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According to a recent report by the SVB Consulting Group, the amount of worldwide wealth controlled by women will reach $72 trillion next year, or about 32% of the total wealth across the globe. Most of the private wealth that changes hands in the coming decades is likely to go to women.1
So it’s no surprise that, as their wealth grows, women’s impact on the charities they support is growing as well. But it’s growing with a distinctly female perspective, as women approach philanthropy quite differently than men.
A different approach to giving
Women typically give almost twice as much of their wealth away as men (3.5% vs. 1.8%).2 Women also are more deliberate (and more “heart-based”) in their approach to philanthropy. According to researchers at the Indiana University Lilly Family School of Philanthropy and Women’s Philanthropy Institute (WPI):3
- Women with wealth are more strategic with their charitable giving and more likely to have a budget for their giving than wealthy men.
- Women are more inclined to support health care and medical research, basic needs, arts, and the environment than men. They also are more likely to give to causes that affect girls and women. (In contrast, high-net-worth men give higher amounts to community and veterans groups, and combination organizations, such as the United Way.)
- Women are more motivated to give when they believe their gift will make a difference, the organization is efficient, and they are giving back to their communities.
- Wealthy women are more likely to volunteer their time and talents to the charitable organizations they care about than wealthy men.
The growing number of women philanthropists also has given rise to a new and distinctly female phenomenon called “giving circles.” Giving circles offer a way for wealthy women to come together, both formally and informally, and donate their money, time, and talents to a cause they all believe in. The price of entry is usually a donation of $10,000 or more. For some, like Women Moving Millions, “a global collective of committed, purposeful women,” the commitment is $1 million.
Is the money well spent?
The desire to make a measurable impact with charitable gifts is not unique to women, of course. Most donors want to be sure the money they give to a charity is used effectively. Yet, less than half of wealthy donors (49%) have put a strategy, plan, or budget for philanthropy in place.4
That’s something that Katherine M. Sheehan, J.D., Director & Senior Trust Officer at SVB Private, has observed in her work with both male and female clients. “Many of the successful business owners and executives we work with have not applied the same rigor to their giving activities as they have to growing and protecting their wealth.” Sheehan observes. “As your gifts become more significant, you’ll want to be sure your money is well spent.”
Having a strategy can help you prioritize your giving too, she says. “Once you’ve documented the purpose and focus of your giving, it’s easier to identify which charities fall outside of the guidelines you’ve set.”
Sheehan suggests these five steps for developing an effective personal strategy for philanthropy:
- Define your values and reasons for giving.
- Create a mission or goals statement based on those values.
- Research the types of charities that can help you achieve your mission.
- Decide how – and how much – you want to donate.
- Evaluate the impact of your gifts.
Your spouse, family, friends, and colleagues may be helpful sounding boards as you define your values and mission and decide what types of charities to support, she says. “But – whatever your mission, gender, or ability to give – don’t forget coordinate your charitable efforts with your wealth advisor, as well as your estate and tax planning professionals. They can help you narrow down your choices and determine the most effective timing and giving vehicles for your donations, as well as determine the most tax advantageous way to make charitable gifts from both an estate and income tax perspective.”
1 - Boston Consulting Group data as of March 2018 as reported in The Economist https://www.economist.com/graphic-detail/2018/03/08/womens-wealth-is-rising
2 Tomorrow’s Philanthropist study by Ledbury Research for Barclays Wealth https://www.home.barclays/content/dam/home-barclays/documents/citizenship/Reports-Publications/tomorrows-philanthropist.pdf
3 - Indiana University Center Lily Family School of Philanthropy and Women’s Philanthropy Institute sources:
--Giving by and for Women: Understanding high-net-worth donors’ support for women and girls, Indiana University Women’s Philanthropy Institute https://scholarworks.iupui.edu/bitstream/handle/1805/15117/giving-by-and-for-women-update180131.pdf
--The 2018 Study of High Net-Worth Philanthropy, conducted in partnership with the Indiana University Lilly Family School of Philanthropy.
--Where Do Men and Women Give? Gender Differences in the Motivations and Purposes for Charitable Giving, https://scholarworks.iupui.edu/bitstream/handle/1805/6985/Where%20Do%20Men%20and%20Women%20Give%20-%20Working%20Paper%202%20-%20Sept%202015.pdf
--Study of High Net Worth Women’s Philanthropy and The Impact of Women’s Giving Networks, Indiana University, Center on Philanthropy at Indiana University
4. Ibid., The 2018 Study of High Net-Worth Philanthropy, Indiana University Lilly Family School of Philanthropy
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