How Advisors Can Help Women Grow Their Influence in Philanthropy

Despite the increasing influence of women in philanthropy, they face unique challenges, including lack of recognition, visibility, and mentorship opportunities. Additionally, women may not always be engaged in conversations about estate planning and charitable giving, which limits their potential impact.

GROWING INFLUENCE IN PHILANTHROPY 

• Wealth Creation: As women achieve greater financial independence and success in business and careers, their capacity to contribute to philanthropic causes has significantly increased.
• Inheritance and Control of Wealth: Women are more likely to control a significant portion of wealth through inheritance. Many are becoming primary decision-makers in family philanthropy.

UNIQUE APPROACHES TO GIVING 

• Collaborative Giving: Women often prefer collaborative approaches to philanthropy, engaging in collective giving circles and partner- ships that amplify impact.
• Focus on Relationships: Women philanthropists emphasize building relationships with the organizations and communities they support, fostering a deeper understanding of the issues and needs.
• Long-term Commitment: They tend to commit to long-term support rather than one-time donations, aiming for sustainable impact.

CREATING WIN-WINS 

As advisors, we are in unique positions to make a difference in the world with our clients and charities. Charitable gifting vehicles are mechanisms that donors can use to make charitable contributions in a tax-efficient manner.

These vehicles offer various benefits, including immediate tax deductions, the ability to support multiple charities, and sometimes the potential for ongoing income. Following are some common charitable gifting vehicles:

• Donor-advised Funds (DAFs) 
  How They Work: Donors contribute to a fund managed by a public charity and receive an immediate tax deduction. The funds can be invested and grow tax-free until the donor decides to make grants to qualified charities.
  Benefits: Flexibility in timing and amounts of gifts, potential for growth, and anonymity if desired.
• Charitable Remainder Trusts (CRTs) 
  How They Work: Donors transfer assets into an irrevocable trust, receive an immediate tax deduction, and retain an income stream for a specified period or for life. After the income period, the remaining assets go to the designated charity.
  Benefits: Provides income to the donor or other beneficiaries, immediate tax deduction, and potential to reduce estate taxes.
• Charitable Lead Trusts (CLTs) 
  How They Work: Assets are placed in a trust that provides income to a charity for a set term, after which the remaining assets go to the donor’s beneficiaries.
  Benefits: Immediate charitable deductions, potential reduction in estate and gift taxes, and a way to pass assets to heirs at a reduced tax cost.
• Private Foundations 
  How They Work: Donors establish a private, nonprofit organization to manage their charitable activities. They have control over investments and grant-making decisions.
  Benefits: Full control over grant-making, ability to involve family members, and potential for long-term impact.
• Charitable Gift Annuities 
  How They Work: Donors make a gift to a charity in exchange for a lifetime annuity. The donor receives fixed annual payments for life, and the charity receives the remaining value after the donor’s death.
  Benefits: Immediate tax deduction, fixed income stream, and potential reduction of estate taxes

Charitable gifting vehicles provide a range of options for donors to support their favorite causes while optimizing tax benefits and financial planning. Each vehicle has unique features and benefits, allowing donors to tailor their charitable giving to align with their personal, financial, and philanthropic goals.

Women as philanthropists bring distinct and impactful approaches to charitable giving. Their focus on collaboration, long-term commitment, strategic planning, and addressing systemic issues positions them as powerful agents of change in the philanthropic sector. Their growing influence and unique perspectives continue to shape the future of philanthropy, driving progress toward a more equitable and just world.

The Solution 

Financial advisors can play the following pivotal role in addressing these challenges:

• Engage Women in Estate Planning and Philanthropy: Include women in discussions about charitable giving and estate planning to make them aware of various charitable gifting vehicles and strategies.
• Promote Recognition and Visibility: Highlight and celebrate the contributions of women philanthropists to increase their visibility and encourage more women to engage in philanthropy.
• Provide Mentorship and Building Networks: Create and support networks and mentorship programs to help emerging women philanthropists learn from experienced ones and amplify their impact.
• Educating on Strategic Giving: Guide women on how to approach philanthropy strategically, focusing on long-term impact, measurable outcomes, and sustainable change.

Key Questions Financial Advisors Should Ask Their Clients 

• Philanthropic Goals and Interests 
  What causes or organizations are you passionate about?
  What impact would you like your charitable contributions to have?
• Giving Preferences 
  Do you prefer to give individually, or are you interested in collaborative giving circles or partnerships?
  Are you more inclined toward one-time donations or long-term commitments?
• How involved would you like to be in the initiatives you support (e.g. hands-on involvement versus strategic support)?
  Do you want to build relationships with the organizations and communities you support?
• Financial Considerations 
  What percentage of your wealth or income are you comfortable allocating to philanthropy?
  Are you aware of the tax benefits and financial planning advantages associated with various charitable gifting vehicles?
• Legacy and Future Planning 
  How would you like to incorporate philanthropy into your estate planning?
  Are there specific causes or organizations you want to support through your will or trust?
• Challenges and Concerns
  What concerns do you have about charitable giving (e.g. impact, recognition, tax implications)?
  How can I assist you in overcoming any aversions or barriers to philanthropic giving?
• Inspirational Examples and Role Models 
  Are there any philanthropists or charitable organizations you admire and would like to emulate?
  How do you see your philanthropic efforts influencing your family and community?

Women give a substantial and growing amount to charitable causes, influenced by their higher propensity to donate, their strategic approach to philanthropy, and the increasing control they have over significant wealth. Studies consistently show that women are generous givers, often prioritizing long-term, relationship-based philanthropy that seeks to address root causes and create sustainable impact. With the expected intergenerational wealth transfer, the role of women in philanthropy is likely to become even more prominent in the coming years. As an advisor leading with philanthropy or teaching and guiding female clients with philanthropic vehicles will be a win-win-win for you, the client, and the charity.

Written by Cary Carbonaro. Excerpted with permission from the publisher, Wiley, from Women and Wealth by Cary Carbonaro.
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