‘The great wealth transfer’ and women’s giving
Nearly 26 years ago, Anne Arundel County resident Carol Thompson gathered other community-minded residents and formed what we now call the Community Foundation of Anne Arundel County (CFAAC). Thompson’s efforts embodied the giving spirit reflected in other women philanthropists throughout history.
From Madame C.J. Walker, a self-made African American millionaire who created employment and scholarship opportunities for women, to modern-day philanthropists like MacKenzie Scott, women have had a front seat in driving change for good through their actions or finances. March is Women’s History Month, so it’s fitting to explore women’s roles in philanthropy past, present and future.
In the early 1900s, Walker was recorded as the first female self-made millionaire in American history. But more importantly, she was a philanthropist in every sense of the word, advocating for African Americans and women, offering them career and educational opportunities. Upon her death, she bequeathed nearly $100,000 and two-thirds of her estate’s future net profits to charity.
In subsequent years, Eleanor Roosevelt became a beacon of philanthropy with her extraordinary work for social justice. And today, the names of Scott, Melinda Gates and Oprah Winfrey are synonymous with philanthropy. Over the years, these three women have donated a combined $57 billion to charities.
Women have always been highly engaged in many forms of giving back through volunteerism, financial contributions and socially responsible investing. According to a study from the Indiana University-Purdue University Indianapolis (IUPUI) Women’s Philanthropy Institute, as women’s incomes rise, they tend to give to charity more and donate more than their male counterparts.
Women also tend to participate more in giving circles, a form of collective giving, such as Anne Arundel Women Giving Together. This giving circle, a component fund of CFAAC, distributed $164,305 in grants last year to local nonprofits.
Presently, women only control about one-third of all financial assets. But this is expected to increase exponentially through “the great wealth transfer.” It’s a phrase that refers to the gradual shift in demographics and finances of the baby boomer generation (born 1946-1964), to future generations and to women (who typically outlive their male counterparts by an average of five years), according to a report by McKinsey & Co.
At the same time, women are building their own wealth as they own more businesses and move up the career ladder to C-suite positions.
The future looks even brighter. Considering the predicted great transfer of wealth, American women are expected to control much of the estimated $70 trillion in financial assets baby boomers will have by 2030 (estimates vary from $30 trillion to as much as $140 trillion). And their charitable giving is predicted to continue to grow.
Preparing for this transfer of wealth
According to a 2023 survey by Fidelity Investments, “stress” is women’s number one word when it comes to describing their feelings about money. If you’re a woman feeling this stress, preparing can help you alleviate some of it, say professional advisers.
They recommend taking small, but strategic steps to gain a firm grasp of your current and future finances and taking a more proactive role in financial planning. One suggestion is to compile a list of your assets and goals for the future.
Goals can include paying off debt such as credit cards and high-interest loans, traveling more and creating a retirement and estate plan that includes listing what you want to leave for beneficiaries and charities.
They also recommend establishing an emergency fund — saving four to six months of monthly spending as a safety net. Then, educate yourself on how to best manage your wealth to achieve your goals and a secure financial future.
Working with a professional adviser is one step in making a plan for the future. If giving to causes you are passionate about is also something important to you, then working with both your professional adviser and CFAAC to align your philanthropic goals with your financial goals.
If you expect to benefit from this substantial wealth transfer, CFAAC can work with you to help you achieve your charitable goals. You might consider various options like supporting one of the many CFAAC Field of Interest Funds including the Women and Girls Fund, a fund that supports projects that develop individual skills, decrease isolation, create new experiences and empower women and girls who face major obstacles. Contact CFAAC at info@ cfaac.org or 410.280.1102.
The Community Foundation of Anne Arundel County (CFAAC) is celebrating 25 years as a tax-exempt, 501(c)(3), publicly supported philanthropic organization with the long-term goal of building permanent funds that provide support to local nonprofit organizations through grants and special projects. Our mission is to inspire and promote giving in Anne Arundel County by connecting people who care with causes that matter. Established in 1998, CFAAC is one of the largest funders of nonprofit organizations in Anne Arundel County. CFAAC distributes $5 to $7 million annually.