The Cost-of-Living Crisis

The Cost-of-Living Crisis: What does this mean for legacies and how can charities adapt?

 

With escalating living costs impacting households across the UK, our recent Remember A Charity members’ webinar brought together legacy experts from different areas of the sector to discuss what can be expected for the legacy market. In this summary, we share our highlights from the event, along with tips and recommendations for fundraising for gifts in Wills.

Watch the webinar on-demand here (accessible to members only)

 

Will the crisis impact the legacy market?

Jon Franklin, Economist at Legacy Foresight, part of the Legacy Futures group, shared a message of cautious optimism, despite the economic storm clouds gathering. The legacy market is generally resilient, and less likely to be impacted by a recession than other areas of fundraising. Based on the current market analysis and forecasts, he anticipates that:

• Legacy income growth will slow and residual values are likely to drop in the short-term, echoing a predicted fall in house prices.
• However, the slowdown in income will be offset by continued growth in the number of gifts as a result of rising death rates from an ageing population. By 2027, the number of annual deaths seen during the height of the pandemic will be our new norm.
• The legacy market will bring in an average of £4bn per annum in the next few years (up from £3.5 billion in 2021).
• Still, due to a rapid rise in inflation and living costs, £4bn in 2025 will buy you less than it does in 2022. If we apply today’s prices to the legacy market, the value of that income could see a real term decline of 5-10%.
• Legacy income remains on a long-term growth trajectory. UK charities are expected to raise around £20 billion through gifts in Wills in the next few years alone (to 2027).

All this comes with the caveat that, particularly in the current political climate, the economy is fast-changing. Jon reminded us that charities will be all-the-more in need of stable sources of income like legacies during times of uncertainty and austerity, saying:

“Legacies tend to be relatively resilient, but with the cost of living affecting giving behaviour, it’s important for charities to work hard to remain front of mind. The pandemic and cost-of-living crisis have all affected people’s confidence. Still, we know that for the younger boomer generation, altruism and giving is very important, and that means that there is huge potential.

“Charities need to develop the kind of proposition that helps those supporters stick to an organisation and cause because – if you can get a share of that potential income from the increased deaths that we’re expecting over the next 15-20 years – then that really will make a huge difference.”

 

What does all this mean for legacy fundraising?

Highlighting the importance of internal buy-in for legacies, Alex McDowell, Director of Fundraising at Revitalise, said:

“For charities, the biggest challenge isn’t making the case internally that legacies are important, this has already landed. Legacies are the bedrock; people get that now. The real challenge is the harsh reality that money will go a lot less far and, when people are facing the decision of investing in big returns tomorrow rather than paying the bills now, that can be a tough call.

“There’s always going to be other income streams that will deliver more quickly. In this environment, we need to be even smarter about how we frame the need for legacy investment and in keeping legacies front-of-mind.

“For example, identifying where delivery of legacy messages can support other corporate objectives, such as brand awareness or supporter retention and or how the charities’ other activities can support or incorporate legacy messages.”

Reflecting on the success of a recent legacy telemarketing campaign in the current environment, Sanita Guddu, Legacy Specialist, highlighted that one charity she was working with had seen a 36% legacy enquirer conversion rate, saying:

“Legacy campaigns can be really powerful when we take time to understand our supporter base and respond to their needs. The results from this campaign were far higher than the norm and this was because everyone was spoken to as an individual.

“We need to stop looking at supporters as cohorts, based on where we think they’re at, and instead have one-to-one conversations where we can adapt and flex to each person’s situation.

“You need to find out what your organisation means to a supporter, explore their motivation and take it from there. It’s all about the individual and stewarding those relationships.”

 

Practical tips and recommendations

When it comes to the steps that legacy fundraisers can take in these challenging times, speakers highlighted the following points:

• Supporter stewardship is critical
  Appetite for legacy giving is on the rise, but times of austerity will likely mean that charities must work even harder to win the hearts and minds of baby boomers, and to stay front of mind. This means thinking hard about the donor journey, understanding what supporters care about and engaging effectively with them each step of the way. Telephone calls, in-person events, charity site visits and more can all be great ways to interact dividually and to discover what motivates your supporters, using these insights to build meaningful individual relationships to drive legacy conversations forward.

• Highlight that there’s no immediate cost to legacy giving
  At a time when personal finances are strained, reminding supporters that – with a legacy – there is no need for them to part with their donation just yet is a welcome benefit. Writing a gift into their Will is a deeply symbolic and wonderful thing to do, but any expense (beyond that of Will-writing) is far from the here and now. Research from Remember A Charity also highlights the importance of continuing to weave in the family-first message, so that a legacy gift is positioned as something supporters can do after taking care of their loved ones.

• Demonstrate legacy impact in the here and now
  Talk about the impact of legacy gifts on the organisation now and in getting through recent years, showing what your organisation has been able to achieve as a result of those gifts, and what this has meant for your beneficiaries. These powerful stories help to make legacy giving more tangible, making it even easier for people to understand and imagine the impact of their own gift.
  
  
• Collaboration is key
  When budgets tighten, sector collaboration becomes even more important, helping to amplify legacy messaging and grow reach. Working together, as we do through Remember A Charity, enables organisations to pool and share resources, to develop new ideas and spread the message of legacy giving even more widely.
  
  
• Strengthen the case for legacies internally
  At a time where charity budgets are under huge amounts of pressure, it’s even more important that the case is made for investment in legacies internally. This might need reframing in light of the economic backdrop, so revisiting that case and ensuring you are ready to draw on relevant facts and figures to deliver that case is key. This might include conversion rates for recent legacy appeals and the number of known pledgers, as well as return on investment. Draw on the rationale and case for legacy marketing featured in the Resilience Report below.

 

Useful Links:

Building Resilience with Legacies
To help build the case for legacies and demonstrate their importance in strengthening charities’ resilience – see our Strengthening Charities’ Resilience with Legacies Report, produced in partnership with Legacy Foresight, the Institute of Legacy Management and Smee & Ford. While this report was produced in 2020, the messaging and rationale for legacy investment remains relevant today.

Podcast: Legacy Fundraising Chat, Episode 11
In Sanita Guddu’s podcast series on legacy marketing, she includes a great episode on how to convince your Trustee board to invest in legacies. Tune in here.

Legacy Trends 2022 & Five-Year Forecast

For more details on growth trends in the charity legacy market and for what we can expect to see across the next five years, you can download the latest report for free from Legacy Foresight, part of the Legacy Futures group, here: Legacy Market Briefing 2022.

Picture source: Sarah Agnew (via Unsplash)