Charitable giving is no longer a sidebar—an afterthought—in wealth and financial planning. After all, the high-net-worth client profile is changing dramatically. The multi-trillion-dollar intergenerational transfer of wealth is on its way into the hands of Gen Xers who are, in turn, adding their own income to that inherited wealth after years in the workforce. Millennials will also inherit wealth at the same time they’re reaching their professional potential and building that wealth even further.

There’s been another dramatic demographic shift among women. According to Boston Consulting Group, between 2010 and 2015 wealth held by women grew from $34 trillion to $51 trillion, and by 2020 they are expected to hold $72 trillion. They are also the primary breadwinners in nearly 40% of households in the U.S.

What It Means For Advisors

It’s important to understand the things these cohorts have in common—their expectations and perspective—as they accumulate wealth. It’s also important to know what they want from their advisors, and it’s not an “old school” approach to financial services.

Younger generations in particular have grown up in the digital age and are heavily influenced by social media and peer approval. They are also more aware than previous generations of the socioeconomic interconnectivity of the world.

Women face different challenges. A large percentage of the women who will be or are already controlling a significant percentage of the wealth are over 40. They may not rely as much on social media as younger people, but they do share certain attitudes, particularly about philanthropy and their wealth management. They want to be an active part of their own wealth management planning, and they expect their advisors to ask the right questions and provide direction and guidance. They are seeking more than tax advice from their advisors, or the simple establishment of giving vehicles. (Betsy Brill will be speaking at FA's upcoming Invest in Women conference.)

Both demographic groups see their investment portfolios and their charitable giving portfolios as equally important and closely linked, which is why socially responsible and impact investing are so appealing to them. They want to effect change with their charitable funds.

They are also interested in more strategic philanthropy—moving away from checkbook giving. They want their gifts to have meaning, and they want to see things happen now, not later. They are often more actively involved with organizations they give to and more interested in the impact the organizations are achieving.

For women, philanthropic conversations are often tied to family and key events in their lives. They may have seen a recent windfall from an inheritance or divorce settlement, liquidity events that can influence their decisions about philanthropy. Older women might be managing their own money or their family’s for the first time and often don’t know what they have available for charitable giving during their life and as part of their legacy. They look for expert advice from a number of sources: their financial and legal advisors, nonprofit leaders and staff, other women donors, philanthropic advisors and their peers.

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