Freelance Fundraiser’s Jottings

12 November 2008

Signs of recession hitting charity legacy income

Filed under: Uncategorized — freelancefundraiser @ 12:06 pm

The first major sign that the current recession is having a knock-on effect on charities has come with the announcement by the NSPCC that it is having to shed 150 jobs, as a result of falling fundraising income.

In an article by Peter Davy in Third Sector online (12 Nov 08), Giles Pegram, the charity’s director of fundraising, told Third Sector it was becoming more difficult to recruit new donors and to upgrade existing supporters.

There was also a slight increase in direct debit cancellations, he said, but the most significant loss was £2m of legacy income, mainly because of falling house prices.

He said the charity had come through previous recessions relatively unscathed. “But there is something fundamentally different about what we’re going through at the moment,” he said.

“We’re still forecasting that we’re going to be on budget this year, but we know we’re going to struggle. We started looking at support and overhead costs, but we are having to go deeper.”

The fall in legacy income is likely to hit bigger charities much harder than smaller ones, as many of the big charities rely on large legacy income sums to cover a significant portion of their revenue income. Any drop in legacy income will have an immediate effect. Smaller charities, who limit their legacy target are less likely to be affected. If you have a lower target and exceed it, you can use the excess to build on reserves which will be very helpful in difficult times, such as these.

It’s the old story of not relying on just a few baskets for your income, but spreading out as many baskets as possible,so that you can look to others when one or two are struggling.

It will be interesting to see who else begins to feel the pinch if legacy values continue to drop.

The other side of the coin is that with only 16% of Wills containing charitable gifts, there are still 84% to be converted to include charities. So the need to keep raising the profile of legacies is as important as ever, especially in the current financial climate.


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