Following pronouncements made in December 2010 by Jeremy Hunt, Secretary of State, Department of the Olympics, Culture Media and Sport on the potential of legacy giving as a key revenue source for the arts, Arts Quarter and Legacy Foresight have published the findings from their first survey on levels of legacy fundraising within the sector. This latest AQ/LF Report highlights not only opportunities for significant growth but also a fundamental need for capacity building if the aspirations of the Coalition Government are to be realised.
For more information, or a copy of the report, contact Meg Abdy at m.abdy@legacyforesight.co.uk
In the year to March 2010, our 42 Consortium members received total legacy income of £883m – that’s £11m down on the same period last year, and £30m below the March 2008 peak.
While combined legacy income is still falling, the rate of decline is slowing. As the chart below illustrates, the latest results show a 1.2% fall year on year; the smallest drop since the start of 2009.
Legacy Foresight’s latest forecasts suggest that positive growth rates will return in the second half of 2010, and that the legacy market will finish slightly up by the year end.
On average, Consortium incomes have performed better than anticipated 18 months ago. This is largely due to the turnaround in the housing and equity markets from spring 2009 onwards.
The impact of recovering house and share prices can be seen in the all-important residual legacy values, which have largely stabilised at around £52,000 (see chart below).
Meanwhile, pecuniary values (cash gifts worth on average £3,500) continue to climb steadily at around 7% pa.
In the mid-noughties our Consortium members were seeing legacy incomes grow by almost 6% pa. In Q1 2008 the market stalled, and has been slowly declining ever since.
In the twelve months to December 2009, legacy income for our 42 Consortium members combined was £875m. In the year to December 2008 this figure was £906m – a fall of 3.4%, or £31m. Since our Consortium represents around 47% of the total legacy market, we estimate that £66m of legacy income has been lost to the sector overall in the past year.
Residual bequest values – a key driver of legacy performance – continue to drop. In the twelve months to December 2009, average residual values fell by 5.5%. The average residual bequest is now worth £51,300 – that’s £4,100 (or 7.5%) below the market peak in Q1 2008.
Meanwhile, pecuniary (cash) legacy values have continued their gradual upward trend. Since 2003 they have been growing by 5% pa, and are worth around £3,500 today. When people write cash gifts into their wills, they think about what that money could buy at that point in time. Given that on average, people write their last will five and a half years before they die, pecuniary values lag behind the economic cycle.
While the UK recession has officially ended, we’re not expecting a speedy recovery in the legacy market. Legacy Foresight believes that legacy values will continue to fall through much of this year, and we will not see a return to pre-crunch levels until at least 2012.
More about Legacy Monitor
Legacy Monitor is a consortium research programme to analyse, benchmark and debate trends in the legacy market. Set up in 2008, it incorporates an annual ‘audit’ of trends in the legacy market, and a quarterly benchmarking service. This year’s programme benchmarks 42 of the UK’s leading charities, who together account for 47% of the legacies market. All client charities have agreed to share top-line legacy performance data with the sector, allowing considerable information and insight to be gained. The next quarterly data will become available in June 2010.
In the twelve months to September 2009, legacy income for our 38 Consortium members combined was £864m. That’s a higher figure than we’ve seen in the past two quarters – albeit still 1.2% below the same period last year.
Likewise, residual bequests – which represent 85% of Consortium legacy income – have largely stabilised in value. The average residual bequest is now worth £53,000; £2,600 below the peak of Q1 2008.
This better-than-feared performance is due to buoyant house and share prices – both key determinants of legacy income – which have risen sharply in the past six months. According to the Nationwide Building Society, average house prices rose by 7.5% between April and October 2009. Meanwhile, share prices are around 50% higher than the lows seen in the spring of this year.
Sadly, it may be too soon to crack open the champagne. The prevailing view – which we share – is that recent price rises are not warranted by the underlying economic position. Both house and share prices are expected to drop back a little next year, as global economies enter a period of slow, painstaking recovery. This in turn will have a dampening effect on those vital residual legacy values.
