Are Women Donors the Key to Unlocking More Giving?

(Illustration by iStock/subkontr)

By now you’ve likely heard about the impending wealth transfer, and that close to $35 trillion will soon end up in the hands of women, complementing income they’ve earned from work. What will women choose to do with this windfall? How much will they invest, spend, share with their heirs, or give back to society? As advisors to donors and nonprofits, we know firsthand the impact this wealth can have, and we’re optimistic that much of it will be deployed through philanthropy or values-aligned investing to address our world’s most pressing problems. This isn’t just wishful thinking: data indicates that women are more generous than men.

Take the ultra-wealthy women who’ve recently made headlines for giving away their fortunes. Melinda Gates has been carving out her own giving path via Pivotal Ventures since divorcing Bill Gates and recently pledged $12 billion to women’s empowerment. MacKenzie Scott has garnered media attention for donating more than $19 billion to thousands of nonprofits in just a few years via Yield Giving. Laurene Powell Jobs has been quietly building out her philanthropic platform, Emerson Collective, for more than a decade. And it’s not just about the billionaires. These headlines portend a larger, more subtle trend that is just beginning to reshape philanthropy, and which has important implications for donors of all magnitudes, wealth managers, donor advisors, and the social sector writ large.

As longtime advisors to family and individual donors, we've noticed that our female clients tend to approach their giving differently from their spouses (in heterosexual couples), and have different needs from their male counterparts—whether they are the wealth creator, are married to a wealth creator, or have inherited wealth from their families. Curious to explore this trend, we teamed up with donor advisors Kimberly Dasher Tripp of Strategy for Scale and Miki Akimoto of the National Center for Family Philanthropy (NCFP) to run a pilot program advising a small group of newly wealthy Bay Area women on their giving. We also scanned the academic research on women donors, attended relevant conferences such as Women Moving Millions, and interviewed a number of leaders in the women donors space.

Our conclusion? The future of philanthropy is female—and women are a critical leverage point to unlocking more, more impactful, and more equitable giving over the next decade.

Can Women Get Philanthropy Unstuck?

It has become common wisdom in the social sector that too much philanthropic capital is sitting on the sidelines, even as the world faces extraordinary social, political, and environmental challenges. The past two decades have seen unprecedented wealth creation coupled with rising income inequality, resulting in a new class of centi-millionaires and billionaires. The number of US billionaires is approaching 800, with almost 3,000 globally. There are now roughly 10,000 American centi-millionaires and nearly 3 million US households with net wealth between $10 million and $50 million. We are truly living in a new “gilded age.”

Simultaneously, the wealth management, impact investing, and philanthropic sectors are also undergoing a period of rapid expansion, disruption, and innovation. The last decade has seen an explosion in donor advising and education groups, giving circles, pooled or collaborative funds, impact investing networks, philanthropic prizes, and pledges. Yet despite all these offerings, most of the ultra-wealthy are still giving less than 1 percent of their assets, even as their investments continue to grow at 10 percent or more annually. In short, philanthropy has a math problem.

Many of these new donors have the best intentions—some have even signed the famous Giving Pledge—but they are getting stuck for a multitude of reasons. Many are young (in their 30s-50s) and are busy running companies, creating and managing their wealth, and raising families. There are also real psychological barriers to giving as recently uncovered in a report by our colleagues at NCFP and Arabella. Additionally, financial vehicles like donor-advised funds (DAFs) allow ultra-high-net-wealth individuals to receive an immediate tax break, without any carrots or sticks forcing them to shift the funds to nonprofits.

Compounding this, philanthropy has become more complicated: today’s donors aspire to be strategic, leverage multiple vehicles (DAFs, LLCs, foundations, C4s, PACs, etc.), use their full capital stack, create systems-level change, measure their impact, and embrace trust-based approaches. Further complicating matters is the highly fragmented social sector, with thousands of worthy organizations tackling deep-seated problems, from climate change to homelessness to protecting democracy. Donors look out at this complicated landscape and, with no real incentive to give, end up paralyzed.

But there are emerging solutions to this philanthropic gridlock, including focusing on women as important levers for change. We believe women are critical to unlocking philanthropic capital, not only because they’re beginning to exert more influence over family wealth and financial decision-making; they are also much more involved in their communities, are more inclined to give back than men, and are more likely to align their capital with their values.

Indeed, there is significant data to show that women are coming into their own financially and in philanthropy. Women now control one-third of all US household financial assets (roughly $10 trillion) and 40 percent of the world’s wealth. In high-net-wealth households, women are already the primary or joint decision-maker on purchases, spending, and investments. They already influence 85 percent of consumer spending, and research shows they now influence or make 85 percent of a family’s philanthropy-related decisions, as well.

