Strengthening Charities Resilience With Legacies Report

In November 2020, a joint report was published by Legacy Foresight, The Institute of Legacy Management and Smee and Ford, which focussed, in part, at raising awareness amongst smaller charities of the importance of legacies to them. It predicts a rise in the medium term of legacy income for charities.

The report contains comments from a number of prominent individuals in the sector, including Allan Freeman, the Chair of Remember a Charity, who states:

“The pandemic has had a devastating impact on charitable income, lives and livelihoods, making gifts in Wills all the more important for the sector’s recovery. But it’s also brought us to a pivotal moment when it comes to growing legacy giving.

“At the cusp of the biggest intergenerational wealth transfer of all time, the coming years have long been predicted as an exceptional opportunity for legacy giving. Now, with such a marked increase in the public’s appetite for Will-writing, that moment is further magnified.

“In the next year alone, people will make up their minds about which charities should receive billions of pounds of legacy income. Charities that remain front of mind in the legacy market, those that collaborate to grow that market and that inspire their supporters to consider leaving a gift in their Will, will surely be those that gain the biggest share. This is a unique opportunity not only to normalise legacy giving, but to provide a more resilient financial core and to ensure UK charities can continue to provide critical services for future generations.”

His comments are not surprising when the report confirms that legacies are responsible for:

“Raising £3.4 billion annually or 16% of all fundraised income, legacies have become a fundamental part of the UK giving landscape. More than 10,000 charities benefit from gifts in Wills each year and charitable Will-writing is growing fast.”

Further, the HMRC figures for 2017/2018 for donations to charities by way of legacy from High Net Worth individuals showed that donations of more than £1 million each increased from the preceding year by 31%.

What is clear is that those charities that actively get themselves in front of testators over the next few years are likely to have a positive outlook and that the effect of the coronavirus pandemic on those charities will therefore be short-lived.

The risk of challenges to charitable legacies

This is obviously fantastic news for the sector but the report does not list as a potential threat the risks associated with challenges to Wills by the relatives after death. This is a significant risk and it is surprising that this has been overlooked as a significant threat to the potential income that legacies can create. This is surprising when most practitioners dealing with contentious probate matters have reported an increase in the number of cases year-on-year (in this regard, have a read of this article).

So if charities are intending to invest in raising their profile with a view to increasing their legacy income in the long term, it is important that at the top of their profile raising activities is to ensure that testators seeking to leave charities a legacy are properly advised by expert firms of solicitors so as to give them the best possible opportunity of the legacies being enforceable. In this regard, we work very closely with a number of large charities in terms of the legacy income drives.

Challenges Charitable LegaciesHow Nelsons can help

Kevin Modiri is a Partner in our expert Charities team.

Should you be responsible for moving charitable purposes forward and wish to discuss this with a solicitor, please contact Kevin or another member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.