It is estimated that over the next 10 years, approximately $30 trillion will transfer to surviving spouses, children, and charities. With this transfer of wealth, and because statistically women generally live longer than men, research by McKinsey estimates that by 2030 women will control 70% percent of wealth in the United States, through both earnings and inheritance.
As this major wealth transfer is already in process, now may be the time for philanthropically inclined women to identify their charitable goals and to take action. At this point, the drastic shifts of those coming into and managing wealth, which industry experts refer to as the “Great Wealth Transfer,” will be rapidly ascending toward its peak.
A Woman’s World
This reality brings some urgency to addressing the unique challenges women face when it comes to investing and managing wealth.
Powerful women are moving out from behind their husbands and making an impact in philanthropy with their own unique approaches. For instance, both Melinda Gates and MacKenzie Scott have been instrumental in reshaping traditional philanthropy as it relates to achieving their philanthropic goals.
Philanthropy is transitioning from a prescriptive model, where the goal is to make the donor feel good about a donation, to a catalytic model which seeks to deploy capital to solve problems. Women are leading the charge for this transition and recognizing that philanthropy is power. This power often translates into educating other women globally.
Women realize that their legacy is important and are looking for practical ways to instill their philanthropic values in the next generation. Many now feel that waiting until the will is read to impart values is too late. Naming an adult child or grandchild as the joint or successor advisor to a donor-advised fund has been a useful tool for many women seeking to instill their values in the next generation by allowing them to be part of the conversation now. In the case of a private foundation or charitable trust, members of the next generation can be named to the board or named as a co-trustee of a charitable instrument in the present day.
Taking the First Step
Kelly Wathen, director of PNC Private Bank & Hawthorne in Palm Beach suggests that the most important step in determining a philanthropic focus might be to ask yourself “Why?”
Why are you drawn to philanthropy?
Why is it an important piece of the economic puzzle from your experience?
Why do you want to be part of it?
The causes that are most important to you may become clear by asking yourself those questions. From there, you can determine a strategy to support them.
As wealth continues to shift to women over the next decade, women’s influence over philanthropy will continue to grow. Actions speak louder than words, and the steps women take today to deploy capital to solve the problems they care about most can have global economic implications in the future. Let’s get started.
For more information, please consult your PNC Advisor or contact PNC Private Bank.
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