LEGACY GIVING | The truth the whole truth and oops!

publication date: May 12, 2022
author/source: Richard Radcliffe, FCIoF Cert

Here is the challenge.

Donations and appeals: You send them out. You get a response. You know ROI. You measure success.

Legacies: You send the appeals out. The response is truly unknown. There is no urgency. It is private and there is no transaction. The contact/engagement may only be with the donor’s professional adviser. 90% will never tell you what they are going to do or when. Gift Value? Any percent of (residual) legacy value is unknown because we do not know what we will be worth when we die. ROI not known for 10+ years (so called evidence from university research centres around our globe who study inheritance planning).

So what is the truth?

That none of us will have a clue until we can interview the dead.

Here are the things that have worried me for the past 35 years:

• Do we measure wrongly?
• Misinformation results in bad investment.
• We make all the wrong assumptions from limited evidence.

In my view there is no such thing as watertight evidence. After 35 years the only thing I know for certain is that legacy income is growing globally. But, after meeting 35,000 supporters and gaining and evaluating their insight, I can share my experiences.

The so-called “evidence” (I have limited space but could go on for chapters!)

1. Is evidence from neuro-science watertight? Certainly not.

I have always doubted USA evidence gained through neuroscience on the importance of “pledgers” as the most emotionally engaging voice. It is very un-British, but in my experience when meeting donors: also very un-European, un-Australian, un-Canadian.

So, it was with some interest that I read the latest “Brain Wide Association Studies” (BWAS) research on MRI scans and fMRI (the latter measures blood flow changes to analyze which regions of the brain are more active than others).Professor Scott Marek of Washington University in St Louis Missouri seems to have proved the inaccuracy of most MRI/fMRI scanning due to differences in cognitive ability, levels of being an introvert or extravert, state of mental health and education as just some examples.

“There’s a lot of investigators who have committed their careers to doing the kind of science that this paper says is basically junk,” says Russell Poldrack, a cognitive neuroscientist at Stanford University in California, who was one of the paper’s peer reviewers. “It really forces a rethink.”
Not every academic expresses their views so provocatively but evidential certainty of MRI/ fMRI research seems to be in serious doubt.
Marek’s research covers samples of 25,000 to 32,000 scans and is not finished.

I am certainly NOT an academic and I don’t have enough academic knowledge to analyze the full results of Marek and his partners. I am a practitioner who likes to listen to donors and hopefully (but not certainly) interpret their views accurately which is hardly rocket science.

2. UK Statistics from Smee & Ford. Are they useful? Yes. Are they the whole truth? NO.

For almost 15 years I ran this company which sees every Will and therefore every legacy. It provides unique evidence. I started a death screening service at S & F – the primary reason for charity clients was to measure pledger fulfilment rates.
Some examples of S & F statistics:

  • Average time from date of Will to date of death: 6.7 years. The vast majority of people do NOT die 6.7 years after their last Will. This also excludes the “thinking time” concerning estate/inheritance planning before having a new Will.
  • Average gift value: £24,000 but this varies for each causal area, each region and the profile of a non-profit’s legator. Legators to universities and arts organizations often bear no resemblance to legators for mental health or animal non-profits. And the percentage of legacy income for each animal charity depends on so many variables that I have no space to go into!
  • Pledger fulfilment: average in UK is 43% but ranges from 2% to 68%.

I could go on and on. And before you ask, any evidence you have (wherever you are in the world) is GOOD – but for what purpose? Certainly not to guide/inform your strategy accurately. But statistics are useful for leaders. For example: the average legacy is the equivalent to a donor giving monthly CAD$8 or USA$6.50 or €7.5 for over 400 years.

3. My own evidence. Is it watertight? No.

In most countries where I have met donors (in particular Australia, Canada, USA, UK and some parts of central, northern and southern Europe) 38%-58% of supporters are going to, or have already, put nonprofits in their Wills. And let’s remember we are primarily interested in people who are current supporters - donors and volunteers, even staff. I am NOT interested in the young or those with no assets of any kind.
Legacy giving is increasing in almost every country around the world.

72% of HNWI I have met are worried about their financial future. They might inherit a fortune but their longevity, future care costs, family financial and partnership fragility (of children and grandchildren) concern them and causes uncertainty. This is one major reason they like legacies and NOT always major gifts – because a legacy costs nothing now.

90% will never tell a nonprofit what they are going to do because they might change their mind, they don’t want to be hounded, and they consider the decision to be private.

Great fundraising is driven by common sense and gut instinct.

Are you just a fundraiser/consultant or are you also a donor? What works for you? It might work for others too.

One of the biggest challenges we have is getting younger fundraisers to understand, and get into the mindset of, an older donor (such as me). I did not understand the legacy market when I started 35 years ago, but at 68 I have far greater understanding and empathy for prospects than I have ever had before. But, I also am reminded daily that not everyone is like me!

The other challenge is to convince leaders of the need to trust donors to do a legacy to the same degree that donors trust their charity.

Richard Radcliffe, FCIoF Cert is founder of Radcliffe Consulting and has worked with over 500 nonprofits around the world. He does practical research, develops practical action plans and trains anyone to make the ask nicely (to date about 40,000).

Home page photo by NASA Unsplash.

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