Charitable gifting increase: What impact does it have?  

According to Remember a Charity, one in five wills now include a donation to charity. In 2021, 10,670 different charities were named as beneficiaries in wills, and over 35,000 estates included some form of charitable donation. However, a far higher proportion of people support charities in their lifetime. It is estimated that up to 74% of people will support a charity whilst they are alive.

Smee & Ford estimate that charitable donations in wills could hit £4 billion in 2022 which would be the highest reported figure on record, and an increase of 14% compared with 2021.

What is the explanation for this?

There has been an increase in schemes which exist to support will makers to remember a charity in their will. Cancer Research UK run their own free wills scheme, as do Will Aid and National Free wills network. These schemes are based around the idea that instead of the will maker paying a fee to a solicitor, the solicitor will draw the will up free of charge and a donation is made in the will to the charity instead. In more complicated circumstances, firms of solicitors can reserve the right to charge a fee.

Another key aspect that has increased charitable gifting is that the annual death rate is higher now than it was before the coronavirus pandemic. Deaths in 2021 were 10% higher than the annual death rate in the period 2015-2019, a trend that is expected to continue due to an ageing population and a lack of NHS resources. Increased legacy income can also be explained, in part, due to the significant increase in house prices. However, due to the current economic climate the housing market may begin to decline in the same way that share prices have declined, due to the cost-of-living crisis and the war in Ukraine.

Impact on charities

Notwithstanding current economic conditions, charities can expect to receive a significant rise in gifting from wills over the coming years. This will increase the number of legacy officers that charities will require in order to deal with the gifts left by testators in their wills to charities and the need for specialist advice from probate practitioners dealing with charitable estates.