Fundraisers, It's Time to Talk to Donors About Legacy Giving
Legacy giving is one of the most discussed areas of fundraising for charities and not-for-profit organizations―especially during the pandemic. This challenging time has placed a spotlight on the importance of having a will, and for many, thinking about the legacy they want to leave behind. For fundraisers, this presents an opportunity to initiate meaningful conversations with donors and constituents about the kind of legacy and impact they want to make. Data geek that I am, I compiled statistics to paint the picture of the current landscape and identify key trends to support why now is the time for your fundraising and planned giving team to cultivate donor relationships and maximize gifts over the coming years.
The Time to Talk to Donors and Constituents About Legacy Giving is Now
Canada’s aging population and their net worth are projected to grow significantly over the next 10 years and the largest intergenerational transfer of wealth is expected to take place by means of inheritance. To date, nearly one-third of Canadian families have received some form of financial inheritance—accounting for a total market of $576 billion—according to Statistics Canada’s recent Survey of Financial Security. This inheritance value is expected to top $1 trillion by 20261. This is a significant moment in Canadian history and presents a substantial opportunity for not-for-profits to amplify the conversation about legacy gifts and how they can benefit Canadians today and in the future.
Baby Boomers and the Silent Generation make up over 35%2 of the Canadian population, and they are the primary source for this wealth transfer. Many in these mature demographics have shown a strong desire to leave behind a legacy3, primarily to their families, but also to their communities. Unlike in the past, a large proportion of monies transferred in the coming years will be gifts that will be given during that person’s lifetime. There is a desire to see loved ones enjoying their inheritance, whether that is through the pursuit of higher education or purchasing a first home or a dream vacation. With 40% of inheritance expected to be received by those 54 and under, the beneficiaries of these gifts will primarily be Gen X (age 40 – 54) and Millennials (age 25 to 39).
This new generation of beneficiaries is going to dramatically change the conversations you will be having with your organization’s donor base. Currently, these are likely annual and monthly givers, whose discretionary income has to date been tied up in hefty mortgages and childcare payments, and who very likely will start to see some relief with gifts from their parents and grandparents.
Key Wealth Trends: Inheritance Opportunities Across Canada
Not only are the landscapes across Canada different, from the Rocky Mountains in Western Canada to the soft rolling hills of Atlantic Canada, but demographics, wealth and inheritances differ as well. Organizations that operate on the ground level in these varying geographies know that something that works in Edmonton, Alberta may not be as effective in Montreal, Quebec.
How can you leverage this information on a more local level? Recognizing and appreciating that the opportunities across the country differ and that your success in Kirkland, Ontario will look different than a colleagues’ success in Dauphin, Manitoba is important. Knowing your catchment areas, your constituent base and regional needs can help inform and support initiatives.
Let’s take a closer look.
In 2020, the estimated inheritance value for Canada was projected to be $36 Billion, with Ontario, Quebec, British Columbia and Alberta holding the lion’s share of 85% of the total national inheritance – not surprising given their population sizes. However, when digging a little deeper, we find some key differences between these provinces, as well as the largest cities in the country. The average inheritance in British Columbia was $180,0004, more than double the amount received in provinces such as Manitoba, Quebec or Newfoundland and Labrador. Looking at the major cities, Toronto had the highest incidence—almost double the number of households in Montreal— of those who expected to receive an inheritance in the next year. Meanwhile Vancouver—with fewer households projected to have received an inheritance— had an average inheritance value over $250,000 and the highest amongst all major cities.
Cultivate Donor Relationships to Maximize Legacy Gifting
The study conducted by the Canadian Association of Gift Planners (CAGP) shows that a large proportion of Canadians view bequests as an "either/or" ― either leave a bequest to a charity or leave a bequest to my family5. We in the charitable sector know that “either/or” is not the only option. Knowing that a large contingent of Boomers want to see their legacy flourish in real-time, perhaps now is the moment to think about blended gift asks ― a gift now that they can see realized, and an additional gift as a bequest.
Conversely, your organization can also start to research younger beneficiaries and ways to reach them. Many are likely current, annual and monthly donors in your database. The key is understanding which are going to be receiving an inheritance, stewarding these constituents and zeroing in on the right messaging to build that relationship over time.
This information also allows organizations to tailor their communications to align with the core values and beliefs of younger constituents whose priorities today are likely very different from those of their Baby Boomer parents. It may simply be a matter of educating them on the impact their families can start to make today.
Amplify the Conversation About Legacy Gifts
This intergenerational wealth transfer is a significant moment in Canadian history and presents a substantial opportunity for charities and not-for-profits to amplify the conversation about legacy gifts and how they can benefit Canadians today and in the future. Whether you are a local non-profit on a shoe-string budget or a large national organization, understanding your constituent base and trends is critical to finding success in any given year, but increasingly relevant during the pandemic.
With the outlook for the Canadian economy projected to tighten as the pandemic continues through 2021, this is a great time to pause and evaluate if you and your organization are well positioned to benefit from the unprecedented transfer of wealth in the coming years.
Jennifer Robins is Environics Analytics' Not-for-Profit Lead and brings fifteen years of sales, marketing and analytics experience to help fundraisers, charities and not-for-profit organizations solve their business challenges using data and analytics.
4Statistics Canada Survey of Financial Security
A version of this article was originally shared in the April 2021 issue of Foundation Magazine