Working together to assist charities and benefactors

Legacy income is a bedrock source of funding for many charities. According to Legacy Foresight, UK charities benefitted from an incredible £2.54bn in legacy gifts in 2016.

Given the vital role that legacies play in supporting charities’ work it is essential that benefactors are confident that their gift will reach the intended charities. The interaction between those working in the charity legacy sector and the legal profession is a critical one for ensuring that benefactors’ philanthropic wishes are implemented efficiently and correctly.

The Institute of Legacy Management (ILM) is the membership organisation for legacy professionals and is made up of over 300 charity and not-for-profit organisations, ranging from members of small local charities to large multi-national institutions. Today, the ILM launches its Good Practice Guidance, which is the culmination of almost a year of consultation with both ILM’s members and other professionals working within the sector.

There was not one event or set of circumstances that provided the impetus for the consultation on the guidance but there were a number of different factors, including:

• The opportunity to proactively respond to the changing context in which charities operate, not least increasing oversight of how legacies are given and used;

• The chance for ILM members to pool their knowledge and resources;

• The opportunity to champion the high standards ILM’s members already take pride in working to; and

• An opportunity to allow those outside the charity sector to understand the role that these professionals play.

The guidance, which will be available online, takes the format of an introduction to set context, the five principles, and eight initial guidance notes. These documents set out a structured framework for the key ethical principles which should be employed by those in charities dealing with legacies.

The guidance, and particularly the guidance notes, is not meant as a lifeless document but is intended to be developed over time. I know that ILM welcomes feedback from members and others that work with the charity sector in order to enhance the guide and to ensure that it reflects practical issues and concerns.

At the outset the guidance makes clear: ‘Legacy management is not an end in itself; it’s an opportunity to ensure the final wishes of generous donors help to create the positive change they wanted to see in the world. Donors have placed their trust in us. As such, it’s our duty as legacy professionals to fulfil their final wishes in a timely manner, and to optimise the positive impact these gifts have for charities and their beneficiaries.’

The guidance identifies five key principles that form its foundation:

• Sensitivity – treating everyone involved in legacies with respect, tact, and dignity;

• Transparency – openness about the legacy journey work we do, taking every step to ensure all parties clearly understand the process and progress of individual legacies;

• Integrity – acting according to the highest standards throughout a legacy process;

• Collaboration – working together to engage everyone involved in a legacy, using their skills and knowledge to ensure this legacy is handled appropriately; and

• Informed – dedicated to continuous professional development to ensure our expertise serves our donors and organisations.

These principles should be applied at each stage of the process of dealing with legacy gifts left in wills, from notifying charities about gifts through to their actual use for the charity’s beneficiaries. While these principles are not enforced through legislation or regulation, the intention is that they will be recognised as important ways to reassure benefactors that their gifts will be dealt with and used as they wish, and will thereby be broadly adopted.

During the consultation process, the steering group not only considered the position in England and Wales but also consulted with solicitors and members in Scotland and Northern Ireland to ensure that the guidance would be equally helpful there. Charity members and wider sector professionals were all closely involved with the whole process of creating the guidance, as well as there being consultation with the full ILM membership twice during the process.

The guidance is a valuable tool for the sector and the legal profession at large. Together with the joint ILM/Law Society publication ‘Charities as Beneficiaries’, it allows both charities and the legal profession to work together to assist in their valuable endeavours.

I have no doubt that the guidance will help both solicitors and charity legacy professionals on a day-to-day basis and will assist charity trustees with the important task of showing that they are properly fulfilling their fiduciary duties.

Stephen Richards is a partner at Withers and a member of the taskforce that created the guidance

@WithersLLP

www.withersworldwide.com