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Recent trends in Aust bequest giving show challenge to raise the ‘propensity’ of all donors

Pearl Dy October 3, 2019

3 min read

Include A Charity (IAC) has commissioned Legacy Foresight to analyse recent trends in Australian bequest giving, and explore the long-term outlook for the sector over the next 20 years.

This work builds on Legacy Foresight’s long experience of benchmarking, researching and forecasting the legacy sector in the UK, and more recently the Netherlands, together with a solid assessment of Australia’s own unique market trends and drivers.

The analysis was presented at a series of IAC breakfast briefings last September 2019 by Legacy Foresight Development Director Meg Abdy. It will be written up into a more detailed executive summary report for further dissemination by IAC.

According to this report, the outlook for the Australian gifts in wills sector is very positive. Because of the underlying demographic and economic factors, real incomes will more than double over the next twenty years. The impressive growth rates seen over the past decade have been boosted by Australia’s strong economic performance, impacting on the value of property and financial assets.

That economic performance is likely to be more muted, due to chronic uncertainties in the global economy. Instead, it’s numbers of bequests, driven by rising death rates and an increase in the number of child-free people dying which will underpin growth.

The report also showed the challenge for bequest fundraisers to raise the ‘propensity’ of all donors including those with children and less wealthy households to include a charity in their will. Based on the available data, there is no evidence that this has increased over the past 10 years.

Campaign Director Helen Merrick said: “Australians are extraordinarily generous, but giving has been going down across the board in the last few years. Charities need to look at other ways to encourage giving to provide the funds for their programs. Gifts in wills are important because people don’t have to give now, they can give a little something later, after providing for loved ones, when they are gone and don’t need it. ”

Merrick continues that this is an area that is often under-resourced or misunderstood by CEOs because it takes a long time to realise a gift, which is on average seven to 10 years to be realised, and it’s hard to show a direct return on investment.

Bequests are important to charities as they help them to continue their good work and plan for the future, says Merrick. “In some cases, they are crucial, helping charities to keep their doors open to the communities they serve. That’s why we have to look at the trends.”

Meanwhile, Development Director at Legacy Foresight Meg Abdy said: “Although bequests are such a significant source of funds, the proportion of Australians who leave a gift in their will is still too low.”

Based on both the Giving Australia report, Abdy said, only around half of all adults have a will and only 7-8% of people with wills include a charity. This second figure is echoed by Christopher Baker’s research on probate records.

She said there’s a need to work on two levels: to encourage more will-writing and to encourage people to consider adding a gift/gifts to their will.

“From what I see, some charities there are doing great work on asking their supporters for bequests and for ‘stewarding’ the people who actively respond. But there needs to be a concerted effort across the sector to encourage more will- making overall, and to raise awareness of the many benefits of leaving a charitable bequest. Include A Charity can provide the scale, reach and concerted thinking required to take gifts in wills to the next level,” Abdy added.

According to Abdy, bequest incomes are an important source of income for Australian charities. The latest Pareto benchmarking data show they represent 20% of fundraised income overall – for some charities this figure is far higher. And income appears to be growing fast. The Pareto data suggests 10% p.a. growth over the past 10 years, which is outstripping many other types of donation. But for individual charities, however large they are, bequest income can be very volatile year on year depending on how many large bequests they receive.

“Without a big picture perspective, based on aggregated data from across the sector, it’s very hard to see the value bequests are bringing. And we also know that spending on bequest marketing is low compared to many other forms of fundraising – just 3% of fundraising budgets according to More Strategic,” Abdy said. “Australian fundraisers need hard evidence about the long-term potential of bequest income to make the case for greater and more strategic investment. Too often, bequest fundraising is seen as an optional extra which can be switched on and off as funds dictate. There needs to be a consistent, imaginative, long-term commitment to bequest fundraising as an integral part of the marketing mix.”

Pearl Dy

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Pearl Dy is a community manager and journalist. She is passionate about business and development particularly involving not-for-profits, charity and social entrepreneurship.

Recent trends in Aust bequest giving show challenge to raise the ‘propensity’ of all donors

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