How can you ethically attract legacies for your charity?
Gifts in wills
The benefits of an effective gifts in wills fundraising campaign can be enormous. In our experience, gifts typically amount to a few thousand pounds but the sky is the limit with gifts of hundreds of thousands and sometimes millions arriving as windfalls to a charity. People also often choose to leave a share of their estate to a charity or specify the charity as a “beneficiary of last resort” in the event that they are the last living member of their family. These residuary gifts can be a significant proportion or even the whole of all of the worldly wealth a donor leaves behind.
There is a gap between the number of people who say that they would like to leave a gift to a charity in their will and the number of gifts actually given. Almost a third of people surveyed said that they would like to leave a gift to a charity but only 6% of wills actually contain such a gift. This should provide charities with all the incentive they need to contact their supporters to ensure that supporters are given ample chance to provide their charity gifts.
Since the tragedy of Olive Cooke Charities have been under an increased spotlight when it comes to fundraising. The fact that charities require funding is uncontroversial, however the balance between the pressure of the fundraising “sell” and reputational risk to the charity has become a matter of vigorous debate.
Points to consider:
Risk of offending or alienating donor/ supporter
There is always a risk of making one ask too many of a supporter and overstepping the boundary between inviting the donor to increase support and irritating them. The invitational nature of most well-structured campaigns should mitigate this risk.
Risk of challenge to the will
A donor may wish to leave money or a share of their estate to a charity but every penny given to a charity is less for other residuary beneficiaries (usually family). Not all family members will have the same moral compass as the donor and legal challenges to gifts can happen. As the size of the gift increases, so does the incentive to a disgruntled relative to challenge. Grounds for challenge are limited only by the imagination of the challenger and their legal team however common reasons include undue influence and care of dependents. You can mitigate the risk of undue influence by adhering to the Fundraising Regulator’s guidance. Where there is a legitimate claim on the behalf of a person who was dependent on the donor (especially where they have not been adequately catered for) a charity may wish to take a view on whether to defend a claim.
Risk of failure: losing a potential gift
As mentioned above, gifts in wills fundraising can touch on the sensitive subject of the donor’s mortality. If not handled well, a charity could lose a potential gift. Conversely, if the option to give a gift is not presented to a potential donor, a charity could miss out on a gift that the donor would have otherwise wished to give. This is an unusual point, but as a will writer, we feel that it is important that everyone who wants to leave a gift after their death is able to do so. This process starts with being informed that leaving a gift in their will is a possibility (something that not everyone knows).
Issues around charity paying for will of donor
Where a charity pays for the donor’s will, particular care should be taken not to overstep the line between advice and instruction. There should never be an obligation on a donor to give to a charity for legal as well as ethical reasons. Where a donor is given a will by a charity, the charity must have documented processes that are rigorously followed that can demonstrate that the donor is not being leant on in any way. The charity must also ensure that it is not seen to be advising the donor on what they should do or limiting the donor’s choice. This could lead to problems if, for example, a charity does not provide adequate choice of providers which could lead to a charity using a simple will where a tax-planning will would have been more appropriate. We therefore always suggest providing an option for a donor to consult a STEP qualified solicitor or legal executive as well as using an online service.
Guidance should be drawn from the Fundraising Regulator and the Charity Commission who have issued clear guidelines). When considering these though, thought should be given to the spirit as well as the letter of the rules.
We have set out our compliance guide here.
The reasons behind the rules are:
Avoid undue influence – as alluded to above: for legal and ethical reasons it is considered bad form for a charity to pressure a potential donor into providing a gift in their will.
Mitigate risk of challenge – where undue influence can be shown to have occurred a disgruntled family member would be able to challenge a will.
Protect reputation – in this day and age, with social media and rolling news reputations can be lost in a matter of hours. Dealing with a donor’s grieving family can be challenging and sensitivities and emotions may well be high. Adherence to the regulator’s codes will provide peace of mind to fundraisers that they are following best practice.
The aim is always to run a sustainable legacy fundraising campaign. By considering the individual sensitivities of donors, the age, Fundraising Regulator guidance, and avoiding undue influence in the will-making process: you should be able to develop a campaign that will educate donors and allow them to provide a gift that will continue to assist your charity once they have died.