Are will-writing firms wrong in their reporting of money raised for charity?
Legacy consultant Richard Radcliffe and Jon Brewer, founder of Bequeathed, look at the two sides of the question of whether will-writing firms are correct in how they report how much money has been raised for charity.
I have no intention of pointing fingers at specific Will writing firms or solicitors. This is not a personal vendetta. My objective is 100% clear: any claims about “money raised” should be based on fact, not fiction or even future potential.
Having advised hundreds of charities on promoting legacy giving around the world for over 30 years I could easily claim I have helped raised billions of pounds. But in my view have not! I have facilitated action and then leave it in the hands of charities and their supporters. I would also hope that not one legacy fundraiser would ever say how much he/she has raised from legacies. Many of the gifts will have been put in Wills years earlier!
Supporters have the freedom of choice as to whether to leave a gift in their Will. This element of choice does not have a fluent journey through life.
There are times when our personal circumstances change, and we have to take a gift to a charity out of our Will.
We typically get our first Will in our 30s and this is a quick relatively thoughtless Will. But sometimes charities are remembered due to a personal family experience.
Our second Will is usually just before or after retirement. This Will involves a lot of thought and takes time to prepare: family circumstances, health issues and tax avoidance can all play a role. But the testator will NOT look at his/her Will drafted 30 years ago – it is an irrelevant document.
As we grow older our charity relationships and loyalties change. When combined with the change in family circumstances the results can mean that some charities are replaces with newer charities, and that to ensure family needs are fulfilled the legacy might be a conditional legacy or even a contingent legacy – the latter being when the charity only receives the legacy if the whole family is wiped out.
With future care costs strongly etched on the brains of baby boomers they might change from giving a cash legacy to a residuary legacy so everyone gets something. But what is that “something” be. Do we really know when we are going to die or how much we will be worth by the time we die?
Families are also changing more than ever before with step-children and divorce increasingly common and necessitating a Will change.
The frequency of Will changes is fascinating to witness in focus groups. With the end of final salary pensions, and all the above influences, a Will is less permanent than it was 30 years ago.
In addition, the use of a codicil is almost non-existent. Letters of Wishes are more flexible and can be easily changed. It was interesting to recently hear a solicitor in one of my research assignments say “the advantage of a Letter of Wishes is that it gives added evidence of the personal wishes of a legator”.
So, we end up with a whole load of uncertainties. Given this scenario how on earth can any firm of Will writers say “We have raised over £100 million for charities” or “in 2018 we raised over £47.3 million for charities” or “£284 million raised in future income”? But it has not been raised – and might not be received in the future.
If a charity made such questionable or untrue claims a complaint would be made to the Fundraising Regulator. But Wil writing firms lie outside their remit. We need to find an answer so that the truth is told, and information fairly expressed.
Have multi-millions been raised in the last year or two as claimed by will-writers? Almost certainly not.
Is that a problem? Does it require action? I’m not so sure.
At Bequeathed, we don’t use sums raised or pledged in consumer marketing. If we did, then we might make a headline claim such as “we raised £10m for charity in 2019”. It wouldn’t be wrong. But it would be incomplete.
With an average age of 53, most users of our online software are still alive. So most money has yet to be raised. In 2019, users pledged £9,988,004. £9,618,749 of that was residuary. So that will keep pace with inflation. But that calculation is based on estimates from users of the value of their estate. Those may or may not be accurate. Estates may increase or decrease over time. £5,719,750 of those gifts are also subject to a spouse or partner dying first. And they may never vest at all.
So, a headline claim of £10m raised would certainly include some salesman’s puff. But would it be misleading without all the detail? I think it could be regarded as a fair indication of the impact consumers can have when they make a Will. It may even help add to the social norming proven to increase legacy giving.
There is a risk some will-writers go beyond marketing hyperbole about sums raised or, indeed, other elements of their service, as they seek to stand out.
However, I also think that the reason why more will-writers are placing charity at the heart of their consumer proposition creates the opportunity for the third sector to help reduce that risk.
Aligning with a charity softens a company’s consumer positioning. It resonates with the social conscience consumers have. It builds credibility and increases awareness. Those attributes are highly valuable, especially when entering a market with a new solution in which one needs to build trust.
In the evolving Will-writing market, charities are also fabulous distributors. They invest in legacy marketing actions in order to increase the potential of future gifts in Wills. Those same actions deliver new customers to a Will-writer, not only for a will but for whatever upsell the Will-writer offers.
As the supply of Will-writers seeking distribution and promotional relationships with charities increases, so charities’ power to demand high standards from them is strengthened. Requiring evidence for each of the statements that a Will-writer is asking a charity to help it communicate to supporters is vital for protecting reputation. Doing so will also help moderate how far Will-writers feel they can push boundaries in the claims they make to consumers.
Richard Radcliffe FInstF Cert is a legacy consultant and Founder of Radcliffe Consulting. He has spent more than 40 years in fundraising, which includes more than 30 years specialising in legacies.
Jon Brewer is the Founder of Bequeathed. He has 27 years’ experience in legal services. Bequeathed provides legacy fundraising services to charities and business development services to law firms.