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Australian gifts in wills 2040
INCLUDE A CHARITY WEEKSeptember 2019
Australian gifts in wills 2040
Greetings from London!
Legacy Foresight
Benchmarking, researching and forecasting
legacy and in-memory giving
Australian gifts in wills 2040
80 members – £1.5bn income – 54,000 bequests
Legacy Foresight
13
2319 20 21
32 31
3842
5153
61
67
7678
83 8380
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1994 1998 2000 2002 2004 2006 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Legacy Monitor launched
Number of members
Australian gifts in wills 2040
Project aims
• To analyse recent trends in bequest income
• To explore the long-term outlook for bequest income
Australian gifts in wills 2040
What drives bequest incomes?
Australian gifts in wills 2040
Australian gifts in wills 2040
of fundraising income, Pareto Fundraising
Australian gifts in wills 2040
p.a. growth, 2008 - 2018, Pareto Fundraising
Australian gifts in wills 2040
of fundraising spend, More Strategic
Australian gifts in wills 2040
% of final estates including a charitable gift, Swinburne Business School
Analysing bequest incomes
Australian gifts in wills 2040
Bequest income = No of bequests x average bequest values
(Splitting out residual, pecuniary and other bequests)
Drivers of bequest numbers
Australian gifts in wills 2040
Drivers of bequest values
Australian gifts in wills 2040
The five (really) key drivers
Deaths
Child-free people
House prices
Share prices
Charity marketing
Australian gifts in wills 2040
UK: 7% of gifts = over half of income
Australian gifts in wills 2040
Legacy Monitor 2017
Pecuniary
Smaller residual
(<£100k)
Larger residual
(>£100k) Other
% bequests 53% 34% 7% 6%
% income 8% 31% 54% 7%
Income and notifications by bequest type
Property accounts for 2/3 of household wealth
Superannuation account12%
Property assets64%
Other assets24%
Assets held by Australian 75+s, 2017/18
Australian gifts in wills 2040
ABS Statistics, 2017-18 Survey of Income and Housing, excludes liabilities
Australian gifts in wills 2040
% of final estates with no children including a charitable gift, Swinburne Business School
Key sources explored
More Strategic
Bequest data sourced through charity accounts: reported income only
41 charities: $370m p.a. bequest income (2015 – 2017)
Time period covered from 2008 to 2017 but some patchy data
Missing data points were estimated
Pareto Fundraising
Bequest data sourced from Pareto’s benchmarking programme: number of bequests/average values/total income
80 charities: $300m p.a. bequest income (2015 – 2017)
Time period covered from 2006 to 2018: robust data from 2011 to 2018
Used Pareto Benchmarking reports from 2016 & 2017 to splice together the earlier trend
Australian gifts in wills 2040
A similar trend across both sources
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Bequest income, $m
More Strategic
Pareto
Australian gifts in wills 2040
More Strategic, Pareto
Pareto5 year growth
11.0% p.a.10 year growth
10.1% p.a.
Healthy growth in average bequest values…
$20
$30
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$80
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Average bequest value, $’000, 2011-2018
Australian gifts in wills 2040
Pareto Fundraising Benchmarking
Underlying average growth
2011-20187.5% p.a.
…but number of bequests fairly flat recently
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Average number of bequests, ‘000s, 2011-2018
Australian gifts in wills 2040
Pareto Fundraising Benchmarking
Gradual increase in deaths since 1998
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Deaths, 000s, 1998-2018
Australian gifts in wills 2040
ABS statistics
10 year growth
2008-20181.4% p.a.
10 year growth
1998-20081.0% p.a.
Bequests per 1,000 deaths remains flat
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Average bequests per 1,000 deaths, 2011-2018
Australian gifts in wills 2040
Pareto Fundraising Benchmarking
A very different pattern in the UK!
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Bequests per 1,000 deaths, UK legacy market, 1988 - 2018
RAC launched
Australian gifts in wills 2040
Legacy Foresight UK Market Model
4%of deaths result in
charitable will
6%of deaths result in
charitable will
Our forecasts
Australian gifts in wills 2040
A reminder: the five key drivers
Australian gifts in wills 2040
Deaths
Child-free people
House prices
Share prices
Charity marketing
Deaths to rise by 60% 2020 – 2040
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Projected deaths by cohort, ‘000s, 2020-2050
Later generations
Gen Z
Gen Y
Gen X
Baby Boomers
Builders
Pre 1925
Australian gifts in wills 2040
Boomers currently 20% of population
Pre 19250.3%
Builders7.2%
Boomers19.8%
Gen X19.2%
Gen Y21.9%
Gen Z20.3%
Later generations11.5%
% population by cohort, 2018
Australian gifts in wills 2040
ABS statistics
Baby Boomers vs Builders
Wealthier
Boomers have the
highest levels of
assets, both
financial and
property
Larger
superannuation
pots
HealthierOrigin andfaith
Bettereducated
Living longer, 3+ years for females and 4+ for males
Males narrowing life expectancy gap
Less likely to be Christian, more likely to have no religious affiliation
Wide cultural diversity – over a third born outside Australia
Twice as likely to be educated to degree level and beyond
ABS statistics, Census 2011 and 2016
Australian gifts in wills 2040
Boomers wealthier than builders for all assets
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55–64 65–74 75 andover
Mean household wealth, $’000s, 2017-18
Superannuation account
Other assets
Property assets
Australian gifts in wills 2040
ABS statistics, 2017–18 Survey of Income and Housing, excludes liabilities
Boomer bequest donors expect …
Australian gifts in wills 2040
Tangibility
Transparency
Control
“ I want to picture the difference my money will
make.”
