In this week's budget, the Chancellor has handed legacy fundraisers a gift by incentivising legacies as a form of donation.
Although he left the inheritance tax nil rate band frozen until April 2015 (which might be seen as mean spirited), he did announce that a reduced rate of inheritance tax (IHT) will apply where 10% or more of a deceased’s net estate (after deducting IHT exemptions, reliefs and the nil rate band) is left to charity. In those cases the current 40% rate will be reduced to 36%. The new rate will apply where death occurs on or after 6 April 2012.
What this means is that we as legacy fundraisers now have a new "donor motivator" to use in our campaigns.
The proposition is that "if you leave this charity a legacy of 10% of your estate, you will benefit from a 10% reduction in your inheritance tax rate".
Although this sounds better than it really is in financial terms (as 10% of the net estate after deductions will of course be more in cash terms than the reduction in IHT) it should still be a valuable incentive for those people motivated by a desire to pay less tax.
On its own, this move is unlikely to result in a huge growth in legacy giving, but it is nevertheless a useful addition to the legacy tool box and, for some people, should be enough to persuade them that a legacy is worth considering.
At a tactical level, it also gives legacy fundraisers another reason to talk to donors about legacies and to update them on the latest rules. We need to make the most of this opportunity!
Thursday, 24 March 2011
Wednesday, 26 January 2011
Barriers to Legacy Fundraising Revealed
So here we have it - the reasons why so many small and medium sized charities miss out on legacies.
Our survey of 52 charities looked at what was stopping them from maximising legacies and found the two main reasons were a) lack of knowledge and understanding of what to do and b) lack of staff capacity to do it. In third place came a lack of strategic focus.
This was slightly surprising, given all the opportunities for training on legacies and the fact that there is so much information available these days. I had also expected the lack of strategic focus to play more of a role.
The lack of capacity is a harder problem to fix, especially when so many charities are struggling to stand still at the moment. Perhaps there is a link here to the third reason (lack of strategic focus)? If legacies were seen as a strategic priority, then maybe the staff capacity would be found, in lieu of other less profitable activities?
The learning from the survey is clear. The sector needs to make legacy education more of a priority and charities themselves need to address the capacity issue, either by reconfiguring their fundraising activities to include legacies or by seeking external support. The legacy opportunity is just too great to do nothing!
The full report on our survey can be read at:
www.wgconsulting.co.uk/news
Our survey of 52 charities looked at what was stopping them from maximising legacies and found the two main reasons were a) lack of knowledge and understanding of what to do and b) lack of staff capacity to do it. In third place came a lack of strategic focus.
This was slightly surprising, given all the opportunities for training on legacies and the fact that there is so much information available these days. I had also expected the lack of strategic focus to play more of a role.
The lack of capacity is a harder problem to fix, especially when so many charities are struggling to stand still at the moment. Perhaps there is a link here to the third reason (lack of strategic focus)? If legacies were seen as a strategic priority, then maybe the staff capacity would be found, in lieu of other less profitable activities?
The learning from the survey is clear. The sector needs to make legacy education more of a priority and charities themselves need to address the capacity issue, either by reconfiguring their fundraising activities to include legacies or by seeking external support. The legacy opportunity is just too great to do nothing!
The full report on our survey can be read at:
www.wgconsulting.co.uk/news
Tuesday, 27 July 2010
Exposing the Barriers to Legacy Fundraising
In carrying out fundraising reviews over the years, I have come across numerous charities which have really not grasped the legacy opportunity. Yes, they may know that legacies can be good money and maybe receive the odd one, but somehow they never quite get round to planning and running a proper campaign. What is it with these people?
OK, I know that a lot of organisations are focussed on the short term at the moment, but they are probably the ones which focussed on the short term ten years ago. If they had made the investment in legacies then, they would now be enjoying great returns. The recession is just the latest excuse.
I am not talking here about those charities which have effective campaigns in place. They are clued up ones who already recognise the potential of legacies and are reaping the rewards. I am talking about those procrastinators who never get round to it or come up with a myriad of excuses why they should not do legacy fundraising.
