2016 was a turbulent year, both in the charity sector and on a wider political level, but it was another good year for legacy giving, with total UK legacy income likely to reach around £2.7bn in 2016, compared to an estimated £2.5bn in 2015.

We asked four leading industry voices to outline the key issues and priorities facing the legacy sector and its fundraisers this year. Here are their views:

Strategic focus

Too many charities will be held back by a lack of leadership in 2017. Market growth could be further accelerated if more charities had the confidence to talk about gifts in Wills. We will continue to see too many charities focus on the short-term at the expense of other forms of fundraising, such as legacies. These charities will continue to punch below their weight – their market share squeezed as donors support other causes. However, this year will continue to see an even greater diversity of charities who will promote gifts in Wills for the first time, including arts, cultural and heritage organisations; hospices; and local causes. Last year saw a 10% increase in the number of charities who benefited from a legacy for the first time. This trend will continue in 2017. Perhaps to record levels.
The best fundraising charities will continue to embed legacies across their organisation. But far too many will be left behind.

Rob Cope, Director, Remember A Charity

Falling number and value of bequests?

While for most charity prospects legacy income in 2017 will depend on the number and value of large bequests they receive during the next 12 months, for the legacy market as a whole, prospects will depend both on how many bequests of all sizes are received, and the average value of those bequests.

While we’d expect the number of bequests to go up, continuing the long-term trend of the last 30 years, for an individual year the number of people dying plays a critical factor in how many bequests are received across the sector. Following a spike in deaths in 2015, figures are likely to have fallen by around 2.5% in 2016, and are forecast to fall by a further 3.7% in 2017. This fall in deaths will undoubtedly be a drag on bequest numbers.

Perhaps more important, is the impact that developments in the macro economy will have on average bequest values. While the ‘doom-laden’ predictions voiced at the time of the Brexit vote have not yet come to pass, many economists didn’t think that the detrimental effects of the decision to leave would actually appear until negotiations for departure started. As a result, most economic forecasts expect a slowdown in the economy this year, and it’s quite possible that the stock market will see a significant correction from the record levels seen recently. If these more pessimistic predictions are correct, it’s likely that we will not see much growth in average bequest values this year – particularly for residual bequests.

On top of the uncertainty created by the Brexit negotiations, we also have the inauguration of the new American president due imminently and it is still not at all clear exactly what policies will be implemented and what kind of effect they might have on the global economy. We could be in for a ‘double whammy’ over the year ahead!

Chris Farmelo, Director, Legacy Foresight

Building relationships

Despite a body blow to public confidence in charities and the economic uncertainty that Brexit brought, legacy income continued to grow in 2016. More people gave to more charities, and (for now) legacy values have remained strong. Because at the heart of the matter, people still care deeply about their causes, and legacy gifts meet a real human need in a way that other forms of giving cannot – to make a lasting impact, long after you are gone.
So more than ever it is critical that charities build their communities, their tribes, and form a deep emotional connection with that audience. At the heart of this understanding and communicating why this group of people should leave a gift in their will and giving them a compelling reason to do so.

Ashley Rowthorn, Director, Legacy Voice

The issue of testamentary freedom

In December the nearly decade-old Ilott v Mitson case reached the Supreme Court.  The outcome of this case will be one of the most significant moments for legacy giving in 2017.   
The previous ruling by Judge Million in the High Court was unhelpful as it appeared to draw into question the long-held belief – relied upon by many – that we have testamentary freedom to distribute our assets as we choose when we die.
It is hoped that the Supreme Court ruling, expected in March, will provide clarity with respect to the extent of the Court’s powers when considering claims under the Inheritance (Provision for Family and Dependants) Act 1975.  
This clarity should, in turn, give legators confidence that the people they care for, and the causes they believe in, will be supported in the way that they have chosen in their will. Should the Supreme Court fail to provide clarity on the principle of testamentary freedom, I fear there is a risk that the number and value of charitable gifts left in wills may decline. We await the outcome.

Chris Millward, Chief Executive, Institute of Legacy Management

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