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Has the cost of living hit the will to give?

LEGACIES helps charities help others. Now legacy dons may need help surviving the UK’s cost of living crisis.

Charities are considering how inherited income could be affected by what money-saving guru Martin Lewis calls a “national financial cataclysm” that will unfold over the next few months.

The cost of living crisis has deepened since October 2021, with a global spike in wholesale gas prices, Brexit-related supply chain disruptions, Russia’s invasion of Ukraine and soaring rates of inflation.

How will inherited gifts be affected because parents think their children might need more? Are charities involved?

World Vision UK has worked with poor communities around the world since 1950, and its child sponsorship program has helped millions of people. Its chief executive, Mark Sheard, is a member of the Council of Archbishops.

The charity says it sees no change in legacy donations. Its director of public engagement, Ben Nolan, said: “In fact, we are seeing more and more people choosing to donate to World Vision in their will, and last year more than a million pounds were donated in this way.”

But World Vision UK does not take this for granted: “We are extremely grateful and continue to pray for all those facing a difficult winter, here and abroad,” Mr Nolan said.

He admitted that legacies were still vulnerable. “Because inherited gifts are tied to the value of people’s homes, if house prices go down, it could also reduce the overall amount people need to leave in their wills.”

The charity is seeing more and more people choose to leave a ‘residual’ legacy by specifying a percentage rather than a fixed sum for the charity. “So far, the economic crisis has not had a significant impact on our overall revenue,” Mr. Nolan said. But World Vision continues to monitor the situation.

Meanwhile, his job is harder than ever. “The world faces an ever-increasing number of crises,” Mr. Nolan warned: “world hunger, worsening climate change and armed conflict.”

The Children’s Society has been helping poor British households since 1881, when it was founded for ‘Waifs and Strays’. At the time, it was a Church of England Sunday School teacher, Edward Rudolf, who saw the effects of poverty on children and decided to do something about it.

Legacy giving remains one of the Society’s greatest areas of growth as it continues to help children. Director of Community Mobilization and Engagement, Lisa Jakimciw, believes that in times of uncertainty, people often focus on short-term spending rather than charitable donations.

Homeless Church Trust A recipient of Church Homeless Trust support chats with a member of staff

But growth in inherited income generally reflects the economy. “The inheritance market is forecasting a short-term reduction in income due to the expected decline in property prices, which is often an estate’s strongest asset,” Ms Jakimciw said.

“However, inherited income is very unpredictable, as only a very small portion of legateors actually make an active pledge during their lifetime.” It is therefore difficult for them to assess whether the cost of living crisis is already having an impact on inheritances.

While the Society is concerned about the effects on revenue streams, it knows that those who leave something within them will often have a close personal connection to it. Inherited decisions are considered over a long period of time.

“Strategically, we will look at longer-term opportunities with legacy giving, as we know our loyal supporters, closely tied to the charity, are unlikely to withdraw their long-term support – unless their circumstances change. significantly,” Ms Jakimciw says.

Tearfund has over 50 years of experience in international development. Its “strategic ally” is the Anglican Alliancewhich brings together development, relief and advocacy work within the Anglican Communion.

“God gave us responsibility for our families; so they need to be taken care of first,” Ruth Tormey, Church and Supporter Relations Manager, Tearfund. “But, even when we are going through hard times in this country, we are still wealthy compared to many of our brothers and sisters in the less economically developed countries where Tearfund works.”

She said Tearfund was “blessed not to see a decrease in legacies at the moment”, thanks to its supporters, who “give in a sacrificial way. . . to be the hands and feet of God in the world through the local church”.

Tearfund finds that people tend to make donations in their wills around seven years before they die. Thus, the charity would not expect to see a change in current inherited income just yet.

“When our supporters face pressure on their day-to-day finances, they often see bequests as a way to continue to demonstrate their belief that everything in this world is a gift from God,” Ms Tormey said.

The association is worried, but remains positive in its outlook. “Tearfund supporters remain loyal and incredibly generous,” said Ms Tormey. “We’re praying they do well in this tough economic season.”