Previously, I have come across a wide range of excuses, such as “our trustees don’t understand legacy fundraising” (so whose job is it to tell them then?) or “we don’t have the budget for legacies” (even though they have the budget for things that raise far less money pound for pound).
Other excuses include “we’ll get on to legacies once we have sorted X, Y and Z (usually a list of pet projects which) or “we don’t like the idea of asking people to leave us money in their will – it’s too sensitive an issue” (yet some hospices manage to do it very successfully). Some even won’t do legacy fundraising because they think it is high risk, just because it is a long term opportunity and they cannot measure success in hard cash in year one.
It’s time we nailed this once and for all. Let’s get these excuses out in the open where they can be properly debated. I have set up a survey in Survey Monkey and am inviting fundraisers to contribute their views and experiences. So come on folks, tell me how it is at your charity by visiting:
Click here to take survey
I will share the results of the survey and hope that, in the process, we can open up a proper debate and persuade a few more charities that investing in legacies really is worth the candle
OK, I know that a lot of organisations are focussed on the short term at the moment, but they are probably the ones which focussed on the short term ten years ago. If they had made the investment in legacies then, they would now be enjoying great returns. The recession is just the latest excuse.
I am not talking here about those charities which have effective campaigns in place. They are clued up ones who already recognise the potential of legacies and are reaping the rewards. I am talking about those procrastinators who never get round to it or come up with a myriad of excuses why they should not do legacy fundraising.
Previously, I have come across a wide range of excuses, such as “our trustees don’t understand legacy fundraising” (so whose job is it to tell them then?) or “we don’t have the budget for legacies” (even though they have the budget for things that raise far less money pound for pound).
Other excuses include “we’ll get on to legacies once we have sorted X, Y and Z (usually a list of pet projects which) or “we don’t like the idea of asking people to leave us money in their will – it’s too sensitive an issue” (yet some hospices manage to do it very successfully). Some even won’t do legacy fundraising because they think it is high risk, just because it is a long term opportunity and they cannot measure success in hard cash in year one.
It’s time we nailed this once and for all. Let’s get these excuses out in the open where they can be properly debated. I have set up a survey in Survey Monkey and am inviting fundraisers to contribute their views and experiences. So come on folks, tell me how it is at your charity by visiting:
Click here to take survey
I will share the results of the survey and hope that, in the process, we can open up a proper debate and persuade a few more charities that investing in legacies really is worth the candle
Friday, 2 July 2010
Legacy pledges - friend or foe?
In recent years, asking donors to pledge a legacy to a charity has been going out of fashion and for good reasons. How is it then that some charities are still basing their campaigns on pledge seeking and being very successful?
At this week’s Legacy Fundraising conference, run by the Institute of Fundraising’s new West Midlands group, we had an interesting debate. I was presenting on legacy strategy and raised the issue of pledge seeking, explaining why it is increasingly frowned upon (a lot of people see it as intrusive and will not tell the charity of their intentions; using pledges received to monitor campaigns misses all those who will not disclose their intentions and therefore under-reports the impact of a campaign; typically half of legacies received are from people not even known by the recipient charity; some people see it as rather coercive and out of kilter with the current trend for drip fed, soft sell legacy work).
To my embarrassment then, my talk was followed by two other speakers, both from hospices, which make successful use of pledges to secure legacies, to monitor results and to predict future income. This was not lost on the audience who wanted to explore this issue further and rightly so.
Most interestingly for me was the case study from Acorns Children’s Hospice, which bases its legacy work fairly and squarely on pledge seeking and very successfully too. Its legacy income has grown spectacularly in recent years, so its approach has not put people off, nor has it caused problems in monitoring results. Far from it. So how do we explain this?
What struck me about the two case studies (the other was from Douggie Mac in Stoke) was that they were both from local hospices, with a high profile in their areas and considerable good will in their communities. The Douggie Mac approach was largely based on a will writing scheme, through which pledges were also sought.
The Acorns campaign, however, had sought to create a culture where it was normal and expected to leave a legacy and where supporters were asked directly to pledge putting a gift in their wills yet – the implication being that this was the done thing. Its trustees take a lead in this and Acorns has succeeded in creating a climate where legacy giving is a natural way of supporting the charity. In this context, it is easy to see that pledge seeking can work well as part of the fundraising process.
