Wednesday 16 December 2009

Lawyers and Legacies

At yesterday’s IoF Legacy Conference at Earl’s Court, lawyer Alison Talbot of Blake Talbot gave some interesting insights into a lawyer’s perspective on legacy fundraising.

To start with, she gently berated charities for chasing discretionary legacies, suggesting that professional executors found them a nuisance and that they upset donors’ families. Fundraisers familiar with Smee and Ford’s “pink forms” will know that these are legacies left by donors to the discretion of their executors and that charities which fit the criteria and receive a notification respond by writing to the executors to be considered for a share. As a result, executors can receive a lot of appeals - sometimes 60 or more.

My reaction was that, if lawyers find the charities’ letters so troubling and are concerned for family executors, why then do they not discourage will makers from leaving this type of legacy in the first place? After all, there are other sorts of legacy they can leave, most of which are easier to administer.

Talbot also went on to say that unbeknown to fundraising charities, many discretionary legators also leave a list of preferred charities, not included in their will. In other words, while discretionary legacies can appear to be a good opportunity (if still a long shot), in practice the money is already allocated and the chances of success therefore very slim.

Interestingly, she also nailed a common question from charities about advertising in legal gazettes, by confirming that she checks charity details for will making clients not in these publications, but on the Charity Commission website. So here it is from the horse’s mouth folks – don’t waste money advertising in legal gazettes, invest it in better donor care, where it will make a real difference.

So often I find people have false ideas about how lawyers can help to raise legacies. Talbot confirmed yet again that, in practice, solicitors rarely influence the choice of charity (in fact I have only ever met one lawyer who did claim to influence people in favour of his chosen charity). She also confirmed that her firm will not allow charity literature in its reception area, so the opportunities for promotion were also limited.

I know there are ways we can work with lawyers, but we need to be clued up about what they can and cannot do for us. For most charities, efforts should be focussed on prospective donors (as well as stewarding enquirers and pledgers) rather than trying to court professionals who have limited opportunities or little inclination to help bring in legacies.

Monday 19 October 2009

Contested Legacies

So the RSPCA will appeal against a court decision in favour of an irate relative cut out of her mother’s will. And for £2 million, who can blame them?

Rare as it is for relatives to contest charitable legacies, there is an issue here, which relates to the value and integrity of the brand. And more importantly what can we all do to avoid getting into this situation in the first place?

For a legacy of this size, the RSPCA trustees clearly had to defend it. Charity law demands that trustees protect the assets of the charity and, after all, £2 million would help a lot of furry friends. Jo public may see if differently, however, and I wonder what will be the damage to the RSPCA’s reputation among its donors? We will most probably never know and nor will the charity. However, I just sense that – rightly or wrongly - some people may see the charity’s action as grasping or unseemly.

So in taking this risk to brand integrity, we need to ask “how low do you go?” £2 million is well worth contesting, but £20,000 or £2,000? It’s an interesting question, with no easy answers.

More importantly though is the question about how to avoid getting into this situation in the first place.

While we obviously cannot decide what goes into donors’ wills or prevent people from cutting out their relatives, perhaps we should be more upfront about the need to provide for relatives (and especially dependents) in the first place? I know many charities do this already to some degree (or sometimes pay lip service to it), but some don’t and even among those that do, it could be stressed more prominently in legacy materials.

The risk in doing this of course is that charities may lose out on some funding, but they need to balance this carefully against the need to defend legacies from outraged relatives, with all the legal costs and bad publicity involved, which itself may deter other donors from giving (and not just in the form of legacies – it may impact on other forms of giving too).

It’s a difficult circle to square, but the current situation seems to indicate that we have not yet got the balance quite right.

Friday 25 September 2009

Innovation with Discretionary Legacies

Recent discussion on the Yahoo Legacy Marketing Group has raised some interesting thoughts about how best to approach discretionary legacy opportunities (this is where notice is received, usually via the Smee and Ford "pink forms" service, that money has been left in a will for the executors to distribute to charity, sometimes in named areas of work, such as medial research, homelessness etc).