Even if the inheritances remain stable, the demands on their resources are not. There are more and more calls for Tearfund to respond to difficult situations around the world. “The pound’s fall against other currencies and global inflation is a big deal,” Ms Tormey said.

Christians Against Poverty (CAP) has been providing free professional debt help through UK churches since 1996. The charity is listed on the ‘Community Agencies’ page of the Church of England’s national website in as a potential partner for congregations.

To explore the need, CAP commissioned market researchers YouGov to carry out a survey in the UK in August. Most respondents said they had been financially affected by the cost of living crisis.

It is estimated that nearly eight million people go without heat or electricity completely – and a similar number skip meals. Nearly 20 million people have completely given up on socializing and recreation.

“We are a relatively young charity. We have been going there for 26 years; our legacy revenue therefore represents a small proportion of our overall revenue,” said fundraising and supporter development manager Alex Jones. “But it has grown, and we’ve seen an increase in people inquiring about bequests and leaving gifts to CAP in their wills.”

World Vision/Ben AdamsEight-year-old Arya, a child sponsored by World Vision, is a third-year student in the development program in Nagpur, India.

Motivation? “People often think about what they want to leave for their family, but also have dreams and visions of what the world could be like – and want to do something with their estate,” Mr Jones said.

“We’ve benefited tremendously from people who have been fairly close supporters of our work, or whose family members have benefited from our work, and we’ve seen an increase in people wanting to leave this kind of gift.”

People are also changing their preferences for more general donations. They are reducing or even stopping donations. CAP has struggled to recruit new regular donors. “On the other hand, we’ve seen people move into more one-time donations,” Jones said.

He pointed to recent findings from Legacy Foresight, which uncovered a backlog of 24,000 probate cases at the HM Courts and Tribunals Service. Removing this blockage could free up a flow of funds to charities over the coming months.

The Church Homeless Trust has its roots in the 19th century work among London’s homeless by the founder of the Church Army, the Reverend Wilson Carlile. As an independent charity with no central church funding, it continues to give grants to the homeless.

The Trust had also worked on homelessness prevention; but he made the difficult decision to focus only on those who had already lost their homes.

Executive Director Miriam Morris said the Trust receives about five small bequests a year to help fund these grants. ‘Once in a while we’ll get one, like we had two years ago, for £350,000,’ she said. It was difficult to trace a trend, because the legacies came “unexpectedly”.

Ms Morris, however, believes we are witnessing the end of a generation of wartime single women who have been bequest givers. More and more people end up not leaving something in their will to charity.

For those who pass on a gift, it will be pecuniary and not residual: that is, it will be a fixed amount, instead of leftovers after the obligations of an estate are fulfilled.

“Residue was worth a lot more to us in the past because it’s basically someone’s house and shares and everything else,” Ms Morris said. “People who will leave something to us now are more likely to leave a pecuniary inheritance – just as a token gesture – then to leave the house and estate to relatives.”

She continued: “I don’t think the legacy benefits of charities will be as great as they have been in the past.”

The loss of regular donors – rather than legacies – is the big concern. “We have regular donors who have given to us every month for 35 years. During Covid they tended to be people who had more money as they weren’t going out. But with the crisis in the cost of living, they have to reduce their expenses. So we lost regular donors.

These donors were loyal for a long time. “Now they can’t afford to support us anymore because they don’t know how they’re going to pay their gas bill,” Ms Morris said. “It seems like a perfect storm.”

Strategy agency GOOD found that legacy campaigns are still crucial, as one in five charitable donors are likely to consider a legacy gift. But, as charities explained, the pressure is on.

CEO Chris Norman summed up the challenge: “The future of charitable giving is more uncertain now than it has been for many years, and at a time when demand for charitable services is growing rapidly.”

Clive Price is communications officer for the Methodist Ministers’ Housing Society, member of the Irish Music Festival Committee Iur Cinn Fleadhand director of his own media consultancy.

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