With the latest estimate indicating that charitable donations are worth almost £2.5 billion to UK charities, the legal profession is playing an increasingly important role in boosting vital funding to good causes.
These gifts are the lifeblood of many of the nation’s favourite charities, helping to fund cancer research, new hospital equipment, life-saving vaccines, guide dogs and much more.
Yet, as it stands, there is a disconnect between people’s appetites for legacy giving and behaviour. Our research shows that while over a third (35 per cent) say they’d be happy to leave a gift in their will, only 6.3 per cent of people actually do.
To address this challenge, more than 1,000 legal firms are now part of a growing movement that aims to ensure that their clients have the option of taking care of their favourite charities, once they have provided for their family and friends.
Evidence indicates that advisers who remind their clients of the option of including a charitable donation can treble the number of gifts made, according to research conducted by the Cabinet Office Behavioural Insights Team, 2013.
With charities feeling the stretch of an uncertain economic future post-Brexit and facing increased demand for services, the support of the legal profession has never been more important.
What is Remember A Charity?
With a consortium of over 160 charities, Remember A Charity is a nationwide campaign - working collaboratively with a range of audiences to raise awareness of legacy giving and help make it become a social norm. First launched in 2002, the consortium’s activity peaks in September each year, when the legal profession is encouraged to raise awareness of the opportunity of making a charitable bequest.
Backed by government and the Law Society, the campaign’s drive to encourage legal professionals to mention charities in the will-writing process is one of the most important areas of its work and it is making huge strides.
In our latest independent benchmark survey, two-thirds of solicitors and will-writers said they reminded clients about legacy giving, up from 53 per cent five years ago. During the same timeframe, there has been a 12 per cent uplift in the number of wills that include a charitable donation.
Opportunity for growth
While the number of people who leave a charitable gift in their will is increasing all the time, too many people still don't know either that they can include a donation in their will or that they have the flexibility to provide for their family and favourite charities.
We estimate that just a four per cent increase in people leaving a charitable legacy would mean an extra £1 billion for good causes.
Gifts in wills already fund five out of every nine Marie Curie hospices and one in six children in NSPCC care. Imagine what a difference it could make if legacy giving were to become a social norm.
What is changing?
The good news is that the appetite for legacy giving is growing. More than 37,000 people included at least one charitable gift in their will in 2015 and, typically, they donated to three different organisations.
Once seen as the preserve of the big traditional charities, legacies now enable many small, community-based charities to achieve incredible things for their beneficiaries.
Awareness of legacy giving is on the rise and people ultimately want to leave the world a better place and to be remembered for the things that really a matter to them.
Broaching the topic
The importance of professional advisers raising the issue of legacy giving with their clients is becoming more widely understood. In the past, there was some trepidation about talking about charitable donations, with some advisers uncomfortable with the concept of addressing what can be perceived as a sensitive or personal issue.
But, more often than not, we now find that solicitors are enthused about the topic and, above all, of ensuring that their clients are informed of all the options available to them.
It may be useful to explain to clients that charitable giving reduces inheritance tax. Tax incentives certainly help not only to motivate supporters, but give solicitors the framework to raise the issue when helping clients with their estate planning. These include inheritance tax exemptions for the sum of all charitable donations and a reduced rate payable on estates where more than 10 per cent is directed to charity.
Indeed, in 2013-14 around 1,800 estates qualified for a lower rate of inheritance tax (36 per cent rather than 40 per cent) by including charitable donations of over 10 per cent of the value of the estate, reducing their tax liabilities by £28 million.
How to get involved
During Remember A Charity in your Will Week, charities, government ministers and the Law Society are coming together to urge solicitors in England, Wales and Scotland to become campaign supporters, reminding clients about the opportunity of leaving a legacy donation and providing guidance on the various options for donating in this way. All supporters are featured on the campaign website.
Remember A Charity in your Will Week takes place from 12 to 18 September 2016. This year’s campaign encourages the public to consider what they will pass on to future generations, at #MyWisdom. Join the existing network of 1,000 campaign supporters by visiting the website.
Find out more about Remember A Charity
Find out about our Wills and Inheritance Quality Scheme