Information from a number of prominent national charities shows that lawyers potentially have an important role in ensuring that bequests match the will-maker’s wish with the charity’s own capabilities.
The key message from the charity sector seems to be that charities are ready and willing to discuss the best way of ensuring that someone who wants to leave them a bequest for a particular purpose or to a particular area achieves that purpose.
New Zealanders bequeath over $190 million annually to registered charities (“Will it go to charity?” LawTalk 872, 28 August 2015). Some lawyers have pointed to difficulties with achieving the required precision to ensure that what is wanted is possible.
Palmerston North lawyer and former NZLS Manawatu branch President Chris Robertson says some of his clients have had problems with achieving the purpose of an intended bequest.
“I have encountered instances where will-makers have expressed reservations about making bequests to charities which do not undertake to ascribe the monies in a specific – and desired – manner,” he says.
Mr Robertson says he has spoken to one national charity which said that all monies receipted by way of legacies are held in a “legacy account”.
“From this monies are spent within the wide canvas of the charity’s core works. The payments from a legacy account are not necessarily expended in the manner the will-maker may have earnestly wished,” he says.
New Zealand’s largest national charities and those which receive a high proportion of income from bequests were asked to provide some information on just how specific a bequest needs to be. From the responses received, it is clear that lawyers probably need to advise their clients to check with the charitable organisation if they want it to use their bequest in a particular locality or for a defined purpose.
It seems to be a matter of balancing individual wishes with the organisational constraints on the particular charity. Many of our national charities are structured along regional lines and the regions may operate with a high degree of autonomy. The SPCA, for example, operates as 46 separate organisations. Presbyterian Support is a federation of seven regional organisations based on regions set up over a century ago. The charities all do their best to meet the wishes of donors or will-makers, but they must all operate within the parameters of their organisational structure and resources.
A specific bequest which “goes wrong” because a region has ceased to exist or the particular charity no longer carries out the specified work helps no one. All charities contacted for the information below welcome contact from will-makers and their legal advisers to ensure that a bequest meets the wishes of everyone concerned.
Linda Thompson, of Asthma NZ, says people may absolutely direct that their bequest be used in a specific region. Defining it is completely up to the person making the bequest but ultimately the broader the area, the easier it will be to adhere to the terms. Will-makers may also direct use for a specific purpose.
“Where possible we would, however, encourage people wishing to make a bequest to make it as general as possible in the trust that any money will be used both ethically and responsibly,” she says. “Perhaps limiting it to use as an endowment (giving in perpetuity) if they are not comfortable to give it for general purposes.”
Cancer Society of New Zealand
All bequests to the Cancer Society are directed to the division where they are made, says Information Systems and Communications Manager Matt McILraith.
“So, for example, if someone from Christchurch leaves a bequest, it is directed to the Canterbury-West Coast division.
“As all of the divisions do operate regional offices, it is possible for someone in New Plymouth (for example) to donate to their local branch. In these cases, the bequest would be paid to the division office (in New Plymouth’s case, the Central Districts federation), with the funds then steered to the regional office concerned,” he says.
Mr McILraith says a bequest can be directed to a specific purpose: “In these instances, they would need to direct that the funds go to the Cancer Society National Office Inc for the specific purpose concerned (say research). If no specific purpose is attached, the funds would go directly to their local division.”
CCS Disability Action
Joy Gunn, National Manager Quality, Innovation & Development, says the organisation has 17 incorporated societies, including its National Office, and bequests can be left to any of these entities.
“Where a geographical area is important, using the territorial boundaries could be a good idea. Again though, it may be good for people to check with us as some geographical areas may be well serviced but a smaller, rural area not far away may be better able to utilise the funds. However, we appreciate people have loyalties to areas – and it’s their money,” she says.
Bequests may also be made for a specific purpose. “Although if people are not as familiar with our services today (but have had a historic relationship with us) it may be best to contact us to ensure we still undertake the type of work for which funds will be left to us. As an example, we no longer own or run residential services for disabled adults.”
Ms Gunn says a small percentage of all bequests – 5% – is used for a national Social Innovation Fund. “This funding allows us to develop new programmes all over New Zealand and undertake research or projects which benefit the whole organisation,” she says.
GirlGuiding New Zealand
Marketing and Fundraising Co-ordinator Bobbi Oliver says the organisation is introducing a centralised business and administrative structure, with fundraising and bequests part of this centralised process.
“Bequests are still welcome to geographical regions and can be tagged for special purposes for the benefit of the girls,” she says. “However, as an organisation we would prefer the bequest to be of monetary value and not tagged to specific purposes such as buildings which can limit our ability to respond to the girls’ needs.”
Haemophilia Foundation of New Zealand
Chief Executive Richard Chambers says people may direct use of their bequest in a specific region, but it can be more challenging on some regions if the number of people with bleeding disorders is limited. Provincial or regional boundaries are preferred. “If an area gets too small it becomes hard to honour our commitment to the donor,” he says.
Bequests may also be directed to be used for a specific purpose as long as they are directly related to the purpose of the Foundation: “Improving the lives of people with bleeding disorders”.
Bequest and Donor Relations Specialist Karen Miller says there are 19 branches around New Zealand and will-makers can direct that a gift is used in a specific region by naming the branch that they want to support.
“The Heart Foundation is happy to accept gifts in wills that outline a specific purpose. Although the Foundation’s bequest brochure details a paragraph drafted specially to help people set up a gift in their will, the Foundation encourages supporters and their solicitors to ask for further information about their work,” she says.
