Analysing performance data from groups of charities to provide a timely snapshot of the latest trends

Latest brexit arrangements will see a return to growth for legacy incomes

The UK legacy market will grow by nearly £600 million over the next five years, according to our latest market forecasts. This follows a 2% drop in income in 2018; the first decline in seven years. The new analysis is based on this week’s decisions to extend the Brexit deadline to 31st January 2020 and to hold a general election on 12th December 2019.

We predict that UK charity donations in wills will grow from £3.2 billion in 2019 to £3.8 billion in 2024. Growth rates over the five years will average 3.3% per year – similar to those seen in the aftermath of the Brexit referendum in June 2016, but slower than the pre-referendum period, when annual growth was 4.1% per year.

We expect 2020 to remain relatively subdued, with annual income growth of around 2%. However, the period 2021-2024 is expected to see stronger growth in key economic variables, which combined with an underlying rise in the number of deaths, will generate legacy income growth of nearly 4% per annum.

We should highlight that, although latest developments are in line with our core scenarios for legacy income, there still remains significant risks relating to the outcome of the general election, along with global trade tensions and geopolitical pressures. In today’s uncertain times, it is vital to continue to monitor developments in the wider economy and consider the impact that they could have on the value of gifts left to charity.

Our last quarterly report from Legacy Monitor showed that delays at HMCTS caused by the introduction of the new structure and processes had affected bequest figures.

Based on estimations by the Probate Registry that the backlog would be cleared by the end of August, we expected that bequest numbers would ‘return to normal’ for Q3 2019. However, this has not yet happened; we’ve analysed the latest bequest figures for 19 of our 20 largest Consortium charities, and they received 9% fewer bequests year on year.

The lower number of deaths in early 2019 compared to early 2018 is the one important reason for the anticipated year-on-year decline, but based on our modelling for Legacy Monitor, it shows that probate delays reduced bequest numbers by 6%.

Better news for Q4?

The Institute for Legacy Management (ILM) expect the situation to improve in Q4 2019. On 15th October commenting that “service levels [at the Probate Registry] are returning to (and in some cases improving on) the situation prior to April. … the backlog is starting to be cleared, and you should start to see notification numbers rise over the next few weeks. This information has come from third parties as well as HMCTS and leads us to believe that the backlog will be cleared by Christmas and quite possibly by the end of November.”
If this happens, charities can expect a significant boost to bequest numbers in Q4 2019, to compensate for the shortfall in bequests experienced this year. For Legacy Monitor Consortium members, this increase looks to be substantial; we estimate around 24% higher in October to December than would otherwise have been the case.
As ever, we’ll continue to monitor the situation closely. Keep in touch for updates.

The latest results from the Legacy Monitor are in!

Legacy income up…
Despite the acute uncertainty we face because of Brexit, our 80 Legacy Monitor members’ saw their legacy income grow by 4.3% to £1.54bn in the past 12 months. This strong growth is surprising given the recent slowdown in key economic variables; which saw house prices grow by just 1.5% p.a. in the first quarter of 2019 while share prices are lower than they were a year ago. We believe that some substantial bequests reported by some members have driven this growth.

…while bequest numbers fall
We’ve seen a fall in bequest notifications, which are down across the consortium by 7%. We believe that much of this drop is due to delays at the probate registries, caused by the introduction of new structure and processes. Providing that these delays are caught up, charities should see their bequest figures back to ‘normal’ by the time of our next bulletin, so watch this space.

For further analysis, you can download the Legacy Bulletin. You can also keep up to date with legacy market news and trends by subscribing to our newsletter.

It’s that time of the year again when we’re starting to think about next year’s Legacy Monitor consortium – how time flies! This year we’re starting the process earlier to coincide more effectively with everyone’s planning and budgeting cycles. We are pleased to be able to announce one new member for 2020; Action on Hearing Loss, who work on behalf of the UK’s 9 million people who are deaf or have hearing loss. Action on Hearing Loss (then RNID) were involved in our very first legacy forecasting project 25 years ago, so it’s great to have them back on board.

If you know any charity that would or should like to join the consortium, please let us know. For those of you that might be considering leaving the programme (perish the thought), please let us know by the end of September; we will, of course, send out a formal reminder beforehand.

We now have a date in the diary: 2nd October, for our annual market review presentation. This is a great time for all consortium members to come together for an afternoon to discuss economic, social and competitive factors driving the legacy sector. We will be sending out invites in due course and look forward to seeing as many of you as possible.

Legacy Journey has been live for three months now, and we’re starting to see a wide range of communications across the different legacy segments. It’s fascinating to see what all our consortium members are sending out.

