Bequests: The Next Big Thing

By Eleanor Cater, FINZ Newz Viewz July 2016

The whisper is getting louder; effective bequest fundraising is becoming more and more important to many a charity's long-term financial sustainability.

As Sean Triner commented at the 2016 FINZ Conference in his 'State of DONation' speech: bequests are the next big thing and it is in this space that charities should be getting active now in order to ensure future sustainability. Sean, co-founder of Pareto Fundraising, believes that New Zealand charities are not very good at seeking bequests, and that those actively working in this field are the ones reaping the rewards. Boards and management need to be looking at longer time frames, "at least 10 years - and planning for their bequest fundraising strategies. The key is to stop thinking that bequests are a miracle and strt thinking of them as a good option for your investment portfolio."

With this in mind we asked some of the wisest bequest fundraising heads in New Zealand - Jim Datson, Dwyllis Brown, and Anne Wright - for their views on the traditional importance of bequest fundraising in New Zealand and where they see the future for this specialist form of fundraising.

How important has bequest fundraising been traditionally to charities in New Zealand?

Jim says that traditionally (up until the 1980's) bequests were a main source of fundraising revenue for well-established traditional charities. "They didn't even need to be sought in many cases. Charities could simply receive them. For some, it was the predominant - and a few cases almost exclusive - fundraising revenue stream. Universities, Churches, and the most prominent of Charities (St John, Red Cross, Foundation for the Blind, SPCA, CCS, IHC, etc) were the main beneficiaries". Anne agrees, "Bequests have been the lifeblood of many charities for years. These gifts often arrived quite unexpectedly as charities have no formal bequests programmes in place." Dwyllis add, "Traditionally donors were never actually asked for a bequest so the income did not always meet the financial expectation".

What are the latest trends for charities in terms of having bequest fundraising as part of the mix?

Jim says that this needs to be answered within the context of overall fundraising. "Professional fundraising is a relatively new phenomenon and so all forms of fundraising have grown and blossomed in only the last 20-25 years. The most growth coincided with the computerised ability of large-scale targeted appeals. It was so successful in raising money that many other forms of fundraising were either ignored or simply not needed." Dwyllis agrees that changes have been steady. "What we now see is organisations sending out mailings, visiting donors, and explaining the benefits a bequest can make to the future of the organisation. Many organisations now actively promote what a difference a bequest can make." Anne believes that, with the introduction of Include A Charity three years ago, with the aim make charity gifting in Wills a social norm, more and more charities are realising the importance of promoting bequests to their donors and the message is getting louder.

How important do you think bequests will be in the future to charity sustainability?

Dwyllis says, "Bequest fundraising brings in the biggest gift for the least investment so is therefore the most effective form of fundraising." Jim agrees, saying, "For some charities, they will continue or become a very significant source of gifted income. Each year in recent times, only about 750 Charities have received any bequest income from a total pool of over 27,000 Charities. That pool may well grow over the coming years but only to the extent that bequest promotion is effective." Anne believes that bequests are vital to the long-term financial sustainability of a charity. "The more opportunities you can offer your donor to support your charity, the better."

Is it worth charities putting their time and resources into developing a bequest programme?

Jim says yes, absolutely however it does require some investment. "You have to till and prepare the soil before you can plant the seed... and nurture the young plant through to maturity...and thin and prune to allow the best fruit to grow... all before you harvest the fruit and reap the reward. Bequest fundraising happens to have a longer lead-time - more like a fruit tree than a tomato plant. However, both need the same care and attention even though one fruits in a matter of months and the other takes years. Bequests can provide significant income for comparatively little financial investment." Anne also believes that bequests are largely an untapped source of income and many charities are missing out on this valuable opportunity with their supporters. "A bequest is usually the largest gift a donor will make to a charity, so why wouldn't you invest time and resources in order to ask your loyal donors to consider supporting you in this way?" She quotes the results of a recent analysis by AskRIGHT of the audited financial statements of over 20 charities in Australia, showing that Bequests have the highest ROI (at 56%) followed by Major Gifts (33%), then General Donations (19%).

What is the impact of Include A Charity* (IAC) and how can membership assist charities seeking to work in this fundraising space?

Jim says, "The rationale for establishing Include a Charity centres around the discovery that only 7% of people think to include their favourite charities in their Will. That 7% however generates around $200m per year for New Zealand Charities and IAC New Zealand was established to lift that percentage as IAC Australia has managed to do." Anne and Dwyllis agree that charities of all sizes can benefit from membership and IAC's promotional campaign encouraging New Zealanders to leave a charitable gift in their Will, as well as focusing on the upskilling of fundraisers in this highly specialised form of fundraising.

Do fundraisers in New Zealand face an added challenge of convincing their Board and management of the importance of bequest fundraising investment?

Dwyllis believes that all charities could become effective bequest fundraisers adding, "It is certainly important that it is made a part of a charity's fundraising strategy". Jim agrees and says, "Most charity Boards and management teams struggle to find sufficient funds to allow the organisation to meet the current demands of today. The reality is, of course, that if they don't invest, the chances of receiving bequest income in this competitive fundraising environment plummets. The answer lies in continuing to advocate for some investment in bequest promotion, which is where Include A Charity fits in and is so important to many charities." Anne agrees, "There has been a lack of statistics on the outcomes of bequest fundraising in New Zealand, plus the fact that the financial benefits are long-term can make it difficult for Board's and CEO's to implement resources and develop this area of fundraising."

For further information on membership of Include A Charity, a collective of charities promoting gifts in Wills (or bequests) and focusing on growing this income stream, email eleanor@finz.org.nz