Charities may be better off focusing their legacy fundraising efforts on cash gifts rather than residuary gifts, according to research by a leading UK law firm.
In its report A Dead Giveaway, Mishcon de Reya analysed 1,030 of its clients’ wills, mostly dating from 1990 onwards, and found that 20 per cent of them included a charitable legacy.
More than 200 of the analysed wills mentioned charities and included 511 separate legacies. Of these, 48 per cent were cash gifts, 47 per cent were residuary gifts, and 5 per cent were gifts of specific items.
A spokeswoman for the organisation cautioned that the figures would not be a fair general indication of the proportion of wills that included legacies because Mishcon de Reya’s client base was not representative of the general population in terms of wealth.
Nine per cent of the wills analysed, or 43 per cent of the wills containing charitable legacies, contained at least one cash gift that would go to charity immediately on the testator’s death. The rest of the cash legacies were conditional on factors such as one or more other people having also already died.
Only 1 per cent of the wills analysed included residuary legacies that would take effect immediately on the person’s death.
"Although residuary legacies are considered to be the ultimate prize by many charities, it is striking how few clients ever include a charitable residuary legacy that takes immediate effect on death," the report said. "The reward for charities may be high, but the fundraising efforts may be disproportionate."
The report said that cash gifts are generally less valuable than residuary gifts, but they are more likely to take effect immediately after the testator’s death, and so the charity is more likely to receive the legacy.
"As far as charities are concerned, the old adage ‘a bird in the hand…’ may well be relevant," it said.