High-net-worth women are taking an increasingly active role in household financial planning—and that’s good news for charities.
A recent survey by Key Private Bank of 300 of its client-facing wealth advisors revealed that 52 percent have witnessed female high-net-worth clients taking larger roles in financial conversations and decision-making in the past five years. Seven out of 10 advisors surveyed expected this trend to continue for the foreseeable future.
But this result is less a prediction for the future and more of an ongoing and inevitable evolution, says Catherine O’Malley Kearney, Key’s director of trust services.
“Women are increasingly creating and inheriting wealth. Basic changes in our day-to-day life effectively make it a certainty that women will take larger roles in financial decisions.”
Many women are using this greater role to devote more funds toward charitable contributions. Key’s surveyed advisors indicate that female clients most often lead conversations centered on educating future generations (74 percent) and charitable giving (74 percent).
“Women in every wealth class give more [to charity]," says Claire Costello, national philanthropic planning executive for U.S. Trust and one of the primary forces behind U.S. Trust’s biennial High Net Worth Philanthropy Study.
“About 90 percent of household giving decisions involve women… When a giving decision is made by only one person, women are more than twice as likely to be that person," she says. Costello chalks this phenomenon up largely to women’s traditional role as the “value keepers of the family.” While men often experience philanthropy more as a means to an end, women feel the responsibility to educate the next generation more keenly, and as such, not only give more than men, but put more due diligence into their giving decisions as well.
Though she allows that both men and women share similar charitable motivations, namely the desires to give to the less fortunate, make an impact and pass on certain values, she maintains “women are simply motivated to a different degree.”
Women’s evolving financial role also has long-term implications. “Women already hold 60 percent of the wealth [in the U.S.]” And, because they’re both increasingly generating their own wealth and also benefiting from the fact that many high-net-worth women inherit twice (first from their parents and then their husbands), Costello predicts, “Soon women will control 90 percent.”
Costello maintains that in the near future “women will be the stewards of the values and the wealth.” And that means advisors should take notice.