The Family Tribute in Charitable Bequest Giving

• Date: 01 September 2015
• Author: Russell N. James
• DOI: http://doi.org/10.1002/nml.21141
• Published date: 01 September 2015

73

N M  L, vol. 26, no. 1, Fall 2015 © 2015 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/nml.21141

Journal sponsored by the Jack, Joseph and Morton Mandel School of Applied Social Sciences, Case Western Reserve University.

Correspondence to: Russell N. James III, Texas Tech University, Box 41210, Lubbock, TX 79409-1210.

E-mail: russell.james@ttu.edu

 e Family Tribute in Charitable

Bequest Giving

AN EXPERIMENTAL TEST OF THE EFFECT OF REMINDERS

ONGIVING INTENTIONS

Russell N. James III

Texas Tech University

The propensity for charitable bequest giving is much lower than for current charitable

giving. Some nonexperimental evidence suggests that this difference may be due to the

relatively greater importance of family benefit considerations in charitable bequest giving

than in current charitable giving. To test this concept experimentally, the effects of a fam-

ily–charity conflict reduction message (that is, a reminder of family connections to a cause

and an opportunity to make a tribute gift) are measured for both current and bequest

giving. For those with family connections to a cause, the message generated increased inter-

est in charitable bequest giving but not in current charitable giving. This result provides

experimental support for previous suggestions regarding the special role of family consid-

erations in charitable bequest giving. Managers may profitably consider the use of tribute

messages to encourage bequest, but not necessarily current, charitable giving. Such messages

were effective at increasing bequest intentions for all organization types and demographic

groups tested, especially where the tribute was in honor of an ascendant such as a mother,

grandmother, grandfather, or uncle.

Keywords: fundraising, bequests, legacy, planned giving, estate planning

BEQUEST GIVING (DEFINED AS ANY POSTMORTEM TRANSFER OF WEALTH TO

CHARITY) constitutes a substantial source of revenue for nonprofi t organizations.  is occurs

despite the dramatically lower propensity to engage in bequest giving as compared with cur-

rent giving.  is lower propensity may be due, in part, to the relatively greater importance

of family considerations in charitable bequest giving.  e purpose of this research is (1) to

experimentally test the relative importance of family considerations by measuring the eff ects

of a family–charity confl ict reduction message (tribute giving) on both current and bequest

giving and (2) to identify specifi c organization types, recipient groups, and circumstances

where such a message may be practically useful for nonprofi t managers.

Nonprofi t Management & Leadership DOI: 10.1002/nml

74 JAMES

Literature Review

Previous research has established the economic significance of charitable bequest giving.

Further, some evidence supports the notion of the particular importance of family considera-

tions in these decisions. However, little experimental research has been conducted in this fi eld.

Signifi cance of Charitable Bequest Giving

Charitable bequest giving is an important source of revenue for nonprofi t organizations. For

example, in the United Kingdom, legacy giving accounted for approximately ₤2 billion of

gift income (Dobbs et al. 2010). Bequest giving accounted for 23 percent of all fundraising

income for the top 500 fundraising charities in the United Kingdom (Pharoah 2010). In

2014, Giving USA reported more than $27.7 billion in charitable bequests, which was sub-

stantially greater than the $17.9 billion for all corporate donations combined. In the Neth-

erlands, charitable bequests represented 23 percent of total income from fundraising (CBF

2008).

For some charities, the reliance on bequest income is especially great. For example, in the

Netherlands, 40 percent of charitable bequest funds went to health-related charities (CBF

2008). Similarly, several health-related charities in the United Kingdom report receiving

half or more of their gift income from bequest gifts (Pharoah 2010). In the United States,

bequests accounted for 22 percent of all giving by individuals to higher education (Kaplan

2007). One in ten Australian charities described bequest giving as their most important

source of funding (Giving Australia 2005).

 is substantial impact from charitable bequests comes despite the tiny fraction of decedents

who leave anything to charity. For example, in the Netherlands only 3.7 percent of estates

include a charitable gift (Dekker and Uff elen 2014). One survey of Canadians found that 4

percent of respondents had a planned charitable bequest (FLA Group 2010). In the United

Kingdom only about 5 percent of estates contain a gift to charity (Radcliff e 2002). In the

United States, about 5.7 percent of those age fi fty-fi ve and above have included a charity in

their estate plans (James 2009). A national sample of Australian probate fi les found that 6.5

percent of estates included a charitable gift (Baker 2014).

This low level of participation in charitable bequest giving occurs despite relatively high

levels of participation in current giving. For example, Giving Australia (2005) reported

87 percent of the population engaging in current charitable giving during one year, while

only 4.4 percent had a planned charitable bequest. In a nationally representative US study,

fewer than 10 percent of those over the age of fi fty-fi ve who reported making $500 or more

of annual charitable gifts indicated that they had a planned charitable bequest in their estate

plan (James 2009). In the United Kingdom, while 76 percent reported having donated

money in the previous month (Charities Aid Foundation 2013) only about 5 percent of

decedents include a charitable bequest (Radcliff e 2002).  is gap is all the more remarkable

given that age is positively correlated with participation in current charitable giving (Bek-

kers and Wiepking 2011) and that fi nal bequest decisions are typically made quite late in life

(James 2013).  e substantial impact of bequest gifts with so few people actually engaging in

this type of giving suggests an enormous potential benefi t for nonprofi t organizations from

any improvements in bequest fundraising methods, especially given future trends of an aging

population (James 2013).