PSA to Women Philanthropists & Impact Investors: You Aren’t Getting the Financial Resources You Need

Women philanthropists and impact investors, you need to hear this: 1) You’re most often participating in giving and investment activities at?HIGHER rates ?than men. Yet 2) you are making LESS of an impact simply because you’re not getting the financial information, and philanthropic and impact investing insights and resources you need. Lebec Consulting exists, in part, because we want to see that change.

Janine Firpo—a values-aligned investor, social innovator, and author who recently left her 35-year career to help women align their money with their greater social impact goals—perhaps said it best:

“Women do not have to donate and invest in the way we’ve been told. We do not have to buy into the approach men have been using for their philanthropy and investments. Instead, we now have a tremendous opportunity to create our own story, do things differently, and set the stage for a new narrative around women, wealth, and social change.”?

We’ve seen women like Mackenzie Scott step up and lead the way on this. And with an unprecedented amount of assets shifting into the hands of U.S. women over the next three to five years—representing a $30 trillion opportunity by the end of the decade—now is the time for this crucial conversation and change.

So, let’s dive in:

Gender Gap = Knowledge Gap?

According to the?Non-Profit Times, “Generational change is quickly shifting the philanthropic landscape—but not necessarily closing the gender gap related to charitable planning strategies… Millennial women still lagged their male counterparts in adopting [social impact] investment strategies, like?impact investing or microloans. And younger men were much more likely to have discussed philanthropic strategies with an expert. One-in-three Millennial men have had a charitable planning conversation with a financial advisor, compared to 19% of Millennial women.”

As if that’s not enough:*

• 86% of women said they wish they could do more to create positive social change, and they participated in many giving activities at higher rates than men, including volunteerism.
• 67% of women reported volunteering recently, compared to 56% of men.
• More women made non-financial gifts, bought from socially responsible businesses, or donated through social media or online giving platforms.?
• Women were more likely than men to rank hunger (45% versus 34%), access to basic health services (34% versus 27%), and access to shelter or affordable housing (22% versus 16%) as one of the top challenges facing the world. And if we look toward the?UN’s Sustainable Development Goals ?as a barometer, we know that women are on point here.?

But despite this:*

• Women were less likely than men to be aware of or engage in many financial strategies that could enable greater impact. Only 17% of women made an impact investment—purposeful investments that generate financial returns, while also helping to achieve social impact returns—compared to 25% of men.
• Among women who owned stocks or bonds, 35% were unaware that these assets can be donated to charity—a strategy that potentially minimizes the donor’s tax burden and enables them to make a larger donation.
• Only 14% of women have spoken with a financial advisor about charitable planning strategies, compared to 20% of men. For Millennials, specifically—even though they’re more likely than the average donor population to have engaged in newer forms of giving back, from supporting socially responsible businesses to donating through social media—33% of men have had a charitable planning conversation with a financial advisor, compared to only 19% of women.

*All above data provided by the?Non-Profit Times ?and?Fidelity Charitable .

So, what gives? Why aren’t women getting the resources and advice they need, especially when they’re so often the biggest drivers of giving??

Why the Disconnect??

Unfortunately, that question isn’t so simple to answer.?

First, as a women-led firm, we at Lebec Consulting can all attest that there’s a plethora of cultural nuances that are almost embedded in our DNA.?

• In?one study , which looked at 300 articles, researchers found that women were defined as “excessive spenders” across 65% of the articles aimed at them. They were advised to “limit, restrict, and take better control of shopping ‘splurges’.” 71% of articles encouraged women to seek out “vouchers, discounts, bargains, and coupons” to?save?money. Articles aimed at men, on the other hand, used words like “dare” when encouraging them to invest, spend, and achieve power.
• There’s a slew of books and other research dedicated to the?confidence gap ?among women in the workforce—not least among them?Lean In ?by Sheryl Sandberg, the COO of Facebook—and this extends to how we manage finances. Men initiate salary negotiations 4x as often as women do, and when women do negotiate, they ask for 30% less money than men. Why? In many cases, women feel like they need to be experts before making decisions or stepping into roles—whereas men tend to feel ready and able, even with a lack of experience. This absolutely extends to managing finances—including how charitable giving and investment decisions are approached and made. Ironically—though men overestimate their abilities and performance, and women underestimate both—their performance does not differ in quality.?
• Finally, it’s not lost on us that the narrative we get from the time we’re young is different from our male counterparts. The language we use matters. Girls are referred to as “good girls,” while boys are made fun of for “throwing like a girl.” Boys are encouraged to be brave, adventurous, and active, while girls are encouraged to behave like ladies. It relies on the notion that men and women are opposites, with very different qualities and roles to play.?
• We watch as strong women leaders are harangued for their personality, while men with those same traits are simply referred to as strong leaders.?
• If women focus on their careers, they might be called selfish, while men are just called driven. (Are men ever asked how they juggle work and family life? I don’t think we even need to answer that.)?
• Casual sexism—flooded with images from the media, advertisements, and entertainment—is acceptable because it’s seemingly normalized. And it is indeed ingrained in every stage of life, from pre-school to the workplace.

