and case studies to show how previous legacy donations have helped fund important initiatives can be a useful tool. Donors need to understand the why behind legacy giving and how it can create a lasting change.
SIMPLIFY THE WILL WRITING PROCESS. For many, the concept of leaving a gift in a will can seem complex or intimidating, but producing simple guides can help to demonstrate that it doesn't need to be. Charities can do three key things to simplify this process:
PROVIDE EASY TO USE FREE WILL WRITING GUIDES. These can help supporters who are considering including a gift in their will to your charity to learn more. Your guide can introduce the benefits of including a gift to charity covering the potential impact for your charity, and the benefits to donors, from the emotional to the tax advantages - as well as giving donors a sense for what to expect from the will writing process with your charity.
OFFER A CHOICE OF WILL WRITING OPTIONS. Your supporters will value choice. Giving them the ability to write their will online, over the phone or in person allows you to reach the maximum possible audience. This includes offering access to crucial services like urgent wills which can have huge emotional as well as practical value for your supporters.
CONSIDER YOUR CUSTOMER JOURNEY. By considering where your supporter is on their pre-will writing decision journey you can tailor your messaging to maximise impact. For example, if someone is new to your charity, or is only hearing in legacy marketing from you for the first time you might choose to direct them to your free will guide, which offers a lower bar to entry and leads with education.
Charities can also streamline donor journeys to drive colder audiences who are still learning about legacy gifting to free will guides and also drive warmer audiences directly to the charity’s free will partner. This ensures that the journey and communication are tailored, minimising drop-off and maximising engagement.
An extended approach to engagement
To support wider education efforts, trustees should focus on raising awareness about their charity and how the income generated through legacy gifting is crucial for its success. Since legacy gifts are not immediate, it’s critical to build strong, lasting relationships with supporters over time. Those who choose to leave a legacy gift are often deeply committed to your mission, so it’s important to honour and recognise their commitment during their lifetime.
By testing different types of messaging charities will quickly learn what resonates with different types of audiences. Is the message driving action? Is it driving pledges? Is it driving the kind of pledges you’re looking for? Getting charities to evaluate what is currently used to engage with supporters can be the difference between a successful campaign and a missed opportunity.
Legacy gifts often come from routine charity supporters. Therefore, beyond the initial gift, it's essential to cultivate and nurture these relationships. Recognising and appreciating donors is crucial and helps to build a strong sense of community. A simple, heartfelt thank you note can go a long way.
Inviting donors to exclusive events or offering them a place in a "Legacy Society" can further strengthen the bond. By fostering these connections, charities can inspire continued support and create a legacy of giving. When handled in the right way, these donors may also contribute to case studies, which are often the most powerful ways of bringing your legacy proposition to life, engaging future pledgers to include a gift in their will.
Embracing the groundswell
No transition is seamless, and this doesn’t mean to say that current fundraising and charity events do not remain a vital part of charitable income. However, trustees are missing a trick if they are not investing in legacy fundraising for the growing number of people who are open to using it.
Charities looking to focus their legacy efforts should do so in spring and autumn around the national free wills month, benefiting from the ever-growing education and awareness that comes from these campaigns.
Engaging in educational campaigns or free wills month offers will provide not only a direct free will call to action but the ability to scale your legacy marketing effortlessly through a tailored campaign with creative assets, content toolkits, and give you access to new and existing partners.
With these toolkits in place, the education and free will offers can be drip-fed through regular communications. Education and awareness won’t happen overnight, but charities investing in their legacy fundraising will harvest the benefits for years to come.
