Legacies - percentage of income

S. H.---I believe Rachel is correct. There are indeed far too many variables at work when we search for a common percentage of legacy income as it is related to an organization’s annual income, regardless the latter amount.

Certain types and size of organizations might be more aggressive or passive than others as they promote or neglect legacy giving programs. Legacy donor loyalty is a major factor as well. For example, university alumni, or very grateful hospital patients will be more likely to enter into legacy agreements than say, patrons of an orchestra, or donors to a foodbank. The short or long history (and stability) of an organization would play a large part as well in whether someone would provide a legacy gift, which is, after all, one made in “perpetuity.” One would “invest” by way of a legacy promise far more with an organization having a past, knowing the chances are good the organization will have a future.

Any such percentage or ratio could only be useful (perhaps) internally for an individual organization itself collecting such comparison data from year to year. And the organization’s annual income total would require the consideration of the amount which is earned (from fees, etc.), and funds which are true contributed income. Even then, any forecast to the next year is dubious at best. Why is that?

I think the main reason for such percentages to be next to impossible to ascertain, simply has to do with such income depending on the demise of people. I see no reason why it should be any different in the UK, as in the US, where about 70% of all legacy gifts are in the form of bequests. So any short or long-term forecasts of legacy giving to establish any percentage of anything, depends on when those legacy gifts are realized.

To make the percentage-seeking quest still more of a search in vain, from my experience, far more legacy gifts from bequests are surprise gifts. Even when we know a potential benefactor has named our organization in her or his will, quite often we do not know the amount we could receive. Others providing for us in their estate plans often ascribe a percentage of the final estate proceeds to come to us---a number we could not possible know. As well, what we are told today about a legacy gift provision from a future bequest, could later be changed to remove us, and we would not know it.

I think you will find it is not as simple as just applying a percentage based on annual income. I've worked for a few charities and income levels from legacies has varied wildly. It has less to do with your income levels and much more to do with the sort of charity you are. For example local hospices will raise most of their money from legacies and community fundraising, and generally won't win large donations from national corporate pots, whereas charities working with urban issues tend to win the corporate money, but don't have a high level of legacy income.

Of course these are just massive generalisations - I'm sure someone from a hospice will follow this post with tales of a corporate win- but I think it shows that you can't place a formula on these things.

Rachel Thomas
Corporate Fundraiser
The Stroke Association