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Will Wars or Legacy explosion?

 

A summary of this article was published in Fundraising magazine this month

The legacy feature in last month’s Fundraising magazine was great and showed that year on year legacy income is growing.

However, I found the title of “Will Wars” and “Still Battles to be done” infuriating.

We are witnessing a celebratory legacy explosion which is incredibly exciting and positive.      

The matter of increased diversity in charity beneficiaries is a fascinating one. The vast majority of people I met in focus groups five years ago had included Cancer Research UK, RNLI, British Heart Foundation and other leading brands. Those I meet today are very different. In fact it is hard to find many who keep to the traditional causes.

You rightly point out the arts as a growing sector – with current older donors this sector is rocketing in legacy popularity and is based on donors saying “thank you for making my retirement such fun“. The other sector which I witness to be going through the roof is the education sector which is the “thank you legacy for making me who I am“.

Both of these motivations are joyful and celebrating a beneficial experience.

But there are three further crucial issues.

Firstly, legacies are increasingly being put into letters of wishes because older generations are experiencing increased financial uncertainty (care costs, university fees of grandchildren and fragmented families needing support). Thee financial uncertainties are prolonged through many yers of retirement.

These letters of wishes are not seen by Smee & Ford because they are not filed with the grant of probate. Some charities register these as in-mem donations which in my view is incorrect. S & F data is awesome and unique in the world, so I believe the only weakness is that they under-state legacy income.

Secondly “new generation” legators and prospects, who are baby boomers, are savvy financially astute prospects looking for a great performance from their charity. If the charity lets them down in any way the legacy is out.  This is what we call the Hokey Cokey legacy syndrome which is rampant amongst bright thinking baby boomers. In fact their profile has little in common with past legator profiles. This also means that increasingly you cannot predict the future by looking at the past.

You put your legacy in
Your legacy out
In, out, in, out
Shake it all about.
You do the hokey-cokey
And you change your mind.
That’s what it’s all about

Thirdly the information needed by these current prospects is based on whether a legacy is a good investment and that information is being found through the Internet (charity websites and the Charity Commission). What effect does this have? It seems that donors are increasingly supporting niche players – i.e. charities specialising in research or welfare for specific cancers, rather than the big players. The two reasons in focus groups which are given are:

“I can make a bigger impact”

“Every £ in my legacy goes further” 

Previous generations hardly bothered researching anything at all – they just had a nice feeling about a charity and into a Will it popped; simple.

There is also a related issue and that is: the incredibly rapid changes in donor behaviour. Since July 2015 there has been a real intake of breath within donors’ brains producing a quite severe rationalisation of charities they are going to continue to support. Most donors I meet are giving up spontaneous giving and becoming far more focused and thoughtful. Every focus group I hold at the moment I hear donors saying “well, I have cut back on the number of charities I support, but I have not cut back my giving”.

If there is one great outcome since media attack on charities 15 months ago it is this: people are caring much more about how they give and who they give to. But was it really necessary to use a sledgehammer to crack the regulatory nut? No. British donors are taking their own action.

 

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