Bequests, what to do with them

Bequests were in the news over the holidays. A well known and loved charity was concerned that over the last three years it had received less bequest income. I checked the figures to check whether this was a universal phenomena and it isn't. Bequest income has actually  increased over the last three years.

However that wasn't what I wanted to comment on. It's about what you do with bequests that I think is worthy of comment. For many organisations the thought of receiving a bequest is a pipe dream yet it's probably one of the easiest fundraising tools to get started. You simply have to change your will to include a bequest then talk to your board members and supporters about why you have taken such a step. Easy, peasy.

But while you are getting that sorted out, you need to make a decision about how you will use the bequest money. There are two options. One is that you will use it to supplement your annual income. In other words spend it today. Otherwise you might establish an endowment fund which maintains its capital to generate income. Once you get to this point you are truly a sustainable organisation! Oops, Sorry, to get diverted. Back to the endowment fund! Personally I believe that an endowment fund would be attractive to your potential donors. Better that their support for you can continue to provide assistance over many years, than to be used up in one or two years. This doesn't mean that endowment funds can't ever be used. Your policy would probably determine what constitutes an emergency situation. A bequest is a legacy gift so it makes sense to keep it as a legacy.

Another issue for your bequest policy is donor recognition. I'm in the camp that says celebrate the gift while the person is around to appreciate it. You won't know for sure that someone has left you a legacy until their death but in the meantime you can presume that if they tell you they've done it, they probably have. Once you know they are making a bequest, you must do something with the information. You really only have one shot at this because if you miss the mark, the donor will go somewhere else.