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Legacy Fundraising: The basics

  • By Abi Hart
  • 31st July 2023

Introduction

Legacy fundraising, also known as legacy giving, is an growing component of charity fundraising efforts. By encouraging individuals to include a charitable bequest in their will or estate plan, organizations can secure long-term financial support for their mission. In this blog post, we will discuss the basics of legacy fundraising, its significance and various types, and what money from a legacy could go towards.

What is Legacy Fundraising?

Legacy fundraising refers to donations that supporters plan to give to non-profits after their passing. Legacy fundraising is also commonly referred to as planned giving as donors often plan these gifts years before they are distributed to the designated parties. 

For many donors, legacy fundraising will consist of monetary donations, but some donors will give real estate or choose to set up a charitable annuity or trust rather than make a direct donation. While the specifics of each gift and how it is distributed will vary depending on the charity and donor these gifts can have the potential to supply charities with meaningful funds for years to come and honour the legacy of the donor who made the contribution. 

Why is Legacy Fundraising Important?

Legacy giving can benefit both nonprofits and donors. Donors who choose to participate in legacy giving can experience positives, such as:

  • The ability to cement their legacy. 

Legacy giving ensures donors will be remembered for their generosity and commitment to the nonprofit’s purpose long after their passing. This can be especially important to donors who may lack the funds to make a donation during their lives but can make the impact they want through a legacy gift.  

  • Tax breaks. 

Many wealthy donors join a legacy giving program both out of their commitment to their favorite nonprofit and the numerous tax benefits that participating can bring their families. 

  • Control over their donation’s use.

Often, donors hesitate to give to nonprofits if they are unsure what impact their contributions will make. With legacy giving, donors can add stipulations in their wills for how their gift will be spent. This can help donors feel rest assured that their legacy will be preserved the way they would have wanted. 

For nonprofits, why is legacy fundraising an important revenue source? It is because it:

  • Adds an additional revenue source for organizations to secure their fiscal stability
  • Builds an endowment to provide an ongoing source of income each year in perpetuity
  • Broadens your donor base to allow donors to make impactful gifts by providing a diverse way to give assets

Different Types of Legacy Fundraising

Legacy fundraising can take many different forms, providing flexibility for donors to choose the option that best aligns with their personal circumstances and philanthropic goals. Here are some common types of legacy fundraising:

Residuary legacy

The whole (or a specific portion or percentage) of an estate left over after making other specified legacies (typically to benefit family members, friends and other charitable causes). For example, you could choose to leave 99% to your family and donate 1% to charity. This type of legacy is the most valuable, as its value is unaffected by inflation.

Pecuniary legacy

The gift of a specific sum of money, for example £20,000.

Specific legacy

The gift of a specific item which might be used by the charity either in its original format (for example – fine art, collection items or rare books) or that could be sold and any proceeds used to support the charity (for example – property or land.

Reversionary legacy

Either a specific or pecuniary gift, or a residuary gift, that is left to another beneficiary in the first instance but will revert to the charity absolutely, usually after the initial beneficiary has passed away. This is a very common type of gift that couples or parents often consider, where a gift is set up as a Will Trust. The interest goes to the surviving spouse (or children) for their lifetime, and the charity benefits from the gift on the spouse’s (or child’s) death. Occasionally, there can be second intermediary beneficiaries (children or grandchildren), too.

Contingent legacy

A gift dependent on the occurrence of an event that may or may not happen. For instance, a legacy which only applies if other beneficiaries named in the Will die before the person who made the Will.

What money from a legacy could go towards?

Here are some examples of what larger amounts of legacy fundraising could fund here at Leeds Mencap.

£2,000 could pay for a year’s worth of activity workshops for all of our youth clubs, which enable young people with learning disabilities to try new skills and build confidence.

-£5,000 could pay for a year’s worth of development and communication activities that give very young children with learning disabilities the chance to improve their language and social ski

-£10,000 could pay for an entire year of our Friday Club, a club for 18-30 years olds with learning disabilities where they can try new activities and prepare for the difficult transition into adulthood.

-£15,000 Could pay for an entire year of our sibling’s support club which provides siblings of those with learning disabilities a safe space to have fun, try new things, and to make friends who understand what they are going through.

-£50,000 could pay for a year’s worth of nursery developmental play session, which gives the opportunity for very young children with learning disabilities to develop their personal, social, and educational skills.

Conclusion

Legacy fundraising plays a critical role in the sustainability and growth of charities. By cultivating long-term relationships with donors, charities can secure reliable, long-term financial support for their mission. Whether it’s through bequests, charitable trusts, or life insurance policies, legacy gifts provide opportunities for donors to make a meaningful impact while leaving a lasting legacy.

If you’re interested in leaving a legacy gift for Leeds Mencap please get in touch by emailing fundraising@leedsmencap.org.uk or by calling 0113 235 1331

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