Forward thinking: Legacy giving in and beyond COVID-19
Legacy giving. It might not be the most glamorous subject, but there’s real potential in the power of a well-tuned programme. Building on several years of strong growth, in 2017/18 Smee & Ford reported legacy gifts topping £3 billion for the first time – with much room for growth (in fact, in their 2019 report, it was estimated that legacy giving could be worth another £10.9 billion to the sector). The picture changed a bit this last year, with the value of legacy giving dropping for the first time since 2011. But that doesn’t mean there isn’t room for growth. After all, legacy giving has always been about the long game!
What happened when coronavirus hit?
A legacy giving programme takes years to cultivate, but that doesn’t mean it isn’t immune to short term challenges. Far from it. With 90% of legacies a residual process (a percentage of total estate value, rather than a fixed sum) the final gift is often linked to core economic drivers - namely house prices, share prices and GDP growth rates (thanks for the insight, Smee & Ford).
Unfortunately, these have all been hit by COVID-19. So has the value of legacy gifts made in this period. Beyond the direct economic drivers, Legacy Foresight also see the pandemic impacting legacy giving in two other ways. The first is death rates. Sadly, the current situation has already seen the UK’s average number of annual deaths rise. This surge of premature deaths is likely to see long-term averages (and legacy gift numbers) fall. In addition, the economic climate could see the sale of estate assets slow, and the processing of legacy donations delayed. In all, their team believe that this situation could see legacy income drop between 3-9% in 2020.
Short-term loss could be mitigated by long-term growth
It might sound disastrous, but if you’re planning for the long-term (and you should be) there are those who believe this loss is likely to be short-lived. In their March 2020 update, Legacy Foresight projected a rise in legacy income to £3.67-£3.82 billion by 2024. Not a bad recovery, by any stretch.
Of course it is impossible to know for sure, and the state of the UK economy now and post-Brexit makes the crystal ball hard to read. But take some reassurance from these predictions. Public awareness around legacy giving is growing, and for the most part, historic trends have been strong. Growth potential is still there. The question is, how to unlock it?
Using data to unlock the future of legacy giving
The external environment might be out of your control, but that doesn’t mean you don’t have a stake in the process. As with so many areas of fundraising, it starts with data. According to Smee & Ford, 60% of legators are female. They wrote their last will at the age of 80, and there is an average of 6.7 years between this and the final gift, with bequests left to three different charitable organisations. It’s an intriguing picture, and one that is useful to know. But try not to base your fundraising strategy on sectoral averages alone. Why? Because what is typical for one charity will not be typical for another. It is always better to make data driven decisions if you can. As Smee & Ford point out, to build a successful legacy giving programme, you need to:
- Define your own legator: Look back at the history of legacy gifts at your organisation. What can you learn about the demographics of your charity donors? Who are they, where do they live, and why do they give? Answering these questions is the first step to identifying, segmenting and cultivating relationships with new legacy givers.
- Get to know their giving history: Most legacy donors are likely to be long-term supporters of your cause. But not everyone is. Look at the giving levels and history of your legators. Can you pin-point the type of donor that is most likely to consider a legacy donation? (And if they’ve come to you out of the blue, is there a pool of potential regular donors you aren’t tapping?).
- Understand the time-lag between pledge and donation: One of the biggest problems with legacy giving is the issue of immediacy. There can be many years, even a decade, between pledge and donation. Can you find out when your donors wrote their will and how many years passed before their final gift came through? This will help you design your legacy giving strategy and project long-term ROIs.
A charity CRM like Access thankQ can help you explore your legacy giving data. But what do you do if your charity doesn’t have the information it needs? Do not despair. Why not connect with other charities of a similar nature and size, and suggest a skills share or exchange?
The above might seem like obvious points, but they’re important. Information is gold. Not only can you use it to identify potential donors, it is the foundation of your stewardship plan, tailored donor communications, and broader charity fundraising campaigns. Yes, it will take time to see the fruits of your labour. But that doesn’t mean it isn’t working.
To build a successful legacy giving programme, you need to monitor response and engagement to each and every stewardship/campaign mechanism you deploy. It doesn’t matter if you can’t count success in money just yet. Think clicks, web traffic, enquiries, conversations and even pledges. They are all important indicators of future success. So set your KPIs and track them closely. Learn from your data, and use this information to adapt and evolve your legacy giving strategy.
And remember. Data might be your starting point, but it is the relationships with your charity donors that will bring your legacy giving programme to life. Get the balance right, and there is no reason why you can’t make your charity one to remember. Even in a post-pandemic world!
