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Women today are among the most active philanthropists in the United States. In fact, according to a 2020 report from the Milken Institute, 92% of high-net-worth women give to charity. Further, as noted in BMO Wealth Management, Women in Philanthropy 2019, The Economist estimated that private wealth held by women globally increased by 50% between 2010 and 2015. These numbers are expected to continue growing, with most of the private wealth that will transition in the coming decades expected to go to women. It’s also been shown that women give away about twice as much of their wealth in philanthropy, as compared to their male counterparts. With more wealth in the hands of women who are likely to partake in philanthropy, there is much to understand about women and giving.
Women Give Differently
Generally speaking, women tend to be more attuned to the needs of their communities, including issues surrounding mental health and poverty. As such, women are more likely to pitch in when there is an identifiable need they can support. An in-depth study conducted by the Center on Philanthropy at Indiana University explored the gender gap when it comes to giving, and established four possible reasons why women lead in philanthropy:
Given this, it’s no surprise wealth managers have observed that male clients tend to favor charitable contributions for tax advantages, whereas female clients give largely because they want to help others. As Amy Hale, managing director for BMO Wealth Management in Florida and Atlanta, explains, “Women oftentimes approach philanthropy differently than their male counterparts, as they have different values and concerns about how to distribute their wealth. We see women preferring to focus more on the family as a whole, and what impact their wealth might have on their children.”
COVID-19’s Philanthropic Consequences
The pandemic has disrupted the giving habits of many by shifting their charitable interests to the immediate issues at hand. Affluent women have increased their giving and become particularly concerned with mental health issues among youth in their communities. Many female philanthropists have also become concerned with the impact of COVID shutdowns on women’s wellbeing in unsafe environments and have been funding programs that support women and children fleeing abusive situations.
One of the biggest shifts in giving during the pandemic is a greater emphasis on the local community. COVID has illuminated community needs, and the fact that there is no integrated system to manage some of these needs. Essentially, the pandemic has revealed many weaknesses in our health and social welfare programs, including low-income housing and long-term care services.
Moreover, women often manage multiple priorities at once, such as looking after families, helping children with virtual learning, and meeting professional responsibilities. With the pandemic, the pressure to find balance among these roles has increased significantly. Despite potential impediments, now more than ever, women are looking at ways to support other women.
COVID has also given many women cause to review their wealth plans, both from a cash flow and an estate planning perspective. In some cases, women have accelerated their retirement. Some of this may have been in reaction to market volatility, but certainly the global pandemic has caused many to evaluate future plans.
An Optimistic Behavioral Shift
During these unprecedented times, many women have sought involvement in philanthropic initiatives specifically because of the increased need for support. As Eileen Connolly-Keesler, President and CEO of Women’s Foundation of Collier County, Florida explains, “Educating women in the community about the needs of women and girls is key. Once people are informed of the facts, they want to be involved and make a difference.”
Although the impact of COVID will undoubtedly have lasting effects, a significant portion of society has been able to save substantially, as their lifestyle was put on hold. It will be interesting to see if we return to the same level of pre-pandemic consumerism and busyness. Will the impact be a new understanding that “less is more” and “sharing is caring”? Regarding behavior toward philanthropy, the response so far has been surprisingly optimistic.
Instilling Philanthropic Values in Children
Parents, particularly mothers, often want to see their children give back to the community in meaningful ways. How can parents foster this attitude and raise the next generation of philanthropists? As Hale explains, “It’s important to raise the next generation to understand what makes a person a good citizen, whether they’re wealthy or not, and to know that philanthropy comes in different forms — not just monetary. All of us need to value and understand the importance of hard work. Those with wealth have an even greater duty to manage their wealth effectively, give back, and be active members of their community.” When children are exposed to issues that resonate with their family, their understanding of the role they play becomes much stronger, and hopefully the work their family does can be carried forward in even more impactful ways.
The effects of the pandemic have heightened the need to address the immediate concerns in our communities, and now more than ever, women are making a large impact through their philanthropic endeavors. When equipped with an understanding of the issues facing their communities, women prove to be esteemed leaders who want to make a difference, while also passing these qualities down to the next generation. BMO Wealth Management can help ensure your philanthropy is both helpful to the world around us and tax efficient to your overall portfolio and estate plan. Our team can also help you conduct effective research that’s based on your aspirations and establish benchmarks for your giving strategies.
For more information, speak with your BMO financial professional.
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