A time-sensitive opportunity for charities to build financial sustainability

The JBWere Bequest Report 2025 highlights a significant opportunity for charitable organisations in New Zealand to enhance their long-term financial stability through bequests.

The report reveals that only 6 per cent of wills in New Zealand include a charitable gift, with bequests accounting for just 1.3 per cent of all income of charities, or $320m annually.

However, total inheritances in New Zealand are expected to grow significantly, from around $27 billion in 2024 to a cumulative total of $1.6 trillion by 2050.

This is a staggering figure, highlighting the immense opportunity for charities to grow their endowment funds, diversify their income streams and strengthen their long-term sustainability through bequests.

In this context, boards in the charitable sector should  review the commitments made to invest in bequest fundraising capability, and whether it will best enable an organisation to participate in the inheritances to be shared.

Behind the wealth transfer statistics are individuals and families making choices about their legacy, as well as the charities they want to support in advancing the causes that are meaningful to them. They seek enduring organisations they can trust to steward their final gift and make a positive impact on the communities that they are close to.

New Zealand is experiencing a dramatic demographic change, with significant implications not only on the demand for charitable services but on the opportunities in bequest fundraising. As the population ages over the next 50 years, the annual death rate will near double from 37,000 to 66,000, and this rising death toll will grow the potential pool for charitable bequests.

Our charities should be aware, however, that these demographic shifts will not go on forever as the New Zealand population is expected peak in about 50 years, well before Australia, and charities must act to leverage the bequest opportunities presented by this transition.

Beyond governance responsibilities, boards of charities, as external champions of their organisations, have a role to work alongside management to engage with potential bequestors (many of whom maybe current or past volunteers than annual donors), to promote the benefits of bequests and ensure that the organisation's impact, and how to leave a bequest to the organisation are clearly and regularly communicated.

Given the lead time required to establish a successful bequest programme, the best time to start one was five-to-seven years ago. The second-best time is now.

In my work I observe charities receiving capital funds from bequests. These funds can be given with restrictions on how they are spent to ensure an ongoing contribution or legacy. Unlike regular donations from income, which support core operating and programme costs, restricted capital gifts like this are typically intended to support the organisation's long-term mission and cannot be released as capital distributions. The intent with these restricted capital gifts, or ‘endowed bequests’, is that the value of the capital remains intact over time, or until certain conditions are met.

It is important that boards ensure the organisation has policies and processes in place to demarcate and steward endowed bequests from the annual gifts and other charitable bequests it receives, as well as its general reserves. 

The questions a board asks to ensure it properly honours endowed bequests, and other restricted capital gifts, will cover: governance and legal compliance, investment and financial management, donor intent and ethical stewardship, reporting and future proofing and risk management 

Charities that clearly articulate their approach to managing endowed bequests – distinct from unrestricted donations – and demonstrate a commitment to providing an ongoing contribution or legacy, will foster trust and confidence amongst their donors and volunteers, encouraging them to leave a final gift to the organisation in their will.

For family businesses, we are seeing that the concept of legacy can be deeply intertwined with the values and purpose of the enterprise. Owners with succession plans are thinking about how they pass on not just the business assets to the next generation but the values, the knowledge, the community connections, the things that have given them importance in life. This involves taking a broad view of the family balance sheet and the wealth they have.

When families consider values to protect as part of their wealth transfer they are being intentional about enhancing the lives of those they leave behind – helping to ensure an ongoing supportive and nurturing environment. Providing a charitable bequest creates a tangible expression of values and it can be structured to encourage the family to maintain connections to the wider community – as well as support a sense of belonging, and purpose that extends beyond the family.

The intergenerational wealth transfer has begun and it offers a time-sensitive opportunity for charitable organisations in bequest fundraising. The JBWere Bequest Report 2025 offers data led insights for charities to quantify the opportunity and support the case for investment in their bequest fundraising capabilities    

Boards play a vital role not only in safeguarding endowed bequests but also in supporting management in engaging supporters in meaningful bequest conversations. By keeping past volunteers and donors connected to the organisation in their senior years, boards help ensure that a final legacy gift remains top of mind.

Boards that actively encourage everyday discussions about gifts-in-wills and prioritise well-structured bequest programmes will ensure their organisations are best positioned to receive the rise in inheritances to be shared.