What would happen if we increased or changed our marketing spend?

One of the most common questions legacy fundraisers ask, and the hardest to answer. Whether it’s input into strategic planning or a justification for investment, this perennial issue is crucial to fundraising teams of all shapes and sizes.

The question becomes even more critical as fundraising teams come under increasing pressure to justify their spend, seeking to maximise income across a wide portfolio of fundraising products.

Calculating a return on investment for legacy marketing is notoriously difficult; partly because the supporters’ ‘response’ to legacy communications is often unknown, and partly because the time lag in receiving the legacy gift is so long. Our analysis suggests that it takes - on average - around 18 years for a new legacy pledge to fully pay out.

This work can help you prove the case for legacy investment through answering such questions as:

• How much legacy income can you expect over the next 40 years if you carry on as you are now in terms of legacy marketing?
• How much additional income might you see over this time period if you increase your investment in legacy marketing?
• What is the ROI of the additional legacy marketing?
• How quickly that investment will pay back?
• How does this vary by channel of investment?
• What are the key levers you can pull to improve the return on investment?
• What KPIs should you be tracking to monitor your return?

How it works

First, we create a ‘base-case’ long-term forecast over 40 years.  This forecast assumes that your charity carries on as it has been doing, with no significant changes over this period.  In essence, this is a similar approach to our medium-term forecasts, but extended over a longer timeframe and incorporating a wide range of economic, social, demographic and legal factors that will impact legacy income over this time period.  We then use various assumptions to model how much additional income you are likely to receive as the result of additional legacy marketing and when you are likely to receive it.  This allows you to understand both the ROI of additional marketing and when and to what degree it will impact your income, over and above the base case.

What we need from you

For the base case, we require your income and bequests history as far back as possible.

For the marketing evaluation, we need: details of your past and future marketing investment, response rates to historic marketing campaigns, conversion rates and average values of your pledgers and prospects and information on the age and gender of your legators.

Not all charities are able to supply all of the data for the marketing evaluation (if, for example you have done very little marketing in the past), in which case we can use industry averages to supplement the analysis.

What you get

• 20-40-year forecasts (depending on your preference) for both a ‘base-case’ scenario and overlays of the impact of additional marketing
• Forecasts of both legacy income and notifications
• Evaluation of a range of alternative marketing investment scenarios, allowing you to test different channels and investment levels
• Comparison of scenarios across various metrics including gross income, net income, discounted income (to account for the long pay back times) and payback time
• A presentation to your team at a time and place to suit you
• PowerPoint slides and underlying data in excel

What it costs

Given the bespoke nature of these projects, they are costed individually but are typically between £7,500+VAT and £11,000+VAT. If you are already working with us on regular medium-term forecasts, then the cost will be towards the lower end.