Smaller charities are enjoying a larger growth in legacy income

Helen Barrett

Legacy income is rising significantly faster for smaller charities than it is for larger ones, according to research.

The Legacy Market Audit 2006 found that charities with legacy incomes of less than £7m a year had seen their income grow by 5.6 per cent a year since 2004, compared with 2.3 per cent for charities with legacy incomes of more than £20m.

The audit, which was conducted by Legacy Foresight, a consortium of 32 charities, discovered that there is now a larger legacy cake than in previous years, but more charities are competing to share it - and that traditionally less popular causes were often the most successful.

Health charities have received one-third of the total legacy income since 2004, but welfare and housing charities enjoyed the highest growth rate - 45 per cent.

The next largest increase belonged to conservation and environment charities, at 17 per cent.

Jonathan Parris, director of the Remember a Charity consortium, which sponsored the research, urged charities to review their legacy fundraising strategies in light of the findings.

"Legacy fundraising is the most cost-effective form of fundraising and is worth investing in," he said. "This is not a time for charities that have traditionally relied on legacy income to rest on their laurels."

Parris added that rising property prices had created greater potential growth for charitable legacies, but that the prospect of inheritance tax acted as a deterrent.

The report also warned that charities could see legacies fall by 2012 as the current elderly population declines and life expectancy rises.

KEY POINTS

- More people than ever are leaving charitable donations in their wills

- Legacy income for small charities is growing faster than it is for large charities

- More organisations are competing for legacies as people opt to leave money to conservation and international development

- But legacies could drop by 2012, as people live longer and the elderly population declines.

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