In such incomparable times, talking about legacies may seem even more difficult than usual.
Many are grieving for loved ones, and many more are feeling uncertain about their future health and finances. Prompting a conversation about leaving a charitable gift in your will can feel uncomfortable and inappropriate.
With British lockdown rules easing – at least for now – how has the coronavirus pandemic impacted on the legacy sector so far? What should we be doing as our country takes tentative steps back to life in the ‘new normal’? And what lessons can we draw from the last few months to shape our future legacy marketing?
The initial lockdown reaction
Charities retreat. Towards the end of March as the pandemic escalated and lockdown was imposed, many charities decided to immediately stop legacy marketing activities, albeit for several different reasons. Some campaigns were pulled because they contained no reference to the current COVID-19 situation and therefore felt irrelevant. Others because they were fearful of negative backlash; appearing to sound tone-deaf or at worst, opportunistic.
Many charities knew that their primary audience was older, and therefore high risk, and didn’t feel it was the right time to be asking them for anything; instead, they pivoted activity towards stewardship and keeping in touch. Other charities stopped because they had to divert resources – people or finances – into shoring up service delivery or saving cash, in fear for their long-term survival. Whatever the reason, we witnessed a significant decline in legacy marketing activity, particularly in April and May as the pandemic peaked across the UK.
Will writing peaks. Conversely, the will writing sector experienced a surge in demand, as some people woke up to a need to make or update Wills that had long been put off. The Law Society reported a 30% increase in demand for Wills, but as lockdown made face to face interactions difficult, many people looked to online Will writing providers, with Farewill reporting an increase of demand of almost 300%.
In our research, carried out in the first half of June[i], 24% of adults agreed that the coronavirus pandemic had made them more likely to make or rewrite their will; 6% a lot more likely. And while only 4% of adults had taken active steps to make or rewrite their will as a result of the pandemic, another 19% were seriously considering it.
In the face of this surge in demand, some charities increased their legacy marketing activity, on the basis that it was relevant and timely, meeting the need for Will writing at the time.
Legacy administration grinds to a halt. With solicitors’ practices closing, the property market put on hold, and staff absences on the rise, there was a real fear for legacy administration at the start of the epidemic. Without the ability to manage the estate administration process, legacy income could at least be delayed, if not the value impacted, as assets values were affected.
Towards the ‘new normal’?
Now that the initial phase of the pandemic appears to be under control, the UK government is shifting its attention to the economy, and Britain is slowly coming back to life.
Many charities have been severely impacted by the pandemic, with core income streams such as events fundraising and charity shops stopping overnight. Fundraising staff have been furloughed and budgets cut, but the need to raise money is greater than ever.
So now, with the benefit of three months hindsight, what do we know about legacy giving and what lessons can we learn to shape our future marketing and investment decisions?
Legacy income has kept many charities afloat. Contrary to initial fears, many charities have found that legacy income continues to flow, particularly from estates that were already notified over the previous year. Given that it can take around a year to complete the estate administration, there were many charitable legacy gifts in progress and able to be paid out.
Charities with well-resourced legacy management teams have adapted quickly to working from home and using emails rather than post. Most professional executors were still able to act, and even had an interest to complete on estates so they could receive their fee payment!
A proactive approach meant that while legacy incomes were not at pre-COVID levels, they were not as severely affected in the short-term as may have been feared, and far less than many other areas of fundraised income. In fact, legacy income has proven to be one of the most stable and consistent income streams. It has undoubtedly helped many charities weather the crisis.
Legacy income is now more important than ever. While we expect legacy income to be down this year, it is likely to become an even bigger percentage of voluntary income, as other areas of giving drop sharply.
After a short, sharp fall this year, we predict a bounce back in legacy numbers and values from next year, thanks to renewed flows of bequests and some recovery in the housing market. We forecast that between over the next five years, legacy incomes will grow between 9% to 13%.
Beyond the five-year window, the long-term future for legacy income is still extremely healthy, due to underlying rises in the death rate (setting aside COVID-19) and the increased prevalence of charitable will making amongst a new generation of legacy donors. Our latest long-term forecasts[ii] still suggest that legacy incomes will double in real terms over the next 30 years.
Sustained investment is vital. But to capitalise on the real opportunity, we need to see sustained investment in this area. Despite the growth in recent years, legacy marketing is still hugely under-invested in. According to our latest Legacy Marketing Benchmarking study[iii], legacy marketing accounts for just 4% of fundraising investment, but legacy income accounts for 44% of fundraised income. That’s a serious mismatch.
As we have said before, and as many of you will have said to your leadership teams, legacies need to be continually invested in – a way of life for charities, not something that is flexed depending on circumstances.
Now is the time to act. We believe that we now have a unique window of opportunity in terms of legacy giving. For many people, the outbreak has made them consider their mortality and brought to the fore the importance of ensuring their affairs are in order.
Again, as our recent survey showed, one in five adults claim to be seriously considering making or rewriting their will as a result of the pandemic. Here, the charity sector is well placed to help the British public, offering a range of easy, low cost, trustworthy will-writing options, whether online or face to face.
Now is the time to capitalise on this opportunity, engaging with your supporters so that if and when they write their will, your charity is top of mind. It is also vitally important that information about will-writing and leaving a bequest is easily available to your supporters – from your website, your staff and your volunteers.
We would whole-heartedly support turning legacy investment back on – not necessarily in the form of direct marketing campaigns but certainly in the form of stewardship, supporter engagement, awareness-raising and exemplary legacy administration. Now, more than ever, people are keen to feel part of a community, so it is an excellent opportunity to make your supporters feel part of ‘your tribe’.
So, whatever your organisation has – or has not – done over the last few months, we believe the real opportunity will be seen by what you do over the next few years.
Legacy fundraising is a long-term game that requires consistent investment over many years to see the return. It’s not about one-off campaigns. It’s about building and sustaining engagement over the whole of the supporter journey – helping people need to feel inspired, connected and able to trust the charity with their legacy gift for years and generations to come.
[i] Populus survey of 2007 adults for Legacy Foresight, 30th May to 18th June 2020
[ii] Baby Boomer Legacies, 2019, Legacy Foresight
[iii] Legacy Marketing Benchmarking 2018-19, Legacy Foresight, based on data from 33 leading legacy charities