Legacy giving will “hold up well compared to other income streams”
Legacy Foresight has released its Legacy Market Briefing 2020 report to the sector, sharing 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 leading not-for-profit organisations, some key findings are as follows:
1. Long term bequest numbers will climb
Legacy Foresight predicts that over the next ten years, the number of charitable bequests across the UK will increase by 23%, from 118,000 to 145,000.
This rise is fuelled by the rapidly rising death rate and the growing interest in leaving a gift in a will.
2. The sector is becoming younger and broader
Charities founded after 1970 are seeing the fastest growth rates. The average contemporary charity in the top 1,000 legacy charity group receives just £1.2m p.a. in legacy income, but that income has grown by 7.8% p.a. over the past five years
Medium (£1-8m legacy income) and large (£8-20m legacy income) legacy charities are reporting the fastest 5-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. Other important sectors are animal charities (15%), international development (9%), conservation (7%), and disability (7%). Meanwhile, legacy super-brand RNLI accounts for a further 5%
The fastest growing sectors 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.
3. The 10-year outlook remains strong
Over the next ten years, income will grow by 37% in current prices, to reach £4.7bn in 2029.
This is lower than the 59% growth seen between 2009 and 2019 – a period of rapid economic recovery following the 2008 global financial crisis – but represents real terms growth of 16%.
In comparison to the past 30 years, the growth profile is changing significantly. Throughout this period much growth was thanks to the buoyant economy. In contrast, in an era of heightened economic and social uncertainty, growth over the next ten years will be primarily driven by the numbers of gifts received.
Meg Abdy, development director at Legacy Foresight, says:
“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.”
For more information, the Legacy Market Briefing 2020 report is available from www.legacyforesight.co.uk.