Talkin’ About a Revolution in Female Charitable Giving

By Esther Hanscom, Hanscom Consulting Inc.

“We make a living by what we get, but we make a life by what we give” – Winston Churchill

So reads the quote on the site, Women In Philanthropy, an organization for women transforming the
South Carolina Midlands community through active and collective philanthropic investment.

The group is in partnership with United Way of the Midlands and the Central Carolina Community Foundation. This is one of the many philanthropic groups solely supported by women across the United States.

With women commanding more than half of the U.S. wealth and on track to hold two-thirds of it by 2030, it appears that a seismic shift in the way philanthropic endeavors are doled out to various charities and foundations is underway. While the University of Tennessee Alliance of Women Philanthropists reports that men are more inclined to leave money to the arts and humanities, a majority of participants surveyed by the National Foundation for Women Business Owners identified education as one of the top three causes they support, followed by women-related groups and the arts. Other beneficiaries include health-related charities, religious organizations, youth-related groups, social and human services, local community service groups, political organizations, and environmental issues.

Women Donors are Looking for Change

Of those in the wealthiest tier of the US — defined by the I.R.S. as individuals with assets of at least $1.5 million — 43 percent are women. And unlike the women who preceded them — old-school matrons who gave to the museum and the symphony and their husbands’ alma maters — these givers are more likely to use their wealth deliberately and systematically to aid women in need.” The article goes on to say that currently, more than 145 funds, with assets of nearly half a billion dollars, exist to improve the lives of women and girls.

Kay Sprinkel Grace, a San Francisco consultant to nonprofit groups, agrees that issues are important to female donors. “Women philanthropists,” she told the Santa Fe New Mexican, ” … want to see change. They see change in terms of fundamental issues. So they go from institution to institution, searching for one that deals with their issue.”

“Seventy percent of people living in poverty around the world are women and children,” says Christine Grumm, president and C.E.O. of the Women’s Funding Network. “If women have a roof over their heads and a home free of violence, and good and affordable health care, then so do children. In the larger picture, it’s not just about women, but entire communities. Women are the conduits through which change is made.”

So where is the money trail coming from?

According to the Council on Foundations and Community Foundations of America, “between 2010 and 2015, an estimated $12.5 trillion will transfer into the hands of baby boomer women. Most will eventually have sole custody of those assets, as they are likely to outlive their husbands and other male relatives.”

And, women-owned businesses today are the fastest-growing sector of the U.S. economy, representing $3.3 trillion in purchasing power.

One of the other driving forces behind women’s newfound financial power—and philanthropic mindset—is entrepreneurship. Between 1997 and 2004, the number of privately held, women-owned businesses in major metropolitan areas soared by 30 percent, compared to a 10 percent growth rate for all firms, according to the Center for Women’s Business Research. Today nearly half of all privately held firms are at least 50 percent owned by a woman or women.

Contrary to popular belief, women business owners are more willing than the general population to take risks in securing financing and making investments. “These women are entering the economic mainstream and serving as role models for all women who want to grow their businesses,” says Myra M. Hart, chair of the Center for Women’s Business Research and former professor at Harvard Business School.

With this transfer of 12.5 trillion dollars into women’s hands within the next 5 years and female entrepreneurship growing by leaps and bounds, one can only marvel at the possibilities that will take place shortly.

Potential Next Steps

If you’re one who is about to become the benefactor of a transfer of wealth or would like to use the profits of your business to make a big difference in the near future, one must consider a major benefit to charitable endeavors this year. According to Carolyn Martello Spaulding, an Estate Planning Attorney at David Blake & Associates, in Boston Massachusetts, the Federal Government is offering major tax deductions for charitable gifting.

“2010 is historically an unusual year in that it is the first time in generations that there is no Federal Estate Tax on those who die this year. However, the wealthy should start planning now because if Congress takes no action, in 2011, the estate tax will return in full force. For those who die with over one million dollars in assets next year in 2011, there will be an estate tax of up to 55 percent.”

She continued, “One way to plan to most reduce potential estate taxes is to set up a charitable gifting or estate plan. Not only will these sort of charitable plans reduce taxes but they also allow a woman to develop her own personal charitable legacy. Exploring your individual charitable intent and goals is a very deeply personal and fulfilling process.”

Indeed, Winston Churchill would approve.