Director, Remember a Charity
Leaving a donation in your Will is easy to do, inexpensive — and on the increase. There’s never been a better time to do it, either, thanks to a government U-turn on probate fees.
We live in politically uncertain, cash-strapped times, so you might think the public isn’t donating to good causes as generously as it once did.
And that’s true to a point. A 2019 survey by the Charities Aid Foundation discovered that between 2016-2018 there was a steady decline in the proportion of people giving money to charity, either by donating or via sponsorship.
Yet there is one area of giving that is bucking the trend — and that’s charitable donations left in Wills, otherwise known as legacy giving.
Scottish charities are raising almost £72 million annually in this way, and legacy income is also on the rise in Wales.
Meanwhile, 40% of the public say they would be happy to leave a gift to charity in their Will, up from 35% in 2008. In fact, legacy donations raised £2.96 billion for good causes in 2017 and are predicted to reach £3.4 billion by 2022.
There has never been a better time to leave a gift to a charity in your Will, because the government recently announced it was scrapping its plans to increase probate fees.
“People realise that leaving a gift to a good cause in their Will isn’t a preserve of the rich — it’s something anyone can do,” says Rob Cope, Director of Remember A Charity.
“They also know this type of giving is vital to charities and simple to arrange. If you haven’t got a Will it’s easy and inexpensive to write one with the help of your local solicitor, or make changes to your existing Will if you want to include a charitable donation.”
Plans to increase probate fees have been scrapped
There has never been a better time to leave a gift to a charity in your Will, notes Cope, because the government recently announced it was scrapping its plans to increase probate fees.
If proposals had gone ahead, estates of more than £50,000 would have paid between £250 and £6,000, with the maximum amount reserved for estates worth more than £2million. Thankfully, that new fee structure has been abolished.
“We were relieved the government decided to think again over probate fees because it would have jeopardised an important income stream for charities,” says Cope. “It’s a positive move for the consumer because if they have more in their estate, they’ll feel better placed to leave a donation to good causes.”
The government has also retained the 10% discount rate for estates where 10% or more was given to charity. That’s welcome news, too, says Cope. “We don’t know what the inheritance tax rules will be going forward. But right now, those that donate over 10% of their estate to charity benefit from a discounted rate of 36% across the remaining value of their estate. So it costs less to give more.”
Growing recognition of the importance of legacy giving
“Legacy giving enables you to support the charities you’ve cared about your whole life, and even a small amount can make a massive difference to them. It makes people feel good; plus, it’s gratifying to see the positive impact this type of giving is having on smaller charities that haven’t benefitted from it in the past” explains Cope.
So how does Cope see the next 10 years of legacy donations? “We’re going to start to see baby boomers passing on the biggest-ever generational transfer of wealth in history,” he says. “If charities can benefit from just a small part of that, what an amazing legacy that will be.”