How Women are Redefining Legacy and Giving Planning

More and more women are choosing to leave a lasting, noteworthy mark on the world through their philanthropy.  

A former executive for a global telecommunications company, Susan is now divorced and in her sixties. She’s been heavily involved in several charities for decades, and has a special fondness for an organization that provides food, clothing and medical assistance to poverty-stricken children in Africa. Sustaining that support in the future is one of Susan’s primary financial goals. “I want to continue to make a difference in other peoples’ lives even after I’m gone,” she says. “And I feel that can best be accomplished by leaving some of my assets to charity.”

How Women are Redefining Legacy and Giving Planning

The rising financial influence of women is creating some major economic shifts.

They’re heading up major corporations in record numbers, forming more new businesses every year, and are having an increasing impact on America’s wealth. With a longer life expectancy than their male counterparts, it also becomes more likely that the household income will be under the control of the female later in life. A 2017 study from Coston Consulting Group reports that by 2020, women are expected to control 33% of all money in the U.S. And the more assets they accumulate, the more their influence will be felt. This diverse and burgeoning group of females are rethinking the meaning of wealth and giving, and in the process, they’re designing legacies that will affect the world that future generations stand to inherit.

Women and men give differently.

Studies by Ledbury Research have shown that, on average, women in the U.S. tend to be more charitable than men, giving away nearly twice as much of their wealth. They also tend to contribute to their chosen causes more frequently. Research from the Indiana University Lilly Family School of Philanthropy suggests that men tend to make charitable gifts when an appeal frames the donation as a way of maintaining prestige, while women tend to give to promote social change or help others who are less fortunate. For men, money may represent power, while women tend to view money in terms of freedom and a way to achieve goals. A 2013 U.S. Trust survey on women and wealth found that women are twice as likely as men to say that giving to charity is the most satisfying aspect of having wealth.

So what’s the best way to give?

With so many options available, it can be hard to choose whom to give money to and how to go about it. Should you give in one lump sum or spread it out? Is it better to donate while you’re alive or after you’ve passed? Should you give something to a number of charities or choose one or two that are nearest and dearest to your heart? Is it more important give to a local organization with a community focus or a global one? There’s no simple answer to the selection process, but your financial advisor can offer valuable guidance as you establish your legacy plans. In addition, it’s critically important to make informed decisions about the charities you’re considering. Charity Watch is one of several reputable independent watchdog organizations that seek to protect donor interests by providing detailed information about how charitable organizations are using their donated funds.

Donor advised funds offer unique philanthropic benefits.

A donor advised fund (DAF) is a simple, flexible and tax-efficient way to conduct philanthropy. Functioning much like a personal foundation, you can donate a wide variety of assets to your donor advised fund. Here are some of the many reasons these philanthropic vehicles are surging in popularity:

  • While you're deciding which charities to support, your donation can potentially grow based on your investment preferences, making even more money available for charitable donation.
  • You can divvy up your charitable distributions however you prefer, whether it’s to one qualifying charity or to a number of them.
  • The year you give funds to your DAF is when you get the tax deduction, not the year you disburse to a charity, so you receive immediate tax advantages.
  • Unlike cumbersome and expensive private foundations, DAFs are easy to administer. You can also choose whatever name you like for your fund.

Donor advised funds are a useful charitable giving vehicle, particularly for women who are in a high-income tax bracket and regularly give to charities.

A legacy plan is actually a process.  

All too often, people think they’re all set once they’ve completed the basic documents. In actuality, it’s not unlike starting a business. Are you done once you’ve formed the company? No, you’re just getting started, and the same holds true for your giving plan. As the framework through which your legacy is going to live on, your plan needs to evolve with you.

Women are more interested in mastering their wealth than ever before. If you’re seeking to create a legacy plan that meets your needs and reflects your vision, our knowledgeable advisors can help. Please contact us to learn more.

About FAI Wealth Management, Inc.: Located in Columbia, Maryland, FAI focuses on helping clients create the financial future they desire by protecting their wealth, making the most of their assets, and planning for life's uncertainties. The firm combines fee-only, fiduciary-driven guidance with highly personalized, consultative financial planning and investment services that enable individuals, families, and businesses to navigate complex life transitions. Founded in 1987, FAI currently manages more than $350 million in client assets nationwide. For more information about FAI Wealth Management, please visit the website at https://www.faiwealth.com or call 410.715.9200.

 

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