So in future, I will be careful not to write off pledge seeking as an outdated, “sales push” approach. In some circumstances, it can clearly work. I am still not convinced that it is right for all charities (and especially the small and medium start up campaigns that I get involved in). But maybe I’ll be a bit more careful about saying “never” again!
At this week’s Legacy Fundraising conference, run by the Institute of Fundraising’s new West Midlands group, we had an interesting debate. I was presenting on legacy strategy and raised the issue of pledge seeking, explaining why it is increasingly frowned upon (a lot of people see it as intrusive and will not tell the charity of their intentions; using pledges received to monitor campaigns misses all those who will not disclose their intentions and therefore under-reports the impact of a campaign; typically half of legacies received are from people not even known by the recipient charity; some people see it as rather coercive and out of kilter with the current trend for drip fed, soft sell legacy work).
To my embarrassment then, my talk was followed by two other speakers, both from hospices, which make successful use of pledges to secure legacies, to monitor results and to predict future income. This was not lost on the audience who wanted to explore this issue further and rightly so.
Most interestingly for me was the case study from Acorns Children’s Hospice, which bases its legacy work fairly and squarely on pledge seeking and very successfully too. Its legacy income has grown spectacularly in recent years, so its approach has not put people off, nor has it caused problems in monitoring results. Far from it. So how do we explain this?
What struck me about the two case studies (the other was from Douggie Mac in Stoke) was that they were both from local hospices, with a high profile in their areas and considerable good will in their communities. The Douggie Mac approach was largely based on a will writing scheme, through which pledges were also sought.
The Acorns campaign, however, had sought to create a culture where it was normal and expected to leave a legacy and where supporters were asked directly to pledge putting a gift in their wills yet – the implication being that this was the done thing. Its trustees take a lead in this and Acorns has succeeded in creating a climate where legacy giving is a natural way of supporting the charity. In this context, it is easy to see that pledge seeking can work well as part of the fundraising process.
So in future, I will be careful not to write off pledge seeking as an outdated, “sales push” approach. In some circumstances, it can clearly work. I am still not convinced that it is right for all charities (and especially the small and medium start up campaigns that I get involved in). But maybe I’ll be a bit more careful about saying “never” again!
Tuesday, 16 March 2010
Legacies and Direct Mail Appeals
So a DM agency has identified that adding a legacy info tick box to direct mail appeals reduces the cash response rate (3rd Sector magazine 16th March). Big deal!
Of course anything you do to water down an appeal will reduce the response rate. The best results are always achieved by making a clear and direct ask for one thing at a time, not by confusing the donor with a range of options. But then we knew that didn’t we?
As a result of their findings, US based Pareto Fundraising claims that “Separate communications about legacies are much more effective than peripheral efforts such as tick boxes on appeal response forms.” Again, this should be no surprise to anyone. But I’m still not convinced.
Firstly, a small reduction in response rates to cash appeals may well be a price worth paying to achieve more legacies, given that the average cash gifts quoted by Pareto were just £29.11 (with no legacy box) or £27.64 (with legacy option). When compared to the current UK average legacies (around £4,000 for cash gifts and £30,000 for shares of estates) the difference is paltry and in my book well worth a punt.
More importantly of course, we know that for most people, leaving a legacy is a big decision which they do not come to quickly. They often need to be gently reminded over time that keeping their will up to date and remembering a charity in it are good things to do. Few people will rush out to do so at the first mention. So as well as asking for legacies directly, drip feeding low key messages also makes a lot of sense, whether it is on response coupons, email footers, web banners, stationery etc. It all helps.
So as for me, I will keep advising my clients to give donors the legacy option, even if it may reduce their short term cash results slightly. It has to be a good investment for the future.
For more on legacies, see http://www.wgconsulting.co.uk/fundraising-services/legacy-fundraising
Of course anything you do to water down an appeal will reduce the response rate. The best results are always achieved by making a clear and direct ask for one thing at a time, not by confusing the donor with a range of options. But then we knew that didn’t we?
As a result of their findings, US based Pareto Fundraising claims that “Separate communications about legacies are much more effective than peripheral efforts such as tick boxes on appeal response forms.” Again, this should be no surprise to anyone. But I’m still not convinced.
