The ethics of legacy giving

Legacy giving is a sensitive matter. Despite the challenges and complexities, the legacy market is worth nearly £3 billion in assets and projected to grow exponentially. On average, legacy gifts make up around one-third of a charity’s total income.

 

Accepting legacy gifts means acknowledging the ethical sensitivities. Charities need to weigh up the risks and benefits of accepting donations. Here we look at some of the main points for you to consider.

 

 

Get the facts right first

 

Legacy giving is an emotional issue because it involves family, money, and the law. There may be other complexities on top of that. The Chartered Institute of Fundraising says there is a need to be extra considerate around vulnerable people.

 

Donors may be vulnerable, terminally ill, or have learning difficulties. Charities should take care to communicate with family and friends supporting the donor.

 

Ultimately, it’s important to gauge what situation your legacy donors are in. Remember, this donation may be the biggest amount the donor will ever gift.

 

 

Be open in communications

 

Charities do have legal and moral obligations. The Fundraising Regulator outlines the professional standards for charities accepting legacy donations. These include:

• Respecting the freedom of and privacy of those involved
• Not providing legal advice
• Ensuring that fundraisers have the appropriate legally incorporated status

One of the ethical dilemmas behind legacy giving is communicating how you will be executing legacy wishes. Often, there is paperwork associated with delegating roles and responsibilities. A will normally sets out the framework.

 

To be transparent, charities may want to think about providing will templates or links to drafting specialists. To fully support legacy donors, meeting one-on-one to discuss the value of giving works well. 

 

Open and transparent messaging is also essential to maintaining and building donor and audience trust. Let legacy donors know how their tribute will be differentiated from regular donations. 

 

From this perspective, show your prospective donors your impact. Use immersive storytelling, livestream video, infographics, and animation to highlight activities.

 

 

Fundraising during an emergency

 

The elephant in the room is whether it’s ethical to fundraise during an emergency. This is especially true given the number of people seriously ill from COVID-19. The dilemma is two-sided. First, charities are operating under intense income and service demand pressures. Second, soliciting legacy donations may come across in poor taste.

 

Rogare is a think-tank for global fundraising issues. The organisation invited Clare Routley from Legacy Fundraising UK to investigate the ethics behind fundraising during COVID-19. The project team looked at how fundraisers navigated the crisis in terms of balancing public trust, reputation, and urgency.

 

Of the many questions explored, the project team concluded that ‘rights balancing’ works best. The lens suggests that fundraising is “ethical when it balances the duty of  fundraisers to ask for support (on behalf of their beneficiaries) with the right of the donor not to be subject to undue pressure to donate, such that a mutually beneficial outcome is achieved and neither stakeholder is significantly harmed.”  

 

Overall, Rogare finds that ethics around both day-to-day and emergency fundraising are similar. They observe that the rights balancing lens underscores the importance of proper legacy planning. To best navigate the circumstances, they suggest weighing the pros and cons of donations. Here, the ethical risk in giving offence is balanced by the wishes of the donor and needs of the charity.

 

 

Thanks but no thanks

 

Another big topic for charities accepting legacy gifts is when to say no. There are circumstances where supporters want to leave non-cash gifts that your organisation can’t use. More commonly, donations may come with strings attached or reputational consequences.

 

The crux of the matter is summarised by the Institute of Fundraising. They say: “The value of a donation may not be worth the cost in potential loss of public trust and confidence in the charity, a detrimental impact to the reputation of the organisation, or a conflict with the charity’s ethics and values which could lead to a loss of support in the future.”

 

To evaluate the ethics behind gifts, consider what would happen if the assets were accepted:

• Would potential donors be turned off?
• Are there potential losses to your workforce due to moral grounds?
• Would the donation make your organisation less attractive?

These moral questions may be answered by trustees and other high-level decision-makers. If it turns out that donations need to be returned, prepare for the fall out. Ensure that your process has been followed and that the rationale is clear.

 

Our top tip here is to be wary of anonymous donations. The UK Government says that charities need to know their donors to avoid laundering proceeds of crime. For regulatory comfort, engage with solicitors to request a copy of the final will documents.