So, it’s no wonder that when we’re set up like that from the start—living in a system that embraces it—we approach the workplace and the world of finance differently.

Second, to close the financial literacy gap, we also need to?close the wage gap . And women’s wealth generation abilities are hampered quite a bit compared to men, particularly amid the recent pandemic. Case in point:?

1. Women left the workforce in much higher numbers in 2020 than men, largely due to lack of childcare, as children had nowhere to go while virtually learning became the norm. In fact, throughout the pandemic, women have been spending an average of?seven more hours ?per week than men on childcare. This has effectively removed about 30% of women from the workforce. And it was particularly eye-raising in December 2020—when women lost a total of 156,000 jobs, while men gained 16,000 jobs, according to CNBC.
2. Women are dramatically?underrepresented ?in science, technology, engineering, and math (STEM) careers—even as technology is our undeniable future—which greatly limits their earning potential. And this problem extends far below the surface. It’s entrenched in a system that doesn’t work—so much so that even well-intentioned men can’t seem to help. Jeff Kramer, Regional Head of Client Implementation—North America at TradingHub, is one of them. “Recruiting for STEM jobs is shockingly difficult,” he said. “I’ve literally put out job posts for new graduates at a $100k salary per year, and I’ve gotten zero female applicants. I even tried reaching out to someone at MIT who specializes in women and biopic recruiting—but because I was only recruiting for a few positions, she didn’t give me the time of day. So, this is where I’m at. I want to be a part of the solution, but I just don’t know how.”
3. Women, outside of marketing and communications roles, are very underrepresented in the financial services industry—which also limits their earning potential. In fact, it’s so staggering that?99% ?of investment management firms are owned by white men, 88% of senior fund managers are white, and more than 70% of junior professional investors are white. Women make up only 8% of investors.
4. In line with this, we know that they invest at lower rates than men (41% versus 51%, according to a 2018 MassMutual study). And yet, female investors earn better returns than men—40 basis points, on average, which adds up over time. According to Forbes, this is largely attributable to women’s inclination toward “research, risk aversion, and self-control.”?

What Can Be Done? How Women Can Amplify Their Philanthropic Giving and Impact Investing Efforts?

This knowledge gap is a prime opportunity for financial advisors to engage with women clients on a topic that is important to them. It’s one of the many reasons why Sallie Krawcheck launched?Ellevest . “We founded Ellevest, in part, because the existing investing and money industries haven’t worked well for a lot of people,” she said in early 2020. “The industry was built mostly by men, and—perhaps not surprisingly—has done a better job for men. For the rest of us—whether it was because of the swarm of jargon, or lack of diversity (86% of financial advisors ?and?90% of mutual fund managers ?are men), or the high investment account minimums (which are inherently exclusionary)—many people have felt excluded.”

Likewise, this is exactly why we launched?Lebec Consulting . With sustainability, innovation, and systems change at the center of our strategy, we’re a team of women who advise corporations, foundations, high-net-worth individuals, financial institutions, and entrepreneurs on how to?achieve their greatest social impact through catalytic philanthropy and impact investments. THIS MEANS WOMEN. We strive to provide these key stakeholders with the best possible roadmap to achieve impact in ways that will truly reverse the tides of global inequality. And we approach everything we do with an equity lens. With a broad mix of experiences, and trainings related to diversity, equity, and inclusion, we ensure equity is always at the center of our approach and integrated into the solutions we bring to the table to our clients.

In a nutshell: We want to see women have access to wealth, knowledge, technology, and upper-management roles that can allow them to reshape our collective future. And the best way we know how to do that is to provide women with knowledge and the financial resources and tools they need—because they’re certainly not getting enough of them elsewhere.?