Legacy Monitor Netherlands has been analysing the Dutch legacy market since 2014, providing a wealth of insight and a framework for organisations to assess and benchmark their own performance against. The programme now involves 19 leading Dutch charities who agree to share performance data, ideas and experiences. Together, these organisations represent around 50% of the income of the top 100 legacy charities in the Netherlands Here, Programme Manager Arjen van Ketel, discusses the latest trends emerging from this year’s programme.
Legacy income growth continues
The good news is that legacy income continues to grow and is becoming an increasingly important source of funds for Dutch charitable organisations. The key factors impacting legacy growth are looking positive; economic growth, an ageing population, and the expected rise in the value of houses and shares. Although there are of course some potential dark clouds on the horizon not least Brexit, which could dampen economic growth rates in the Netherlands as well as the UK.
However, taking all this into account, Legacy Foresight’s forecasting model projects 3.6% average growth per year until 2027. This is slightly stronger growth than the 3.3% p.a. achieved in the years following the global recession, 2008-2017. This equates to the 100 largest legacy charities growing from €283 million now to €417 million in 2027.
The dominance of the largest fundraisers is decreasing slightly over time, and indeed these organisations are struggling to maintain their market share, as bequests are left to a broadening group of organisations. As in the UK, it is the younger and the medium-sized organisations which are growing the fastest.
More work to do to catch up with the UK
In our consumer research into older Dutch people we found that that the number of new wills written has increased substantially in the last three years . Combining this with the growing death rate, we anticipate strong growth in charitable gifts over the next five years.
Boomers, in particular, are showing a greater interest in charities compared to the previous generation. While it is the older war baby generation who are now the major source of legacy income for charities, it is the baby boomers who are currently writing the most wills and from which we will benefit most over the next twenty years.
Remarkably, the benchmark data from our sample of 19 charities shows that the number of bequests received per 1,000 deaths has been decreasing slightly. This is striking, because in the UK we see a long term increase in this same measure. Possible explanations are that the number of beneficiaries per charitable will is being reduced (traditionally, Dutch legacy donors left to a large number of causes – 6 on average!) and/or that the number of organisations receiving inheritances is substantially broadening (with smaller charities outside our consortium group gaining ground). The fact that the ‘new’ sector of art and culture is growing so fast underlines this fact. Furthermore, larger organisations in particular, are struggling to grow the number of bequests compared to medium-sized and smaller organisations. The positive effect of more wills is therefore not yet reflected in the number of charitable gifts, possibly due to the lag effect in legacies.
What should individual organisations do to improve their fundraising?
Legacy marketing expenditure remains very low. Within the Legacy Monitor Netherlands consortium, legacies represent 27% of fundraising income but only 3.6% of fundraising spend. Fortunately, although the total fundraising budget fell by 10% in 2018 this has not impacted legacy spend levels, which remained similar to the previous year.
The number of staff seems to be a limiting factor for further growth, especially given the great importance attached to personal recruitment and contact strategies. Legacy marketers represent only 5% of dedicated fundraising staff. Staff capacity may struggle to cope with the growing number of supporters and pledgers.
The content of stewardship programmes should focus even more on involving pledgers and prospects. Research shows that the majority of donors and an even larger amount of people who are interested in legacies want to become more involved in their organisation. for example, by volunteering, or participating in visits and other events. This fits in with our image that the new baby boomers want to be more than ‘arms-length’ donors. All the more reason for future legacy donor acquisitions to be strengthened through a good stewardship programme.
In 2020 we want to grow the Legacy Monitor. With more participants, we can collect and benchmark data from a larger sample and make more comparisons between sectors or by charity age. We can also conduct more consumer research and explore important issues such as the growth of wills, the behaviour and perceptions of Dutch baby boomers and the “invisible” legacy donors who exist both inside and outside a charity’s database.