We will be uploading response rates from the communications shortly, and, because we are recording all multi variants – including in one case, an email with two different case studies and three creatives each! – we should start to get a good initial picture of what’s working well. This detail will help us to understand where we would like to get to on measuring the ‘immeasurable’ and defining what an effective stewardship programme is.

Understanding good stewardship and how to apply it to an engaging and inspiring supporter journey is vital, but challenging to do. Legacy Journey sets out to help you answer these questions and ultimately improve the chances of a supporter leaving a gift in their will. Of course, the more members we have, the more insight we can generate.

If you are interested in joining the programme in the first year on a pro-rata basis, please get in touch with Richard Hill.

In an increasingly challenging fundraising environment, legacy giving remains a vital source of voluntary income. As the legacy giving sector continues to grow, we are seeing a more diverse range of charities receiving legacy gifts each year – no longer the sole benefit of a few large, long-established charities. Coupled with consumer facing awareness raising campaigns led by Remember a Charity, charities are speaking to their donors in higher numbers and more frequently about legacy giving than ever before. And, as the legacy market continues to grow, it is becoming increasingly complex and competitive, as charities vie for the attention of potential future legacy donors.

We know that measuring and evaluating legacy marketing activities can be challenging. A lack of consistency, both within individual charities and as a wider sector, makes it difficult to evidence a causal link between what is spent on legacy marketing, and the legacy income received as a result. This is why we launched our Legacy Marketing Benchmarks programme, most recently working with a consortium of 36 major charities in 2017, to analyse and compare their investment in legacy fundraising.

Based on the 2017 project, we were able to estimate that the top 100 charities alone invested £25m into legacy fundraising initiatives, employing over 450 legacy marketing and administration staff, and attracting 200,000 new prospects and pledgers.

New for 2019

Based on client feedback and learnings from past projects, for 2019 we are going to be looking at;

• Detailed benchmark data of current activity, to compare and contrast the ways charities are investing in legacy marketing activities, determining the scale, how effective they are in generating a ‘response’ and how investment is changing over time
• The amount of legacy income generated as a direct result of an increase in legacy marketing activity and the time profile over which a charity will receive that additional income
• Legacy stewardship and will-writing initiatives in more detail

We pleased to be working on this with legacy marketing specialists Legacy Voice. Our teams have collaborated closely in the past, including the two previous Legacy Marketing Benchmarks projects and last year’s Understanding Legacy Stewardship research. We believe that by working together we can provide robust analysis and astute interpretation of the findings, leading to conclusions that are both practical and strategic.

If you’d like to find out more about the project and how you can get involved, download the brochure here or contact Kath Horsley for more information.

In the 12 months to March 2019, our 80 Legacy Monitor members received £1.52bn in legacy income, representing 1.8% growth on the previous year.

However, legacy income has been slowing since 2013, thanks mainly to the deteriorating economy and falling house prices. The number of bequests has also largely remained flat.

Download the latest Legacy Bulletin for more analysis.

Legacy Monitor Netherlands 2019 has kicked off with 4 new charity members: Alzheimer Nederland, IFAW, Nationaal Ouderenfonds and Plan Nederland.

Between them, this year’s 19 consortium members represent almost half of the top 100 Dutch legacy charities’ combined legacy income.

This year’s programme will continue to analyse performance and marketing benchmarks, update our Dutch legacy market forecasts and carry out new research into legacy donors’ motivations and attitudes.

Legacies have become a very important source of income for Dutch charitable organisations. In 2016 the hundred largest legacy charities received €311 million through wills, representing 27% of all fundraised income, compared to just 21% in 2005. Faster growth is predicted for the next ten years, averaging 3.8% p.a. Over that period the number of Dutch deaths is predicted to increase by 1.1% per year; house prices are expected to rise by 3.9% per year and share prices by 3.3% per year.

Arjen van Ketel, programme manager of Legacy Monitor Netherlands said “We’re delighted to welcome our new charities on board. As the consortium has reached this large number of participants, we can collect and benchmark data from a very robust sample and make  comparisons between sectors. We can also conduct more consumer research and explore issues such as the growth of will-making, the behaviour and perceptions of Dutch baby boomers and the “invisible” legators who exist both inside and beyond a charity’s database”.

What’s new this year?

The Legacy Foresight Netherlands team is planning a new research project on the Dutch ‘invisible legator’ – the 46% of legators who were apparently unknown to the charity before they died. The project will build on the widely reported British Invisible Legator project carried out in 2017, using an in-depth survey of 500+ Dutch legacy donors.

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