In addition, women stand to inherit twice from the impending wealth transfer over the next decade: from their (boomer) parents, and from male partners in heterosexual couples, whom they often outlive. This is in addition to money women have earned and invested themselves. By 2030, according to McKinsey, women will control 70 percent of the estimated $50 trillion asset transfer from baby boomers. So, if the social sector wants to “skate to where the puck is going,” and move more money, we should all be focusing more on women.

Women Give Differently

From our work advising women donors, we’ve observed notable differences in how women approach their philanthropy, which is backed up by data and research from the Women’s Philanthropy Institute (WPI) at Indiana University. For one, women still face unique barriers to philanthropy and impact investing: this is in part because, until very recently, men were more traditionally the breadwinners, heirs of family fortunes, and managers of family finances. As a result, the entire wealth management industry has grown up around men’s needs, and women haven’t been encouraged or supported to take charge of their assets. Women are more likely to feel conflicted about their wealth and therefore want support to begin their giving, but the industry hasn’t kept pace or adapted to women’s needs.

But we’ve also identified a number of ways for women donors to lean into their unique strengths to increase both their impact and their overall satisfaction with giving. According to the WPI, women’s giving differs from that of men along the following dimensions (this is a summary of multiple reports):

• Women give more as a percentage of assets: Single women are more likely to give than single men; they give more and to more causes. Married women socialize their spouses into giving.
• Women give more broadly than men: Women spread their giving across more organizations, whereas men concentrate it into fewer, larger grants, often to large institutions.
• Women are more hands-on: Women volunteer more than men, including at places where they donate (i.e. their time and talent are more correlated with their treasure.)
• Women are more collaborative: Women are more likely to engage in collaborative giving than men (e.g. a giving circle). They are also more likely to ask others for input into their giving.
• Women are more relational: Women are more likely to involve multiple generations of the family, and they are better at communicating with their nonprofit grantees than men.
• Women give with a gender lens: Not surprisingly, women tend to give more to causes that support women and girls. They are also more likely to give to racial justice and equity.

From the Margins to the Center

Because women give differently, it also makes sense that they want to be engaged differently by their wealth managers and donor advisors, and not treated the same as, or lesser than, male peers. But despite the greater economic power that women have gained, they are still too marginalized in wealth management, overlooked as leaders in philanthropy, and lumped in with their spouses. We’ve heard so many stories of women sitting silently as their wealth manager or advisor directs the discussion and decision-making to their spouse. We’ve also heard of nonprofits requesting board service from a male spouse when he is less qualified for the role than his wife. We believe there are a number of ways wealth management and philanthropy professionals can adapt their approach to better serve this population and, in the process, strengthen the support they provide to their entire client base, irrespective of gender.

In fact, data from McKinsey shows that 85 percent of wealth managers are male; and 70 percent of (heterosexual) women fire their wealth manager when their spouse dies—a sign the industry has not yet adequately addressed their unique needs. Because philanthropy is a subset of wealth creation and wealth management, it’s not surprising that it mirrors the larger gender and racial dynamics of capitalism. Though women are increasingly controlling more assets and making more financial decisions, many wealth management firms aren’t yet cultivating women as clients, or having their internal staffing, leadership, and culture reflect this.

In philanthropy, by contrast, there is little data on the gender makeup of donor advising or philanthropic serving organizations (PSOs). Anecdotally, it appears that women (and BIPOC leaders) have made recent in-roads into leading groups like Arabella Advisors, Rockefeller Philanthropy Advisors, and many boutique firms; and the majority of collaborative funds are now led by women. However, most philanthropy still does not have a gender lens or take women’s perspectives into account. The majority of large established foundations were set up by and for men, with female spouses as an afterthought. Even as family philanthropy has begun to include women and the next generation, women and BIPOC leaders have been historically underrepresented in trustee leadership. And women-led nonprofits get less funding than male-led organizations; many foundation pipelines have a gender and racial bias baked in.

Compounding this, women and girls issues are significantly underfunded, representing less than two percent of global giving, despite being at the center of the UN’s Sustainable Development Goals, and being a proven leverage point for greater impact on almost any issue. Particularly in the United States, there’s not enough conversation about funding women and girls, in part because of the biases in the wealth management and philanthropic advising industries. While the sector has been engaged recently in conversations about racial equity and justice, gender equity has continued to be neglected.

What Do Women Want?

