Photo by Simeon Muller via Unsplash.com
When you die, your love of the arts doesn’t have to die with you. Your legacy can live on in the form of a bequest – a posthumous donation of a portion of your estate made to a company you have supported in life.
The Australian Ballet established its bequest program around 1990, said Kenneth Watkins, Director of Philanthropy. ‘It’s a very slow growing, long-term strategy which yields good returns,’ he explained.
In many cases bequests are big business.
‘The size of the bequests that come in can be anything from $5,000 to $1 million. Most of them, our average bequest, is around $200,000,’ Watkins said.
Starting the conversation
Craig Whitehead, Chief Executive of the West Australian Symphony Orchestra (WASO) said the company approaches the question of bequests as part of a broader framework about philanthropic giving.
‘We found that there was a significant number in our community of supporters who were passionate about education and community engagement. It may well be that the first time they saw WASO was when the Orchestra toured into a regional centre or to their school, so it’s tapping into that and talking to them about the education and community engagement programs that we have that they can support through their philanthropic gift,’ he said.
‘And then there’s a conversation with people about, “I’d love to give but I don’t have the capacity now to be able to give,” and then that’s how you start the conversation about how perhaps a bequest might be possible. It’s about a way in which you can create a legacy, though your love of the orchestra, to the next generation – either your children, your grandchildren or indeed just the next generation of classical music lovers. And that struck a chord.’
Whitehead stressed that you can’t start a conversation with potential donors by raising the subject of bequests.
‘Certainly it’s not the first conversation you have and that’s why I think it’s important to understand a bequest program is part of a much wider conversation around philanthropy,’ he said.
‘Once you’re talking about the benefits of philanthropy and the range of programs, then it becomes part of the suite of programs that you’re able to have a conversation with them about … You certainly can’t go from no interaction, no relationship, no conversation with somebody to the first conversation you have being asking for a bequest.’
The delicate conversation around considering a bequest has changed over time, Watkins said.
‘In 1990 we certainly didn’t approach people directly, it was very indirect; putting things in front of people on brochures, check the box if you’re interested, that’s how it started. Nowadays it’s very much [a conversation] with people who are already around the organisation making contributions in particular ways. We can identify if they’re asset rich, living on returns from reserves, etc. So often they can do something beyond their life, which is the gift that keeps giving because we don’t spend the money, you see, and that’s our selling point for the bequests which come in – but they still help build the financial stability of the company,’ he said.
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Funds received from bequests are invested in The Australian Ballet Foundation, creating perpetual income for the company and providing a leverage point when discussing potential bequests with donors.
‘A bequest is someone’s life savings … so when it comes to the company, we actually reserve that money, put it into an endowment and don’t spend the money, we only spend the income earned. What we’re doing is we’re building an asset for the company in the same way as the person has in their life. So you’re drawing the similarities across: we deal with what you give us in the same way as you deal with your own life. It’s a very powerful conversation,’ Watkins said.
‘The assistance to the artist and the art by stabilising a company is a very important motivating factor for the discussion of a bequest from the outset, because if you get to the point of that discussion, they’re already deeply interested in the company and they’re deeply interested in the art form that they’re supporting.’
A culture of giving
Unlike the USA, where a culture of private giving is well established, Australia has been slow to adopt philanthropy as standard practice, but that situation is changing, said Whitehead.
‘I think that people are increasingly understanding the pressures that not-for-profit organisations are under, and the overall reduction in funding, and the understanding that they can play a role in ensuring that the organisation that they love and are committed to has a long-term future. And as that culture is changing then people are now looking at arts organisations as a real option in their wills as organisations that have meant something to them, that have played an important role in their life and brought great joy, and something they would like to make a contribution back to in their will,’ he said.
This change in the cultural landscape has also been observed at the Sydney Theatre Company.
‘STC has been fortunate to receive a number of unsolicited bequests from supporters and artists that have had a long history with the company. In recent times however, we have seen an increase in the number of people that are still actively engaged with the company, advising us of their intention to bequest part of their estates,’ a spokesperson for the company said.
‘This growing trend is a wonderful way for those who enjoy being part of the life of the company to make a meaningful difference, even if they don’t have the capacity to do it right now. It is certainly an area we are looking at more closely as, in addition to the funding benefits, it’s a wonderful way to build closer relationships within our community.’
Resting in peace
Lorcan Hopper and Chris Dyke in Restless Dance Theatre’s Intimate Space at the 2017 Adelaide Festival. Photo by Shane Reid.
You don’t have to work at a major performing arts company like WASO or The Australian Ballet to be aware of the value of bequests. Adelaide-based company Restless Dance Theatre has recently developed a bequest program as part of a wider fundraising program which the company is rolling out.
‘We’re yet to launch that bequest program, which we’ve called “Rest with Restless”, in any big way,’ said Development Manager Belinda Hellyer.
‘What we’re hoping to do is to secure our first bequester and have that first person take it out into the world for us and tell others why they chose to bequest to us. So that’s our plan for promoting it.
‘The funny thing is that there may be people out there who’ve already made a bequest to our company that we’re unaware of – but in terms of our program, it’s all really new and we’re all very excited to see where this might go for us,’ she continued.
‘The other thing that we’ve done since I’ve been here, which is about 18 months, we’ve established a donor circle, we’ve established our first ever major fundraising campaign – that was supported by Creative Partnerships Australia and we made our target, we blitzed our target. And we’ve secured some major funding through private foundations.’
Unlike The Australian Ballet and WASO, where bequests are paid into The Australian Ballet Foundation and the Endowment Fund for the Orchestra respectively, Restless have a more open approach to how bequests will be spent.
‘We have said that we will use our funds in the most effective and valuable way for us, and that that may include investment to create perpetual income; but regardless all of the funds will be used to support our programs and our operations. So we’ve tried not to lock ourselves into all the money being invested or all the money going directly into our programs – we will use it in the most effective way that was needed at the time, so that we can respond to what is needed,’ Hellyer explained.
Population trends
Australia has an aging population; government figures suggest that the number of Australians aged 65 and over will increase from around 2.5 million in 2002 to 6.2 million in 2042, i.e. from around 13% of the population to around 25%. Will this impact on the giving of bequests in the coming years?
‘The short answer is yes, I think, and why would that be so? I think there’s a more general wealth, there’s more wealth across community than there ever was before because of an aging population,’ said Watkins.
‘And for people who are retiring, the kids have got their own money and the parents are out spending the kids’ inheritance if you like, so the sorts of people who are leaving us bequests are either single, or if they have a family, it’s usually a percentage of their estate. One family said, “Well the Ballet has been very important to our life and our children will be relatively okay in their lives so we’ll just give you an equal share of our estate amongst our four children” – so we get a fifth of their estate. It’s lovely, you know? It’s fantastic.’
Another demographic shift has resulted in more Australians living alone, which could also have an impact on the future of philanthropy and bequest programs, according to Whitehead.
‘It’s something I keep coming back to – we talk about WASO having a community of supporters and that’s how we feel about our donors and about our subscribers, and that’s how they feel as well. They feel a part of the Orchestra. And for those who are living alone, either long term or because a partner has passed away, this is where they are able to make connections with like-minded people of a similar age to them, a similar life experience to them, and we see that on a regular basis – that this is an area where they can feel less isolated and feel a part of something,’ he said.
Gently and respectfully leveraging such engagement can then benefit the company financially. ‘It is about using those activities to build a relationship directly with those who are most connected to the company and building a relationship, and out of that relationship comes the capacity to have a conversation [about bequests].’
