Dutch legacy fundraising: growth figures!

By Reinier Spruit
On November 22, 2012 At 2:00 pm

Category : Latest posts, legacies

Responses : 6 Comments

You are a fundraiser, and therefore you like numbers, right? Next month the Dutch Central Bureau of Fundraising (CBF) will publish their annual figures. In this post I’ll give you a sneak preview on the legacy income figures.

The Dutch fundraising market is often labeled as a mature fundraising market. Whether that’s a correct label or not is debatable and subject for another post. But that there is a long giving tradition in The Netherlands is true. And that shows in the legacy income that organizations receive from their most committed donors.

I’ve analyzed the legacy income for 2004-2011 in The Netherlands (of the organizations who report to the CBF).

  • The top 40 organizations receiving the most in legacy income has increased from 154 million euro in 2004 to 219 million euro in 2011. That is an average year over year growth rate of 5.1%. (see red trend line)
  • In the past 8 years the top 40 organizations have received approximately 80% of the total Legacy income. In 2011 the top 40 organizations received even 86% (see black dotted line). The other 14% was raised by 178 other organizations.
  • Of that 219 million euro 61% went to the top 10 organizations, 20% to the top 11-20 organizations, 12% to the top 21-30 and 7% to the top 31-40. This division is pretty constant although recently the top 11-20 is gaining share at the expense of the top 21-40.

 

  • The top 40 legacy income organizations receive an average of 27% of their total income through legacy income. Some organizations even receive more than half (!) of their total income through legacy income.
  • If we look at the top 40 organizations who receive the most in total fundraising income in 2011 we see a similar picture: they receive an average of 22% from legacy income. Of those 40 there are 23 organizations receiving less than 22% income from legacies. There are even 14 organizations receiving less than 10% income from legacies… I’m pretty confident that some of these organizations are sitting on some sort of gold mine… Here is a list of those organizations that are raising MORE than 22% of their annual income from legacy contributions in 2011.

  • So which organizations are doing best? I’ve looked at two long term growth indicators: The Compound Annual Growth Rate (CAGR) and the Median Growth Rate. If you combine the ranking of both indicators the organizations listed here below are doing best in terms of growth rates. It seems they are doing something very good in their legacy fundraising! (Who wants to write a blog post on their best practices?)

BUT, there are also three risks with legacy income:

  • One, is that you will become over-reliant on a somewhat capricious income source. Fluctuations in income are not uncommon.
  • Two, is that great legacy income can hide the stagnation of your non-legacy income. So always split them to see the development of both sources of income. Non-legacy income can be influenced much more than legacy income in the short term. So it’s helpful to separately monitor the effect of your efforts.
  • Three, if you don’t start focusing on your legacy income soon, you potentially risk missing out on lots of income in the future.

My next post will focus on the non-legacy income development! Watch this space…

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Reinier Spruit (37 blogs on 101fundraising)

Reinier is in love with fundraising since 2001. Ever since he's trying to improve his own fundraising skills and those of others. He founded 101fundraising back in 2010. At the moment working with amazing clients through his one-man fundraising consultancy. Loves running and baseball.


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Comments

  1. Interesting and good work! And a lot to comment.
    1: It is good to realize that these figures concern classical charitable organizations, not churches, cultural instiutions, smaller foundations etc…My guess is that the total legacy income in the Netherlands might be double the figures you use.
    2. Legacy figures are different from other donor figures: small numbers , high amounts. If smaller organisations receive a large legacy this give 3 digit percentages of growth. Even for large organisations e.g a 6 milion legacy will have an big impact. So you need to compare more years. I like the CAGR annd MGR approach, but for legacy and only the 2004-2011 figures this does not work nice: If a steady growing foundation has al high in 2004 and low in 2011, it will be shown as low performing.
    3. Good legacy programs: some of the above mentioned organisations indeed have good programs!
    4. I like your points at the end. I would suggest to blog more on legacy fundraising!

     — Reply
    • Thanks Arjen! Glad you liked it!

      About your second point. By adding the Median Growth Rate I’ve tried to avoid the outliers in 2004 and/or 2011. The Median Growth Rate is a much more robust long term growth indicator than the CAGR. The combination of the two gives the above list.

      As with any ranking, we need to do our homework now to see who really has a good legacy fundraising program. This list only steers you into the right direction.

      So, when can we expect your blog on best practice legacy fundraising? 😉

       — Reply
  2. Hi rein! Thanks for the great legacy stuff. I find it interesting to look at annual growth, which charitas are able to increase legacy income year after year? And yes: what is their strategy? A lot of blog material… Juan?

     — Reply
    • Great stuff, Thanks Reinier! I just read it.
      Is the total income here including corporate, government aids,etc. or only individual fundraising (membership/major donors, etc)?

      I have shared a bit about WWF with my previous blog about personal touch… 🙂

      Just a small note:
      Fluctuation is common in legacy… But in WWF, the drop/growth are still pretty stable for many markets.. Once in a while we have “anomaly case” which make huge increase for a market in one FY, and then the next FY the legacy income back to “normal” and many times the management team see this as legacy being under-performing. This can be dangerous if we cannot explain how legacy works to the SMT. 🙂

      cheers!

       — Reply
      • Thanks Juan!

        The total income used here is the “Income Own Fundraising” according the CBF definition: this is including corporate fundraising, but excluding government aid, and including individual fundraising.

        My guess is that you can explain it very well Juan 😉

         — Reply
  3. Many thanks. Well done Reinier. This will be very helpful to us. Cheers
    Daryl

     — Reply