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Household Philanthropy Financial Shift

Household Philanthropy Financial Shift

As women’s influence over wealth not only in Canada but also in the U.S. continues to rise, their unique approach to giving needs to be better understood by financial advisors and by charities.

Fiscal inequality has been a hot topic the past few months. Articles in The EconomistStanford Innovation Review and other daily publications across North America are sharing the growing gap between the world’s wealthiest people and the world’s poorest. One piece of this conversation goes deeper – looking at individual households. Fiscal inequality between spouses is also shifting. While women are moving further up the corporate ladder and closing the pay gap (though women’s pay has still not reached parity), there is still one member of a household earning more than the other. In previous generations it was predictable as who was the primary breadwinner in heterosexual households – the husband. Today, this isn’t in the case.

Workforce demographics provided by Stats Canada, and shared in a study commissioned by TD Waterhouse on women and philanthropy conducted by Investor Economics indicated that in 2011, women’s aggregate income in Canada was $443Billion or 41% of total income; by 2011, 19.4% of women made more money than their spouse and this trend has been on the rise for the past decade.

Women control around one-third of total household wealth in Canada, and according to the report, “In terms of total assets, this would represent approximately $3.2 trillion and, in terms of financial assets alone, approximately $1.1 trillion. By 2020, the level of financial wealth controlled by women will likely reach $3 trillion.” This means that women also will have a profound influence on how the largest inter-generational wealth transfer will have an effect on philanthropy. Across North America and the U.K., women are more likely than men to donate to charity. According to the 2013 U.S. Trust Insights on Wealth and Worth cited by the report, affluent women are also “twice as likely as men to say that charitable giving is the most satisfying part of having wealth.”

As women’s influence over wealth not only in Canada but also in the U.S. continues to rise, their unique approach to giving needs to be better understood by financial advisors and by charities. The matter of financial inequality within households got me thinking more about how philanthropic decisions are made in this context. So I drew on the learning provided by a panel that I moderated in December 2014 on the topic of Women and Philanthropy.

On the panel were four dynamic, strong, successful female philanthropists:



Over the course of the two-hour tea, a variety of questions were raised ranging from “How do you go about choosing charities to what should be considered when setting up a charitable giving strategy?” to “How do you include your kids and grandkids in your philanthropy decisions?” to “What role does your family’s business play in charitable activities?”

When asked, “What are the key influencers on how you make decisions around which charities to support?” the panelists identified stated that there are three influencing forces on their charitable giving:


  1. Must have an opportunity to volunteer
  2. Must have clear, easy to understand, traceable and transparent financials so that they can see where their donation was spent
  3. Must acknowledge previous donations and steward the relationship beyond the ask


These three influencers mirror what came out of the TD study; on average take up to three years before making a significant charitable donation ($10,000 or more) as opposed to their male counter-parts who make similar sized donations within 12 months. In fact, there is a direct correlation to size of gift and number of hours donated.[1]

Knowing that women approach finances differently, that they take the long-term view for philanthropy, and there is a wealth creation shift occurring from women who inherited wealth to the younger generation who created their own wealth, I think we are going to see an impact on philanthropy funding in the coming decade.

Since women are going to be controlling more and more of household disposable income but take longer to make significant donations this could have a direct impact on the cash-flow of charities. It is my opinion that this will be most notable in those charities that have traditionally depended on men to make the larger private contributions. What does this mean for the charitable sector and the advisors who are assisting families with their philanthropy decisions?

Charities are going to have to start planning now for longer funding cycles as more women control the charitable purse strings. Advisors are going to be in positions of managing philanthropy allocated assets longer before disbursement, so considering what the funding horizon looks like will have even greater importance on the asset investment management strategy.


[1] Women are more likely to make a major contribution to a charity that they donate significant time to.


Gena Rotstein is the CEO of Dexterity Ventures Inc., which creates technology solutions and tools to help advisors talk to their clients about their philanthropy and social capital questions. Follow her on Twitter @DexterityCon.

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