Legacy Monitor Netherlands has been analysing the Dutch legacy market since 2014. Twenty-three charities are members, representing almost 50% of the legacy income of the top 100 Dutch legacy charities. Having started with just eight charities, the growth reflects the increasing importance of legacies for Dutch charities and the value they place on assessing and benchmarking their performance, as well as on sharing ideas and experience.
We want to thank our Dutch charity clients for taking part and for sharing these key findings from their annual snapshot, more widely with the sector.
Legacy income continues to grow
Legacy income has grown steadily over the last ten years. Across the top 100 legacy charities, legacy income totals €305m (£280m) and accounts for 11% of total income. Legacies share of total fundraising income is also increasing and now stands at an average of 25% for the top 100 organisations.
There is still a way to go to reach the maturity of the UK market where, across the top 100 legacy charities, gifts in wills account for 20% of total income and 37% of fundraised income.
Although there has been growth across all sectors in recent years, the share of the Arts, Culture and Science sector is increasing, as is the case in the UK. Faith-based charities are declining and are expected to decrease further in the future when baby boomers become the main legators.
Whilst it is older charities that receive more legacy income on average, legacy income from the younger organisations is growing fastest. This is even though – as yet – far fewer people are dying from within their younger supporter groups. Similarly, in the UK, it is newer, smaller and often local charities, such as air ambulances, hospitals and wildlife trusts, that are showing the fastest growth.
The benchmarking provides a wealth of insight into the similarities and differences in income across the member charities. For example, the average value varies greatly across Dutch charities; in 2019, average pecuniary values ranged from €7,000 to €24,000, whilst average residual bequests ranged from €30,000 to over €150,000. This information provides an essential benchmark for each organisation to factor into their marketing strategies.
Coronavirus and the future
Legacy Foresight’s forecasting model reveals the different impacts of the pandemic on legacies, through both direct demographic effects and economic impacts.
Legacies will continue to grow significantly over the next decade; legacy income for Dutch charities is set to increase with average annual growth over the next ten years of between 2.3% p.a. and 3.3% p.a.
The Netherlands is less impacted economically than the UK, which also has Brexit to contend with. Notably, house prices continue to rise due to a shortage in the housing market and favourable tax benefits.
Legacy spend, and teams remain small
Dutch legacy marketing budgets and numbers of staff grew in 2019, but less than total fundraising and communications budgets. As a result, the share of legacy marketing decreased compared to 2018.
Across the consortium, legacies account for 22% of fundraising income, but only 3% of the fundraising and communications budget is spent on legacy acquisition and relationship management. Likewise, only 6% of all fundraising and communications staff are involved in legacies.
With charities currently receiving less fundraising income and facing cuts to their budgets, legacy teams are also facing cuts despite receiving more legacy income than expected.
Growing engagement with charities
The 2020 consumer survey (conducted in April) showed that baby boomers (aged 65-74) feel more positive about charities than the over-75s. This optimism will lead to an increase in legacy income across the sector over the next decade when the baby boomers become the main legators.
Older Dutch people have become increasingly positive about charities and their marketing communications. Although a long-term trend, it is striking that they now indicate much more often that they want to be involved in charities compared to the research conducted pre-COVID-19.
Older people and baby boomers are also more open to including charities in their will. However, there is still more work to do to catch up with the UK; 7% of Dutch 50+s now have a will including a gift to charity, compared to 13% of UK 50+s, and this is a potential growth area.
In the coming years, Legacy Foresight want to continue to grow the Legacy Monitor in the Netherlands.
We will be running the programme over a two-year cycle, and we’re planning to make it easier for charities to participate, allowing more charities to join at a lower cost. To find out more, get in touch with Arjen van Ketel.