Controlling trillions, women drive charitable giving
(Reuters) - When Allison Lowe-Fotos turned 30, she didn't want gifts. Instead, she asked friends and family to donate online to the Chicago Foundation for Women. "Much to my surprise, I raised more than $800," says Lowe-Fotos, a social worker who serves on group's Young Women's Leadership Council. "It was empowering to know that my family and friends wanted to support my passion for this cause."
With her birthday request, Lowe-Fotos furthered what has increasingly become a fundamental truth in today's philanthropic world: Women are driving charitable giving. In fact, three out of four individuals in households with incomes of $200,000 or more report women are either the sole decision maker or equal partner in directing their family's philanthropy, according a new Bank of America Merrill Lynch survey released today.
"Women in this country currently hold the majority of wealth," says Claire Costello, senior vice president and national foundation executive for Bank of America Merrill Lynch. "So it behooves everyone in the nonprofit sector to pay attention to the financial clout and moral imagination of women as they really determine where dollars go."
Because they live longer than men, women could oversee more than $41 trillion passed from generation to generation during the next 50 years, according to the Center for Philanthropy at Indiana University, which researched the Bank of America report. For most women, however, philanthropy is much more than writing a check.
"Women give to causes close to their heart," says Lisa Dietlin, a Chicago-based philanthropic adviser. "They get directly involved, either by volunteering or providing ideas and problem-solving to make an organization better."
Not surprisingly, women's ongoing rise in philanthropy parallels their growing presence in the workplace and own accumulation of personal wealth. Also at work, however, has been the expansion of women's funding networks across the country during the last two decades. These organizations, usually community-based, typically grant anywhere from $10,000 to $2 million annually. More importantly, though, they provide women donors with a sense of collective impact.
"It's recognizing that we can do more together than we ever could alone," says Tracy Johnson, director of the San Diego Women's Foundation, which usually awards grants of $250,000 or more. "Every member puts $2,000 in the pot for five years to begin, and now you have something truly significant."
Many women first learn about a cause or funding network at a friend's kitchen table or in their living room. Jill Hammond, for instance, joined the Washington State-based Jewish Women's Funding Network in 2006 at the request of a close friend. She and its 49 other members solicit and vet grant proposals. Where the group's annual $25,000 grant goes is decided by ballot.
"Discussions are lively and everyone has a say," Hammond says. "What I appreciate most is that it is truly democratic."
Even on their own, women tend to be more strategic in their philanthropy than men, the Bank of America findings suggest. They are more inclined to create a plan and budget as well as undertake more due diligence before meting out funds.
"Women donors want to be partners, meet the leadership, go out into the field and see what a nonprofit really does on a day-to-day basis," says Sara Hall, founder of New Philanthropic Advisors, a Boston-based firm that counsels high-net-worth women donors. "They do real analysis and research."
Consider Sasha Rabsey, one of Hall's clients. A stay-at-home mom from the San Francisco Bay area, Rabsey three years ago packed up her family and spent five weeks in Ghana caring for sick children. The experience led Rabsey to form her own foundation, the HOW Fund, which has now given out nearly $200,000 to grassroots nonprofit groups throughout Africa. "I go on site visits and ask a ton of questions," she says. "Because being actively engaged is the only way to do this if you want to be successful."
This hands-on approach may also be why women tend to take more risks in their giving - and they are more willing than men to stop giving if the results aren't there. "Women are tenacious, dogged and willing to work on solving any problem an organization has," Dietlin says. "But if an organization does give back in kind, most women donors aren't going to give again."
WHERE MALE AND FEMALE DONORS DIFFER
At the Dallas Women's Foundation, one of its success stories is a donor who, when she first joined, only gave about $10,000 per year. Five years later, she was a $1 million donor, says Roslyn Dawson Thompson, who joined the network at its inception in 1985 as a donor and now is its CEO. "She had the means but didn't believe she had the power or the right to give more."
Indeed, two main distinctions in men and women's giving patterns is consistency and size. Men will often give every year to the same cause, frequently larger institutions such as their alma maters, according to both the Bank of America survey and other studies, and their donations tend to be larger. Women instead spread their wealth, giving smaller amounts to several groups.
"Women have great power in philanthropy," says K. Sujata, president of the Chicago Foundation for Women. "We're encouraging members not to be afraid to give in a way that makes a deep commitment both over time and in terms of the dollar amount."
Sujata also wants women to take credit for their giving. "They're giving to causes that are changing lives," she says. "Be bold about saying yes, I am directing my family's funds to this because it is important."
The author is a Reuters contributor. The opinions expressed are her own.
(Editing by Lauren Young and Beth Gladstone)