Legacy incomes will continue to hold up as bequests grow over next decade, analysis suggests
Melanie May | 15 October 2020 | News
Compared to other income streams, legacy income will continue to hold up as the current crisis continues, and into the future, partly due to the increasing awareness of gifts in Wills according to Legacy Foresight’s latest analysis.
Legacy Foresight has today released its Legacy Market Briefing 2020 report, which includes insights about the shape of the sector today and some key long-term trends, based on analysis gained from the Legacy Monitor programme and its consortium of over 80 not-for-profit organisations.
The report predicts that charitable bequests will increase by almost a quarter (23%) over the next ten years, from 118,000 to 145,000. This rise is attributed to a rapidly rising death rate and the growing interest in leaving a gift in a Will.
Legacy Foresight also predicts that income will grow over the next ten years by 37% in current prices, to reach £4.7bn in 2029. This is lower than the 59% growth seen between 2009 and 2019, which saw rapid economic recovery following the 2008 global financial crisis, but represents real terms growth of 16%. The growth profile is also changing. Whilst throughout this period much growth was due to a buoyant economy, with the country now experiencing heightened economic and social uncertainty, it predicts that growth over the next ten years will be primarily driven by the numbers of gifts received.
Younger charities, those founded after 1970, are seeing the fastest growth rates. While the average contemporary charity in the top 1,000 legacy charity group receives just £1.2m p.a. in legacy income, that income has grown by 7.8% p.a. over the past five years. Medium (£1-8m p.a. legacy income) and large (£8-20m p.a.) legacy charities are reporting the fastest five-year growth rates, of 7.9% p.a. and 6.9% p.a. respectively.
Health is the largest legacy sector, accounting for 38% of the total. Animal charities account for 15%, international development for 9%, and conservation and disability both for 7%. On its own, RNLI accounts for a further 5%.
The fastest growing sectors however are international development (9.4% p.a.) armed forces (9.1% p.a.), animal (6.7% p.a.) and health (5.9% p.a.) charities.
Meg Abdy, development director at Legacy Foresight, said:
“Over the past three decades legacy incomes have grown 6-fold; and after taking inflation into account, incomes have trebled in real terms. That growth trajectory is likely to continue; we expect legacy incomes to double in real terms over the next thirty years.”
“Perhaps most importantly, legacy incomes will continue to hold up during the current crisis while many other income streams are plummeting. The number of gifts you receive, and in many cases their value, is not a reflection of donors’ current desire or capacity to give but is determined by supporter relationships forged over many years. That resilience makes legacy income fundamental to your charity’s sustainability during the pandemic, and through the tough years that lie ahead.”
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About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.