Legacy giving: the role of the practitioner

charity jarOn 18 October, my colleague Beatriz Brockhurst (STEP News Editor) and I attended the launch of Legacy Giving and Behavioural Insights – a research report which examined how will writers discussed charitable giving with their clients.

Bridging the gap

The research illustrates the gap between clients expressing an interest in leaving charitable gifts (35 per cent) and those who actually do so (6 per cent). The event considered the ways in which practitioners can encourage greater giving by testators, drawing on evidence gathered from eight law firms and 31 solicitors, as well as 2,600 wills that were analysed during the two-year study.

Having the conversation

As a starting point, professionals should be talking about charitable legacy with their clients as part of the will preparation process.

But are clients comfortable with having this conversation? The study found that 69 per cent of clients generally deemed it acceptable for such a topic to be raised – and 46 per cent regarded it as the duty of the professional to mention it.

Different approaches

The research trialled three different ways of talking to clients about charitable legacies:

  1. Social norm framing – informing the client that charitable bequests was something many people did, and to ask if they would like to do the same. Legacy giving increased by 40 per cent for people making their first will.
  2. Emotional framing – asking the client to think about charities they or their families were passionate about, and/or had benefited from. This type of messaging was found to increase donations from clients both with and without children.
  3. Posthumous benefit framing – highlighting the good work that would result from a charitable bequest. This was regarded as the least acceptable and least effective form of messaging.

Tax incentives

The study also found that, in most cases, the tax advantage of legacy giving due to inheritance tax thresholds was not a motivating factor.

A TEP’s perspective

Jo Summers TEP, a member of STEP’s UK Practice Committee, offered a practitioner’s point of view. She emphasised the need to broach the subject of charitable legacy carefully and sensitively, not least to protect against being regarded as having exercised undue influence. Jo cited the initial client questionnaire as a good way to introduce the topic, with scope for a further conversation, if the client indicated this would be appropriate.

Practitioners also need to be aware that the charity the client would like to leave a donation to could change over time. As a practical solution, Jo suggested the will could contain a clause stating a percentage legacy, or a fixed sum to be split between charities chosen by the executors, with a letter of wishes to indicate where the money should be donated, depending on the client’s family circumstances at the time of their death.

Conclusion

The study concludes that will clients are generally open to having a conversation about charitable legacy. Practitioners can therefore play an important role in raising the level of charitable donations as legacy gifts.

The report offers interesting behavioural insights around legacy giving – I encourage you to read it:

 

Sean Smith, STEP Policy Manager

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