Fall in charity legacy values softened by rise in number of legators

Fall in charity legacy values softened by rise in number of legators

News (UK)

New research has revealed that the value of legacy giving to charities fell by an estimated £57m in 2009 compared to the previous year, a 3% drop, despite an 8% rise in the number of people leaving money to charity in their wills in the same period.

The Legacy of the Recession, published last week by the Centre for Charitable Giving and Philanthropy (CGAP) at Cass Business School, and charity consortium Remember A Charity, bases the £57m figure on a £24m drop in value experienced by the  20 largest legacy receivers it surveyed. Legacy giving contributed £1.9bn to the total £9.9bn of individual charitable giving in 2008-09.

Dr Beth Breeze, author of the Coutts Million Pound Donors Reports, notes that the value of legacy income has held up well compared to other sources of charitable income. "Last year we found a 13% drop in the total value of donations worth £1 million or more, and the UK Giving survey found an 11% drop in the value of all charitable giving. Whilst any decline in any source of revenue is clearly an unwelcome development, it could be argued that legacies have proved more robust in the face of the recessionary impact."

Report author professor Cathy Pharaoh, co-director of CGAP, told Philanthropy UK that the fall was a further blow to the sector at a time when it is bracing itself for the effects of public spending cuts. “It is worrying that we may be seeing charities hit by a double whammy,” she said, “the combination of falling legacy values and public spending cuts, particularly on local authority budgets where a lot of charity funding comes from, could squeeze charities hard. I think there is going to be increasing competition for diminishing resources.

“While we have seen a huge increase in legacy values in the past decade, driven by increasing asset prices, people who are in a position to give may be taking a conservative approach as the recession has created a general feeling of insecurity.


“I think we are unlikely to see an improvement in legacy values this year and it may well be the end of 2011 before things get better,” she added. “I do think that charities could do more to attract legacies – they need to persuade life-time givers that even relatively small amounts left in legacies are very worthwhile.”

Stephen George, chair of Remember A Charity and development director for legacies at NSPCC, agreed that falling property and asset prices were to blame for the drop in legacy value. This was also highlighted in a study by research group Legacy Foresight last year that showed the number of legacy gifts to charities had increased by more than 8% in the previous two years.

He too called for charities to put more work into attracting legacies. “Around 74% of people give to charities in their lifetime,” George told Philanthropy UK, “but only 7% say they will leave a legacy to charity. We need to work on changing that so that leaving something in your will becomes the norm. We believe that a strong marketing effort now will really pay dividends in the future especially as members of the baby-boom generation, those in their 40s and 50s now, grow older.

“Our marketing message recognises that people will put their families and friends first but emphasises that the choice to leave something to charity is not an ‘either or’ one - you can do both.”


Some charities fared better than others in the legacy income top 20. Cancer Research UK and Macmillan Cancer Support saw legacy giving increase in 2008-09 from £147.9m to £156.7m and £40.9m to £45.4m respectively. The National Trust saw the largest drop in legacy income in the same period, from £57.8m to £42.8m. Barnardo’s also saw a drop, from £24.3m to £22.7m.
 

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