“ I want to know that my money’s being used
well, not getting lost in the system”
“ I want to my wishes to be taken into account,
even when I’m not around”
% child-free climbs from boomers onwards…
6%
8%
10%
12%
14%
16%
18%
Be
fore
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27
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% childfree women by year of birth, pre 1927-1971
Australian gifts in wills 2040
ABS Census 2011
A rise in child-free deaths from mid 2020’s
8%
9%
10%
11%
12%
13%
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Projected % of 60+ women dying child-free, 2007-2040
Australian gifts in wills 2040
Legacy Foresight, ABS Census 2011
House prices very buoyant until 2017
Australian gifts in wills 2040
Australian Bureau of Statistics, Oxford Economics
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Mean price of residential dwelling, $000s, 1988 – 2018
Average
Growth
5.4%2008-2018
Average
growth p.a.
9.2%1998-2008
NSW and Victoria hit hardest by house price falls
Australian gifts in wills 2040
3.5%1.4%
-0.5%-1.9% -2.2%
-5.0%
-9.7% -10.3%-12%
-8%
-4%
0%
4%
8%
Ta
sm
an
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So
uth
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str
alia
AC
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Que
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ustr
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Vic
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% change in average house price by state, March 2019 vs March 2018
Price drops seen as blip not trend
Australian gifts in wills 2040
Australian Bureau of Statistics, Oxford Economics
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800
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Mean price of residential dwelling, $000s, 2015 – 2021
House price
growth
-7.9%2018-2019
Long term, growth forecasts remain positive
Australian gifts in wills 2040
Australian Bureau of Statistics, Oxford Economics
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Mean price of residential dwelling, $000s, 2008 – 2040
Average
Growth
5.0%2030-2040
Average
growth p.a.
4.1%2018-2030
Average
Growth
5.4%2008-2018
Share prices slowed significantly after crunch
Australian gifts in wills 2040
Oxford Economics
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S&P/ASX 200 Index, 1998=100, 1998 – 2018
Average
growth p.a.
3.1%2008-2018
Average
growth p.a.
8.0%1998-2008
Long term slowdown across the developed world
Australian gifts in wills 2040
Oxford Economics
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S&P/ASX 200, 1998=100, 1998 – 2018
Average
Growth
2.7%2030-2040
Average
growth p.a.
4.5%2018-2030
Average
growth p.a.
3.1%2008-2018
We predict a short-term income drop
Australian gifts in wills 2040
Pareto, Legacy Foresight
250
275
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375
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Real bequest income, $m, 2008 – 2040
Growth
2018-2019
4.3%
Growth
2019-2020
-2.0%
Growth
2020-2021
1.3%
Our long term income forecasts
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Bequest income forecasts, 2018 – 2040, $m
Historic income
Current prices
Constant 2018prices
Australian gifts in wills 2040
Pareto Fundraising, Legacy Foresight
Real
growth
4.1%p.a.
Nominal
growth
6.5%p.a.
Australian gifts in wills 2040
Bequest income to 2040, in real terms
Australian gifts in wills 2040
Bequest numbers growth to 2040
Pessimistic scenario: uncertain economic times
• The current house price correction is more severe than currently expected, leading to a 15% reduction in prices during 2019
• Increased global trade tensions escalate to a full-blown trade-war over the period 2020-2030, accompanied by a less welcoming domestic agenda towards migration that halves net migration to Australia
• Both lead to further drops in house prices and share prices over the period.
Australian gifts in wills 2040
Oxford Economics, Legacy Foresight
Optimistic scenario: marketing impacts accelerate
• We assume that the underlying tendency for people to leave a charitable gift in their will increases in line with the trend we’ve seen in the UK.
Australian gifts in wills 2040
The scenarios compared
Australian gifts in wills 2040
Pareto, Legacy Foresight
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Real bequest income, $m, 2008 – 2040
Historic income
Central forecast
Pessimistic forecast
Optimistic forecast
Ave. growth
Optimistic
4.5%p.a.
Ave growth
Central
4.1%p.a.
Ave. growth
Pessimistic
3.7%p.a.
= 2.6x in 2040
= 2.3x in 2040
= 2.1x in 2040
Conclusions and challenges
Australian gifts in wills 2040
Conclusions
• The outlook for the Australian gifts in wills sector is very positive – thanks to underlying demographic and economic factors, real incomes will more than double over the next twenty years
• The impressive growth rates seen over the past decade have been boosted by Australia’s strong economic performance, impacting on the value of property and financial assets
• Looking ahead, that economic performance is likely to be more muted, due to chronic uncertainties in the global economy
• Instead, it’s numbers of bequests, driven by rising death rates (the boomer generation) and an increase in the number of child-free people dying which will underpin growth
Australian gifts in wills 2040
Challenges
• The challenge for bequest fundraisers is to raise the ‘propensity’ of all donors – including those with children and less wealthy households – to leave a gift to charity in their will.
• The role of Include A Charity is crucial to the long-term future of gifts in wills –working alongside individual charity members to raise public awareness of the potential and value of leaving a charitable gift
• Understanding the motivations and attitudes of the large, affluent and diverse baby boomer generation (now in their 50s and 60s) will be key to ensuring that channels and messaging have the maximum impact
• To support strategic development, bequest fundraisers need access to more consistent, comprehensive information on legacy income and bequests by type
Australian gifts in wills 2040
Thank you
www.legacyforesight.co.uk @talkinglegacies @talkinginmemory
Meg Abdy
Development Director