The following survey updates the data contained in a previous study in
August 1998. Despite a significant increase in the sample from 41 to
70 organisations the trends identified in the prior survey remain in
tact.
The Sample
The 1997 Annual Reports of 149 major Australian charities were
surveyed. Of those, 70 (47%) separately disclose their bequest
income.
Strong Growth
For the 70 charities who separately report bequest income, total 1997
fundraising income was $377million while bequest income was $103million.
Hence bequests constituted 27% of total fundraising income in 1997
compared to 24% in 1996. Also from 1996 to 1997 bequest income grew by
28% while total fundraising income increased by 14%.
Of the 70 in the sample, 36 (51%) recorded an increase of bequest income
of more than 10% from 1996 to 1997. For 13 (19%) it was between plus or
minus 10%, while for the remaining 21 (30%) bequest income fell by more
than 10%.
Bequests are thus not only an important source of fundraising income but
also appear to be growing at a faster rate. The significance of bequest
income is best shown by the fact that while they account for 27% of total
fundraising income, they contributed 49% of the growth in fundraising
income in 1997. Given the diversity of fundraising techniques, the high
contribution to growth from bequests suggests that the growth of some of
the other forms of fundraising is under pressure.
Reason for Growth
Givewell has identified several factors which are contributing to this
surge in bequests :-
- 1. A focus on bequest development by major charities with the support of
the Fundraising Institute of Australia. This includes employment of more
Bequest Development Officers, advertising the idea of leaving a bequest
and in some cases helping benefactors in the process of preparing their
will.
- 2. Better financial planning supporting a trend towards self provision
in retirement. This means larger estates and larger amounts given by
bequest.
- 3. More emphasis on will preparation and estate planning which improves
the likelihood that an intended legacy will be formally recognised.
Given the long term nature of these factors, and their relative
immunity from changes in the economic cycle, there is good reason
to expect that this strong level of growth will continue. Increased
involvement by financial planners, accountants and solicitors will be
an important part of supporting this trend.
Who Attracts Bequests
|
Organisation |
Fundraising |
Bequests |
Bequests as % of Fund-raising |
|
The Salvation Army Australia Southern Territory |
$30,501,000 |
$11,798,000 |
39% |
|
Royal Victorian Institute for the Blind Limited |
$14,055,201 |
$11,202,543 |
80% |
|
National Heart Foundation of Australia (NSW Division) |
$9,293,000 |
$6,144,896 |
66% |
|
Royal Blind Society of New South Wales |
$10,242,000 |
$6,036,000 |
59% |
|
New South Wales Cancer Council |
$9,242,000 |
$5,572,000 |
60% |
|
Anti-Cancer Council of Victoria |
$11,734,000 |
$5,324,000 |
45% |
|
Guide Dog Association of New South Wales and A.C.T. |
$9,570,357 |
$4,842,801 |
51% |
|
Australian Red Cross Victoria |
$10,281,000 |
$4,486,000 |
44% |
|
Royal Society for the Prevention of Cruelty to Animals, New South Wales |
$5,343,362 |
$4,231,064 |
79% |
|
Barnardos Australia |
$5,660,524 |
$3,338,819 |
59% |
|
Queensland Cancer Fund |
$9,412,540 |
$3,228,629 |
34% |
|
Royal Institute for Deaf and Blind Children |
$8,171,781 |
$2,742,877 |
34% |
|
The Northcott Society |
$3,310,224 |
$2,429,621 |
73% |
|
Royal Flying Doctor Service of Australia (NSW Section) |
$3,736,393 |
$2,238,718 |
60% |
|
Children's Medical Research Institute |
$4,848,360 |
$2,091,198 |
43% |
|
Royal Far West Children's Health Scheme and Services for the Aged |
$2,609,485 |
$1,936,764 |
74% |
|
Wesley Mission |
$7,933,000 |
$1,890,378 |
24% |
|
The Smith Family |
$24,545,000 |
$1,867,000 |
8% |
|
National Heart Foundation of Australia (Queensland Division) |
$3,375,355 |
$1,685,316 |
50% |
|
Cancer Foundation of Western Australia (Inc.) |
$3,316,401 |
$1,420,530 |
43% |
|
Junior Legacy, Melbourne |
$2,058,040 |
$1,416,506 |
69% |
|
Royal Society for the Prevention of Cruelty to Animals - Queensland |
$1,517,501 |
$1,080,909 |
71% |
|
Montefiore Homes for the Aged Incorporated |
$3,321,614 |
$1,076,701 |
32% |
|
Multiple Sclerosis Society of Victoria Ltd. |
$5,332,650 |
$1,019,200 |
19% |
Which Causes Attracts Bequests
The table below lists some of the categories surveyed along with
their total 1997 bequest income as a proportion of total fundraising
income.
|
Category |
Bequest Income as % of Fundraising Income |
|
Animal Welfare |
77 |
|
Major Diseases |
47 |
|
People with Disabilities |
43 |
|
Medical Support/Humanitarian |
32 |
|
Aged Care, Children and Welfare |
32 |
|
Conservation and Environment |
14 |
|
Overseas Aid |
2 |
This table illustrates the relative importance of bequests to various
categories of charity. It also demonstrates that bequests are more
likely to be given where a benefactors life has been fundamentally
touched by a cause. A lower level of bequests are evident where,
while there is sympathy and support for a cause, it is less likely
to directly touch the life of the benefactor or their family.
Final Comment
Some charities which would have a significant level of bequest income
have not been included in the sample because it is not separately
disclosed in their financial statements. Given the increasing
importance of bequests, we believe it would improve financial
reporting if more major charities made separate disclosure.
Aneesh Sadarangani, Research Analyst
Michael Walsh, Principal
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