The wealth management and donor advising fields can do a lot to take women more seriously and center them in their offerings, the same way many groups have begun to center racial justice and equity. In fact, McKinsey’s study on gender dynamics in wealth management has insights that are also applicable for donor advisors and other philanthropic intermediaries:

“Over the next three to five years, as women increasingly take responsibility for making their households’ financial decisions, they will become the critical battleground for wealth management firms. Many leading companies have already articulated their commitment to meeting women’s needs.…However, such measures are no longer enough. As wealth begins to pour into the hands of women, firms will need to commit to a much more systematic approach—transforming their business and client-service models in ways that will acquire, retain, and serve women as long-term investors.”

We would argue that the philanthropic and donor-advising fields should also heed this timely advice. For wealth management or donor advising firms looking to engage more women—and engage them more effectively—in their giving, we offer the following lessons learned from our work:

• Take women seriously: One of the reasons so many (heterosexual) widows fire their wealth manager upon the death of a spouse is they were not listened to by their advisor. So when they are finally empowered to make decisions, they vote with their feet and find someone who doesn’t patronize, ignore, or mansplain to them. Whether a wealth-management firm or a donor advising shop, it will be harder to attract and retain women as clients without taking them seriously and centering their needs in product or service offerings.
• DEI includes gender: Donor advising as a profession is beginning to diversify, according to a recent study by Daylight Advisors that found 51 percent of new entrants to the field (<10 years experience) are BIPOC, and 65 percent are female. However, this is decidedly not the case in wealth management, which has a long way to go to diversify its talent to reflect the gender and racial diversity of the larger population and emerging client demographics. Nor have the cultures of these firms been designed with an inclusion and belonging lens for BIPOC or female leaders. Wealth managers and donor advisors need to approach DEI with a broader lens.
• Help women find their “tribe”: We know from the research and our own experience that many women prefer to have help with their giving or to give in partnership with their peers. In some cases, our women clients have found the support they need working with a trusted wealth manager or donor advisor who can help them navigate historically male domains. For other women, it can mean joining a giving circle, a donor education program or network—like the Bay Area groups we’re running—or a women’s foundation, where they can give and learn collectively. Regardless, our experience has shown us that women are more likely to give, to give more, and to give more effectively when they are in the company of other women.
• Use both the head and the heart: We believe that philanthropy at its best is a combination of the heart and the head. The field’s focus on strategic philanthropy over the past few decades put emphasis on rational, logical, more masculine models, rather than on empathy, generosity, and trust—traits that can resonate more with women. Ultimately, the most satisfied donors, male or female, find the middle path between “strategic” and “trust-based” giving, and find ways to engage both their heads and their hearts in this work. We also encourage our women clients to find joy in giving in order for it to be sustainable—having impact and being emotionally satisfied are not mutually exclusive.
• Empower women to lead: There is no single right way to give, regardless of gender. Philanthropy is a developmental journey that involves taking risks, learning, and adapting over time; it can encompass myriad approaches, archetypes, vehicles, strategies, and tactics along the way. Women often need more support early on than men to be comfortable taking risks and making mistakes. But the rewards can be great. Over time, we’ve seen women clients stepping into their own power, becoming more comfortable, and assuming leadership of their family’s philanthropy. This can mean taking the helm of a multi-generational foundation, organizing a couple’s giving, or engaging one’s children in the work. It can also mean women navigating a divorce, or generational transfer from a male patriarch, and transitioning into a new life phase through their philanthropy.
• Research and innovate: As our work on this article has uncovered, there is data out there with respect to how women give differently, and their underrepresentation in the wealth management and donor advising industries. What’s missing is more research and rigorous data on what women actually want—both in wealth management and in philanthropic giving—and how product offerings, programs, or services would be different if designed around women. We welcome the opportunity to be part of this conversation going forward, and to collaborate on additional research and innovation with respect to women’s needs.

The future of the wealth management and the philanthropic sectors belongs to those who take the time to identify what women want, and then give it to them. Just as these sectors are being transformed by greater racial diversification, they must also anticipate and prepare for the coming wave of women and wealth. Those organizations that do not adapt risk losing clients, jeopardizing their business models, and becoming irrelevant. Even more importantly, firms that don’t prepare to meet this moment will also miss out on a huge opportunity for social and environmental impact. We strongly believe that women are one of the most important keys to unlocking more philanthropic capital over the next decade. If we don’t take women seriously as a field, and provide them with relevant guidance, they won't give as much, won't urge others to give, and will be held back from helping the sector as a whole.

Read more stories by Heather McLeod Grant & Jessica Robinson Love.