“A recent bequest was made to the Heart Foundation’s Tairawhiti branch in Gisborne. The bequest came from a 95-year-old local woman who wanted to support ‘children’s well-being’. This allowed the Heart Foundation to purchase tangible items for our staff in Gisborne to work in schools and the community with young people. A new ‘fat kit’ will allow our Gisborne staff to demonstrate the fat content in ‘fast foods’ and to promote healthy lifestyles. This gift also allowed the reprinting of vital resources such as our Kids in the Kitchen cookbook and Cheap Eats recipe guide. We are delighted that we were able to achieve an outcome that met the expectations of all involved.”
Kidney Health NZ
Chief Executive Officer Max Reid says as well as the national organisation representing the needs of kidney patients and their families throughout New Zealand, there are some 15-18 local and regional kidney support groups throughout the country.
“Some are larger than others, and incorporated entities in their own right; others have no legal status. Those with legal status are, of course, able to receive bequests and donations in their own right.”
Mr Reid says people may direct his organisation to use a bequest in a specific region or for a specific purpose – as long as it is within the purpose for which the Constitution provides. It would attempt to honour any reasonable request. More often than not, the bequests received have no tags, whether in terms of geography or purpose.
Leukaemia & Blood Cancer New Zealand
“Wherever possible we try and accommodate regional requests,” says Communications and Fundraising Manager Georgie Hackett. “It’s really important that we have the conversation with people while they are making their will to ensure that their requests can be realised within the work we undertake in each region.”
She says the charity has a team of patient support services co-ordinators who operate across the four regions Auckland/Northland, Midland, Lower North Island, and South Island “so we would generally ask that funds are allocated within those regions”.
A meeting with benefactors to accommodate their wishes for specific purposes is appreciated, Ms Hackett says. “It is such a lost opportunity, however, to come across the rare situations when use of the funds is so finely specified that they may not fit the purpose of the organisation and the funds cannot be used.”
National Grants Fundraiser Ruth Button says bequests can be directed to use in a specific region provided it is a region where one of Lifeline’s eight branches is located. “Lawyers can contact us if they need to check the regions our branches are located in. Bequests can also be directed for use nationally as we are a national charity.”
Ms Button says bequests can be directed to be used for a specific purpose provided it fits the work Lifeline does – “for example, volunteer training, helpline costs, counselling, operational costs, etc.” She says a bequest can also be directed to a specific service such as 0800 LIFELINE, 0800 KIDSLINE, the suicide crisis line, 0800 TAUTOKO, or face-to-face counselling: “Our accounting systems allow us to allocate and track funding by regional branch and service.”
Melanoma New Zealand
Chief Executive Officer Linda Flay says while she can understand that some people would want a bequest to go to their local area, it can be very difficult for a national organisation to specifically tag bequests to that region.
“It may also be for the greater good to have it in the national pot as often investment in progress such as research/awareness can have far-reaching benefits for everyone no matter where you come from,” she says.
“We are not able to utilise benefits for a specific region but could utilise bequests for a specific purpose as long as that purpose was in alignment with our strategic plan.
Presbyterian Support New Zealand
National Executive Administrator Taone O’Regan says will-makers may specify use in a region or for particular purposes.
“Presbyterian Support has a policy of using all donations and bequests in the area from which they originate or are named specifically for – either services for children and families (Family Works) or services for older people (Enliven). Each of the Presbyterian Support regions is locally focused and committed to ensuring the value from bequests is directly targeted to the areas that need it in their region,” she says.
Ms O’Regan says bequests are directed to whichever of the two service types best suits the intent of the bequest. If no intent is identified, the region uses it in the service or community that needs it most in that region.
“If a donation is made to the national organisation we attempt to clarify where the donor came from and direct it to that region. We aim to do the same with a bequest if the terms of the bequest enable us to.”
Graeme Cross of the Salvation Army says the organisation has no problem with people wanting to leave a bequest to a specific geographic area or for a specific purpose. He says it is up to the will-maker how they seek to define the area.
“Obviously the more restrictive the testator seeks to make the gift, whether as to region or application, the greater the potential for an organisation to have difficulty in being able to apply that gift as instructed by the testator,” he says.
“Although the work of The Salvation Army is very varied and throughout New Zealand, the more restrictive the intended gifting, the more advisable it would be for either the testator or the solicitor to check with us to make sure that the conditions sought to be imposed won’t lead to any difficulty in the eventual application of the gift. We have people throughout New Zealand who have the knowledge and ability to deal with such inquiries.”
A federated structure means the SPCA is 46 separate organisations, and this means some care is needed. People needing to leave their bequest to the national body of the SPCA need to leave it to the Royal New Zealand SPCA. If they want it to go to a specific region, they need to give the name of the local SPCA they want it to go to.
The SPCA has also advised that people need to take care about how they express the purpose of their bequest because sometimes it may not be a viable project for the organisation to run.
Women’s Refuge New Zealand
Heather Newell says Women’s Refuge is a collective of independent refuges which are based regionally. The service is national. It therefore has no difficulty in dealing with bequests that might be for a specific region, or a specific purpose.
“However, of course, we would prefer bequests which are untagged or non-specific,” she says. “We do not know in the future whether a particular refuge will still exist, whether it will still have the same name, or whether the donor’s intentions are clear. In some of our regions there are two or more refuges. So our general recommendation to anyone inquiring is that they may wish to leave it to the national office but that the donation is used in a particular region. This seems fair as we don’t know now what the needs will be in that region in the future.”
Ms Newell says the first priority is to the donor: “It’s not up to us to specify how someone’s special gift is to be used.”