Legacy giving is where an individual donates part of their estate to charity, via a will or trust.
Leaving a legacy to a charity is a wonderful way to ensure supporters can continue to contribute to a charity’s vital mission beyond their lifetime. Beyond supporting a worthwhile cause, legacy giving passes free of Inheritance Tax which both maximises the impact of the gift to the charity and can potentially enhance the value of the estate for other beneficiaries of a will. For example, where a donation is made, this gift will not count towards the taxable value of the individual’s estate, consequently cutting the Inheritance Tax due.
Legacy income (after inflation) has trebled in value over the past 30 years, being set to reach a record £4 billion per annum and this is expected to grow over the coming decades.
Is legacy fundraising something your charity should be considering more proactively?
Wills
Legacy fundraising can be a delicate subject. You and your trustees must be sensitive to the emotions that talking to people about death, whether this is the individual considering a donation or their family, may raise.
Alongside emotional sensitivity, your charity must demonstrate propriety at all times, particularly with offering suggestions about wills.
The Charity Commission advises that a donor should independently engage solicitors to prepare their will. Your charity may advise that they use a solicitor, but should not be specific. No one connected to your charity should help to prepare a will that includes a donation to your organisation, not even acting as a witness.
However, your charity may wish to contribute to the cost of creating a will if this aligns with your charity aims (for example, helping the terminally ill), or as a fundraising strategy to encourage people to donate in their wills.
Legacy donations can sometimes prove a sticky subject with family and friends of the testator. They may come to you and ask why this donation was made and even dispute it.
Therefore, it’s of vital importance that you mitigate any risk that you might be accused of pressuring the donor to make their gift.
Be transparent and follow the rules.
Baby boomers
The Office of National Statistics said that in 2016 11.8 million (18%) of the population were over 65 and this is expected to rise to 20.4 million in 2066.
The group most likely to be making their wills over the coming years will be baby boomers, those born between 1946 and 1964. They will have been more likely to travel and been exposed to more cultures than previous generations, making their worldview more far reaching. Whilst health and animal charities have always been popular, recent years have also raised awareness of causes such as the environment, healthcare, poverty and mental health.
It’s worth being aware of these giving trends to ensure your charity is an appealing prospect for any potential donor.
Top tips
If your charity is interested in legacy fundraising, we suggest you consider the following strategies:
1. Demonstrate the tangible impact your charity is making, so your donors know where their money is going. Your marketing material should showcase the fantastic work you’re doing and planning to do. This could include case studies, specific statistics and insights into your day-to-day activities.
2. Establish relationships with other community organisations, such as schools, places of worship and solicitors. Collaborating with these people will get your charity’s name out there and you will likely find these partnerships mutually beneficial.
3. Put a face to a name. Your charity representatives should be out in the community, volunteering, campaigning and running fundraising events. People will be keener to donate if they can associate your course with real people, so ensure you’re directly interacting with your (potential) supporters.
Need some guidance?
Burton Sweet has a longstanding commitment to charities and civil society organisations, offering practical, professional and passionate support. We want to assist you, so you can deliver effectively for the communities you serve and show the good you do.
If you would like to discuss any of the topics covered in this article, please contact us and we will be happy to help…
