Measuring the return on legacy marketing investment can be more (black) art than science. Most of us believe that legacy marketing does pay back, but this is usually based on anecdotal evidence. It’s easy to name charities who have invested heavily in legacy marketing and who are also seeing legacy incomes accelerate (Macmillan, BHF and Guide Dogs, to name a few). However, it’s hard to prove and quantify the link between the two.

Perhaps that’s why legacy marketing is often underinvested compared to other forms of fundraising. According to our last Legacy Marketing Benchmarking study, legacy income makes up on average 41% of fundraised income, but legacy marketing spend is only 3% of total fundraising spend!

The impact of legacy marketing is a particularly topical issue now, with GDPR rules meaning that many charities are having to test out alternative channels. Typically, charities have used warm marketing channels in the form of TM and DM, but now many are finding that they don’t have the volume of donors in their databases any more. Therefore, it becomes necessary to consider alternative – usually cold, above the line – forms of marketing. Adopting these new forms of marketing would be a lot less risky if there was some understanding of the likely payback.

The difficulty of assessing legacy marketing impact

One of the main reasons the effect of legacy marketing is so hard to measure is that it is challenging to quantify ‘response rates’. Charities typically measure the success of a legacy campaign by the numbers of new prospects or pledgers gained, but we know that this is only a small part of the story. Only a minority of bequests come from recognised pledgers or prospects, while most come from ‘invisible’ supporters who were unknown to the legacy team, or indeed the wider charity. These donors may well have seen and been influenced by your marketing campaigns, but they are never going to tell you; so how can you measure their impact?

Then there’s the issue of time lags; something fairly unique to legacies. Investment in legacy marketing is going to take a long time to pay back as most of the people you will be marketing to will be in their 60s or 70s today, so it will be many years before the gift in their will is realised. We estimate that this lag is on average 18 years – a long time to wait for a return on your investment and a very long time to keep reliable supporter records!

In the face of these challenges, we’ve created a methodology to evaluate legacy marketing investment. Using a series of assumptions about marketing response rates, conversion rates, average values, bequest mix and more, we can calculate the likely payback value of an investment. Then by applying an age distribution curve, we can calculate when this money will be seen.

Why measurement is so important now

Our approach can be invaluable to charities trying to set or justify their legacy marketing strategy. Having the tools to work out how much marketing investment is likely to payback and when that money will materialise is crucial to legacy fundraising teams; allowing them to demonstrate the value of their activities, evaluate the ‘return’ on the resources they invest and secure future – vital – budget.

Further to this, analysis relating to particular streams of activities allows teams to articulate and discuss their views with senior management on which approaches are most effective based on likely response rates and payback periods, enabling them to effectively shape their legacy marketing strategy. The data can also be used to test and plan for a series of alternative future scenarios taking into account not only hard numbers but organisational and brand implications too.

And while yes, it does take a long time – we believe it takes 40 years to see all of the return of an investment – it is worth the wait. Payback ratios tend to be very healthy compared with other sources of fundraising. Our last legacy marketing benchmarking project indicated that for every £1 spent on legacy income, charities see, on average, £33 back….eventually. It would take a significant amount of time to see this return so the £33 would need to be discounted to account for this

If you have any questions or would like to hear more about our legacy marketing evaluation service, get in touch with me here.