Impact of pandemic on charity legacy income less bad than first thought, figures show

The impact of the coronavirus pandemic on charity legacy income is less bad than previously thought, experts say.

The charity legacy consortium Legacy Foresight said at the end of April that legacy income could fall by between 8 and 27 per cent over the following year because of the Covid-19 outbreak.

But the latest figures from the consortium estimate that legacy income, which was worth £3.2bn in 2019, could shrink by between 4 and 23 per cent this year because of the virus.

Legacy Foresight said the average value of residual bequests was likely to drop by between 3 and 7 per cent in 2020 because of the impact of the crisis on house prices and share prices.

But due to delays in property sales in a subdued property market, the flow of residual cash income will be disrupted, it said.

Because of the virus, Legacy Foresight said, there would be an increase in the number of bequests over the next five years. 

It predicts between 8,000 and 10,000 more bequests will be made than if the pandemic had not taken place, equivalent to a rise of between 1.2 and 1.6 per cent. 

But the consortium also estimated that legacy income would grow by between 9 and 13 per cent over the next five years, less than the 13 and 18 per cent rise it predicted in April.

Jon Franklin, economist at Legacy Foresight, said: “We recently analysed cash legacy income from 12 Legacy Monitor charities in the first six weeks of lockdown. Across the sample, like-for-like cash income was down by 18 per cent on 2019. 

“Although this fall is significant, it’s not as severe as expected, which is heartening news for legacy managers and finance directors. We expect the situation to improve over the coming months as charities continue to adapt their systems for collecting cash and recording bequest numbers in the new environment.”

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