In today’s gloomy times, it’s important to find some silver linings. The latest Legacy Monitor (Q3 2009) shows that while legacy incomes continue to fall, the results were not as severe as expected. In the twelve months to June 2009, legacy income for our 38 Consortium members combined was £859m. That’s 2.3% down on the same period last year (the market peak), but marginally better than the 2.4% drop seen in our Q2 benchmarking report. This means that – for now – the downward trend is holding stable, not accelerating!
Average residual legacy values – a key driver of legacy performance – continue to drop sharply. In the twelve months to June 2009, average residual values fell by 5.8%. In contrast, this time last year, we were seeing value increases of 6.8%.
However, the fall in average values was offset by a rise in the number of legacies received. Our Consortium members saw a surge in total legacy notifications in autumn 2007. This step change has been maintained over the past 2 years.
If notifications had continued to grow at their long term trend (of around 2% pa) then over the past twelve months legacy income would have fallen by a more dramatic 5%!
For more information on the Legacy Monitor service - or to join the Consortium in 2010 - contact m.abdy@legacyforesight.co.uk
Meg
Following pronouncements made in December 2010 by Jeremy Hunt, Secretary of State, Department of the Olympics, Culture Media and Sport on the potential of legacy giving as a key revenue source for the arts, Arts Quarter and Legacy Foresight have published the findings from their first survey on levels of legacy fundraising within the sector. This latest AQ/LF Report highlights not only opportunities for significant growth but also a fundamental need for capacity building if the aspirations of the Coalition Government are to be realised. For more information, or a copy of the report, contact Meg Abdy at m.abdy@legacyforesight.co.uk
Meg
In the year to March 2010, our 42 Consortium members received total legacy income of £883m – that’s £11m down on the same period last year, and £30m below the March 2008 peak.
While combined legacy income is still falling, the rate of decline is slowing. As the chart below illustrates, the latest results show a 1.2% fall year on year; the smallest drop since the start of 2009.
Legacy Foresight’s latest forecasts suggest that positive growth rates will return in the second half of 2010, and that the legacy market will finish slightly up by the year end.
On average, Consortium incomes have performed better than anticipated 18 months ago. This is largely due to the turnaround in the housing and equity markets from spring 2009 onwards.
The impact of recovering house and share prices can be seen in the all-important residual legacy values, which have largely stabilised at around £52,000 (see chart below).
Meanwhile, pecuniary values (cash gifts worth on average £3,500) continue to climb steadily at around 7% pa.
Meg
More about Legacy Monitor
Legacy Monitor is a consortium research programme to analyse, benchmark and debate trends in the legacy market. Set up in 2008, it incorporates an annual ‘audit’ of trends in the legacy market, and a quarterly benchmarking service. This year’s programme benchmarks 42 of the UK’s leading charities, who together account for 47% of the legacies market. All client charities have agreed to share top-line legacy performance data with the sector, allowing considerable information and insight to be gained. The next quarterly data will become available in June 2010.
Meg
Legacy Monitor Data Bulletin, Q42009
Meg
In today’s gloomy times, it’s important to find some silver linings. The latest Legacy Monitor (Q3 2009) shows that while legacy incomes continue to fall, the results were not as severe as expected. In the twelve months to June 2009, legacy income for our 38 Consortium members combined was £859m. That’s 2.3% down on the same period last year (the market peak), but marginally better than the 2.4% drop seen in our Q2 benchmarking report. This means that – for now – the downward trend is holding stable, not accelerating!
Average residual legacy values – a key driver of legacy performance – continue to drop sharply. In the twelve months to June 2009, average residual values fell by 5.8%. In contrast, this time last year, we were seeing value increases of 6.8%.
However, the fall in average values was offset by a rise in the number of legacies received. Our Consortium members saw a surge in total legacy notifications in autumn 2007. This step change has been maintained over the past 2 years.
For more information on the Legacy Monitor service - or to join the Consortium in 2010 - contact m.abdy@legacyforesight.co.uk