You can’t take it with you…

Money from gifts in wills is worth around £2bn a year to British charities, with legacies accounting for 5.6% of total income for the wider charitable sector, including the arts. Legacy giving specifically to the cultural sector remains low. However, in recent years arts and education organisations have enjoyed a rapid rise in legacy income – averaging 9.7% a year¹ – albeit from a very low base. According to Arts and Business’s recent report, ‘Arts Philanthropy: the facts, trends and potential’, legacies account for around 10% of private investment in the arts (compared to 13% of voluntary income for general charities) and just 1% of total income. Arts Quarter’s legacy fundraising survey sought to understand more about both the background to these figures and expectations of legacy fundraising within the sector.

Irrespective of whether arts organisations are actively promoting legacies as a giving opportunity, under half of those surveyed (41%) have received gifts in wills over the past three years. Among those who have benefited from this income stream, the numbers of donations received are generally low, with 77% of respondents receiving fewer than 10 bequests over three years. Of those organisations attracting legacy income, over half (51%) received less than £25,000 a year from this source. The relatively low numbers are hardly surprising given that just 38% had actively promoted the idea of legacy giving among their supporters. The most common reasons for not doing so were: lack of capacity (27%) more pressing priorities (21%) and a perceived lack of expertise (18%). A surprising 21% of arts organisations admitted that they had “never thought of working on this”, yet half of all the arts organisations surveyed reported that legacy income will be important to their organisation in the next five years. A quarter described it as ‘very’ or ‘extremely important’. Among the organisations already pursuing a legacy fundraising strategy, levels of investment are currently low. Almost half of the organisations pursuing legacies (46%) had made no discrete staffing provision of any kind, and were looking to resource their legacy activities as a modest adjunct to a current role in fundraising or marketing.

Respondents involved in music and opera were most likely to have received legacies, with 80% of them receiving gifts in wills over the past three years. Eighteen per cent of these organisations attracted more than £100,000 a year in legacy income. This good performance is a reflection of the legacy fundraising activities of this group, with 69% actively encouraging stakeholders and members of the public to leave gifts in wills. Forty-three per cent of respondent theatre organisations had received gifts in wills over the past three years. In this case, the number of legacies received and their value was relatively low. Just a third of theatres actively promote legacy giving to their supporters, with lack of capacity and conflicting priorities the main reason for not investing. Thirty-seven per cent of the museums and galleries surveyed had received gifts in wills over the past three years. One large, national body received more than £0.5m a year in legacy income. Just over a third (36%) of museums and galleries currently promote legacy giving – lack of capacity and perceived lack of expertise were their main reasons for not participating.

Well-established organisations are more likely than newcomers to benefit from legacies. Over three–quarters of respondents founded before 1950 had received gifts in wills over the past three years, with 37% of them enjoying annual legacy income of £50,000 a year or more. Over three-quarters of these older organisations actively promote legacy giving to their supporters. Conversely, only 12% of responding organisations founded after 1981 currently encourage their stakeholders to leave gifts in their wills, and only 19% of them had received any legacies in the past three years. Around 27% of respondent organisations founded after 1981 stated that they have never thought of promoting legacy giving.

Furthermore, the larger the organisation, the more likely they are to consider legacies to be an essential element of their future strategy. Seventy per cent of respondents with income over £5m a year and 57% of organisations with income of £1m–£5m a year felt that it would be important to their organisation over the next five years. Among the smallest charities surveyed, the story was very different. Only 5% of respondents conducted any form of legacy promotion, partly due to lack of capacity, but also lack of awareness.

By itself, more proactive legacy marketing is unlikely to provide a ‘quick fix’ to the funding issues facing the cultural community today. However, the levels of success reported by those arts organisations which are actively pursuing legacy fundraising, along with the impressive performance of many organisations in the wider charitable community, both suggest that legacies offer good potential to arts organisations in the longer term. Thanks to a combination of the prospect of a recovering economy and the large and affluent baby boomer generation entering their ‘third-age’, the medium-term outlook is good. Arts organisations are well placed to benefit from this surge in income, providing they can communicate their need effectively in what will become an increasingly competitive market.