Bequests Promised vs Bequests Realised: Understanding what happens when gifts in wills don’t materialise

Startling new research has revealed that millions of dollars are being lost to the not-for-profit sector because gifts in wills are simply not reaching their intended charity.

The Bequests Promised v Bequests Realised research – aka the Missing Gifts Project – has unveiled losses of more than $40 million every year due to errors in legal processing or executors deciding not to pay the money to the intended charity.

Include a Charity and Philanthropy Australia, who partnered in commissioning the work, are now calling for urgent probate reform to ensure all gifts in wills reach the intended not-for-profit and to honour the donor’s wishes to leave a legacy to the causes they loved.

The research by Bequest Assist took a year to carry out and uncovered that an estimated 3 in 100 wills included a gift that was promised to a charity but was never paid.

Helen Beeby, Include a Charity Campaign Director, said: “This research only explored gifts in wills where the donor had notified the charities. With more than 33% of gifts in wills being completely unknown ‘windfall’ gifts, it is believed that the $40 million estimate of missing gifts could be much higher.

 “In the current system, it is up to charitable beneficiaries to ensure that every gift is realised. With the government call to double philanthropic giving in Australia by 2030, this study highlights the urgent need for Australia to reform the probate courts and adopt a model of probate like the UK to ensure all charitable bequests are fulfilled.”

The UK has a uniform, centralised approach, providing digitised wills with one low fee to purchase a will. They also have an organisation called Smee & Ford that scans all wills and informs charities of any legacy gifts.

Reforming the system would not only be valuable for charities, but it would also benefit the public, solicitors, estate planners and other wealth advisors. Jack Conway, Accredited Specialist Wills & Estates Special Counsel lawyer from Hamilton Locke Private said: ‘’Thanks to the fantastic research by Bequest Assist, with help from FIA and Include a Charity. We now know that the problem is significant both in terms of the number of missing gifts and the value of unpaid donations.

“Charities that are beneficiaries of a will are in a unique position compared to individuals, who are usually aware of the death of a relative and can enquire about any gifts left in a will and supervise the executor. For charities to make those enquiries requires a significant diversion of time and resources, which is especially hard for many smaller to mid-sized charities,” he said.

“The results of the report highlight the need for national legal reform to ensure that all charitable bequests are honoured.’”

In the national research study, more than $273,000 of missing gifts were returned to charities because of this project at the time of writing with more still being processed.

Morgan Koegel, Managing Director of Bequest Assist and the lead on the research, said: “The ways in which funds left to charities ended up going missing were diverse, but paint a clear picture that intervention is needed. Simple changes in policy would ensure that every gift left in a person’s will reaches its intended recipient.

“The results of this research concern me deeply but aren’t surprising from what I’ve observed working in estate administration for charities. They also give me great cause for hope as the solutions are obvious and achievable.”

Rebecca Moriarty, Knowledge Lead at Philanthropy Australia, said: “This has, in my view, been such a good case of collaboration between our organisations, as well as others in the sector, delivering tangible benefits and building up our knowledge and evidence base in an important area of giving.

“Philanthropy Australia aims to deliver positive value and change. The many generous bequestors in Australia want to see the not-for-profits they care about thrive and having that gift realised by their intended NFP is how we can achieve that.”

To learn more, download this document which summarises the report findings from the recently released ‘Bequests Promised vs Bequests Realised’ report.

If you are a Philanthropy Australia member you can access the full report on the Better Giving Hub.

If you are a government policy maker, journalist or other interested party and would like to request a copy of the report, please contact Rebecca Moriarty.

Find out more at Include a Charity website