This blog post was updated on 7 September 2022 as part of our ‘Remember a Charity Week 2022’ campaign.
It is well documented that legacies in wills are a vital source of income to the charity sector. Over £3 billion of legacy income is generated for charitable causes each year.
Including a legacy to charity in your will may not be right for everyone but a lot of people do have causes that they are passionate about and want to support during their lifetime and after their death.
There are a number of different ways that you can include a gift to charity in your will-
• A pecuniary legacy – this is a gift of a fixed sum of money, for example £1,000;
• A specific legacy – this is a gift of a particular item such as a painting or even a property;
• A share of your residuary estate – this would mean that the charity would receive the funds left in your estate after any gifts, funeral expenses and other debts are paid.
Some people may have reservations about including a small gift to a charity in their will because they might think that gifting a smaller sum is not worthwhile and the gift may get eaten up in administration costs.
It is true that the charity will have to incur some administrative cost dealing with the legacy and this will impact the amount that passes to the charity. However, charities often have dedicated legacy officers whose job is to ensure that the sum passing to the charity is dealt with efficiently so that the maximum amount is available for the charity to continue with their good work. If this is something that concerns you, you may wish to reach out to the charity that you intend to benefit and seek some more information from them about how they deal with legacy income.
There are other benefits to leaving a gift to charities, such as potential inheritance tax savings, which have been discussed in other blogs this week.
Legacy giving, though, is not always about the financial aspect. To many it is more than leaving a monetary sum but about supporting a cause that is important to them or saying “thank you” to a charity that has helped them deal with a difficult time in their lives.
The work carried out by charitable organisations has done a great deal to improve medical advances and understanding in relation to certain illnesses. This in turn has helped with the survival rates for illnesses such as cancer. Cancer Research UK is the largest independent research organisation in the word dedicated to fighting cancer. Survival rates for cancer in the 1970s were around 24% and they are now around 50%.
Approaching legacy giving with a mind-set that it is not worth leaving a small sum, could potentially endanger the very essence of legacy giving. If all prospective people looking to prepare a will adopted this approach, legacy income, which is so essential for many charities, could drastically reduce and hinder their ability to achieve their charitable aims and proceed with the essential research and development work which will help generations to come.