Firstly, a small reduction in response rates to cash appeals may well be a price worth paying to achieve more legacies, given that the average cash gifts quoted by Pareto were just £29.11 (with no legacy box) or £27.64 (with legacy option). When compared to the current UK average legacies (around £4,000 for cash gifts and £30,000 for shares of estates) the difference is paltry and in my book well worth a punt.
More importantly of course, we know that for most people, leaving a legacy is a big decision which they do not come to quickly. They often need to be gently reminded over time that keeping their will up to date and remembering a charity in it are good things to do. Few people will rush out to do so at the first mention. So as well as asking for legacies directly, drip feeding low key messages also makes a lot of sense, whether it is on response coupons, email footers, web banners, stationery etc. It all helps.
So as for me, I will keep advising my clients to give donors the legacy option, even if it may reduce their short term cash results slightly. It has to be a good investment for the future.
For more on legacies, see http://www.wgconsulting.co.uk/fundraising-services/legacy-fundraising
Wednesday, 10 February 2010
Time - our best friend?
We all know that legacy fundraising is not about jam today - in fact this is the key reason why so many charities under-invest in it and let it slip down their priority list. After all, they have work to fund this year and next and fundraisers have targets to meet!
However, some feedback I have just had on a campaign I designed in 2002 has underlined for me again the real value of legacies and the importance of taking a long term perspective.
The campaign I am writing about was planned in 2001 for a small national charity. We ran focus groups to develop the proposition, recruited and interviewed some legacy champions, developed the campaign literature and planned the launch. In March 2002 it all kicked off and the charity then took it over to run things itself. The head of fundraising eventually moved on and - as can easily happen - we lost touch with the charity.
By chance I was recently back in touch and learned that the campaign, which is essentially still the same, has so far raised £3 million for the charity. While I no longer have the budget details, I reckon this means an ROI of up to 100:1 - a pretty good return by any reckoning.
So what has made the difference here? Well the campaign has clearly been effective but there was nothing revolutionary about it. Fairly standard stuff in fact. What has made the difference of course is time - 8 years down the line, it has had time to work (and is still working).
We hear a lot these days about the many things we need to get right in legacy fundraising (the vision, the strategy, the copy etc), but in fact the most important thing is probably to give things enough time. The best campaign will not work if not given time, whereas even a standard, competent campaign can have fantastic results if maintained consistently over a longer period.
This is an important message for fundraisers and trustees to understand. Invest in legacies now and, if you take the long view, you WILL get the return you are seeking, provided you get the basics right.
For more details about our legacy planning work, please visit:
http://www.wgconsulting.co.uk/fundraising-services/legacy-fundraising
However, some feedback I have just had on a campaign I designed in 2002 has underlined for me again the real value of legacies and the importance of taking a long term perspective.
The campaign I am writing about was planned in 2001 for a small national charity. We ran focus groups to develop the proposition, recruited and interviewed some legacy champions, developed the campaign literature and planned the launch. In March 2002 it all kicked off and the charity then took it over to run things itself. The head of fundraising eventually moved on and - as can easily happen - we lost touch with the charity.
By chance I was recently back in touch and learned that the campaign, which is essentially still the same, has so far raised £3 million for the charity. While I no longer have the budget details, I reckon this means an ROI of up to 100:1 - a pretty good return by any reckoning.
So what has made the difference here? Well the campaign has clearly been effective but there was nothing revolutionary about it. Fairly standard stuff in fact. What has made the difference of course is time - 8 years down the line, it has had time to work (and is still working).
We hear a lot these days about the many things we need to get right in legacy fundraising (the vision, the strategy, the copy etc), but in fact the most important thing is probably to give things enough time. The best campaign will not work if not given time, whereas even a standard, competent campaign can have fantastic results if maintained consistently over a longer period.
This is an important message for fundraisers and trustees to understand. Invest in legacies now and, if you take the long view, you WILL get the return you are seeking, provided you get the basics right.
For more details about our legacy planning work, please visit:
http://www.wgconsulting.co.uk/fundraising-services/legacy-fundraising
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.
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.
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