While it is true that most approaches are ignored, occasionally a well crafted response can lead to a good result (I've certainly seen this with some clients of ours). However, there are several challenges to be considered here.

Firstly, executors receive a lot of charity appeals, so there is the issue of competition. There is little you can do about this, apart perhaps from only responding to opportunities which fit closely to what your charity does. If everyone did this, volumes would be reduced and serious approaches would have a better chance. So maybe it's time to ignore the long shots, for the benefit of all?

Secondly, executors are often grieving relatives, who do not always appreciate being targeted in this way. While some are solicitors or other advisors (where a professional to professional approach can be taken), for family executors a highly sensitive approach is required, which recognises their situation and makes a very gentle, even apologetic approach. This can be achieved, as far as possible, in a covering letter.

Thirdly, there is the issue of what to send - which information and how much of it? Traditionally, most charities have sent an annual report and short covering letter, with a very general ask. However, the risk here is that your appeal ends up looking very much like everyone else's. So what to do?

The approach I am testing now is to effectively treat discretionary appeals the same way as trusts. In other words, to send not only tailored letters (i.e. for family or professional executors), but also to provide a costed project for consideration. This way, the donor can see exactly how the legacy would be used, rather than being asked for a general gift. OK, this may reduce your chances of general funds - but let's face it, discretionaries are someting of a long shot anyway, so if it increases your chances of success, why not give it a go?

Friday 28 August 2009

Legacies Bucking the Trend

The striking feature for me of the Charity Market Monitor report, published this month, was that legacy income for the top 300 fundraising charities grew by 8%, which was well above the 0.9% overall income growth reported for these charities.

While these figures are based on analysis of the top 300 charities' accounts for 2007 and 2008 by the Cass Business School (i.e. pre-recession), they still have a relevant massage in today's changed world - that legacies are different and do not directly follow the path of other fundraising techniques.

OK, so this year's legacy values may be affected by lower house prices and a fallen stock market, but even here we read today that house prices are growing again nationally (up 1.7% in July alone) and the FTSE is now nudging the psychologically important 5,000 threshold again - in other words, clear signs that legacy values will be soon back on the way up again.

Ultimately, of course, your legacy results are less reliant on fluctuations in the wider economy than are other forms of fundraising, because they do not depend on donors' current incomes. In fact, today's legacy results are driven far more by your marketing activity during the past 5 or 10 years than by how the high street or banking sectors are performing today.

The key learning point here then is that while you cannot control the economy (and therefore the values of donors' estates), you can control your own marketing efforts, which influence the volumes of legacies you receive. on the basis that results = volumes x average values.

So while the economy may fluctuate and legacy values go up and down in the short term, in the medium to longer term your legacy results depend far more on the way you market legacy giving. In other words, don't worry too much about the economy - just focus on what you can control and make sure you are getting your marketing right. Then your results will come.

Tuesday 4 August 2009

Legacy Fundraising - Making it work for you

It's amazing how many UK charities could be raising significant funding from legacies but do not. Why is this? For some it may be not wanting to spend the time or money for others it may be just not knowing where to start.


To help charities like these, there is a very simple formula, which I call the 3 P's, consisting of:


  • People

  • Proposition

  • Promotional channels

You can start by identifying the audiences or people that you will be targetting with your legacy message. List all the different groups (e.g. donors, members, beneficiaries, volunteers, trustees etc), then put numbers next to them. You'll probably be surprised just how many people you can reach!

Secondly, think carefully about the message or proposition you will use. Why should anyone leave a legacy to your cause? What is different or special about what you do? Try to come up with a compelling message which sums up the difference you could make with somebody's legacy. Then test this in a group which is representative of your target audiences.

Finally, you need to identify the ways you will get your message across. Chances are you already communicate with people in various ways (such as newsletter, website, displays, events etc). You don't need to reinvent the wheel and by integrating legacy messages into existing activities, you can save time and money on your campaign, although it will probably pay to develop some legacy specific materials.

So by following these three simple steps, most charities can make a start in legacy fundraising, without spending a fortune. It really can be a straightforward thing to do, so put it on your priority list today. It will be one of the best investments of time and money you will ever make for your organisation!