Now is the time

Now is the time

By Liz Koh, 
Deputy Chair, Nikau Foundation 
4 October 2017

Baby boomers are not only getting older – they are getting wealthier. As they reach retirement age, they bring along with them a tsunami of wealth that needs to be invested, spent, and finally bequeathed to their heirs or charity.

Marketers talk of the ‘grey dollar’ – the money that will be spent by aging affluent baby boomers over the next 20 or 30 years.

All over the world, businesses are looking at ways to tap into this lucrative market. In Japan, there are shopping centres designed for the elderly, with medical clinics, pension-day discounts, and leisure activities for retirees. From cars to retirement villages to food and beverages, a raft of products designed with the elderly in mind is coming to market.

What will baby boomers do with their wealth? The decisions they make about how quickly to use up their retirement capital, and where to invest the capital they retain, could have a significant influence on financial markets.

Of course, not all baby boomers are individually wealthy. Their influence in the market comes simply from the fact that there are so many of them.

One interesting aspect of the baby boomer phenomenon is the influence of gender. Not only do women live longer than men but overseas research shows that women are the key decision-makers in around 85 per cent of all consumer purchases. They also wield the greatest influence when it comes to charitable giving.

As this population bubble reaches the age when they can afford to be generous and when they will have to make decisions about what happens to their estates, women will play a key role.

Numerous studies in the UK and the US show that women are more likely to give – and give more – than men. One internationally recognised centre of excellence for this research is the Women’s Philanthropy Institute which is part of the Lilly Family School of Philanthropy at Indiana University.

Their research has shown that baby boomer and older women gave 89 per cent more to charity than men of the same age and that women in the top 25 per cent income bracket gave 156 per cent more than men in the same bracket.

Charities can expect a huge influx of money as baby boomers unload their wealth either during retirement or on death. The smart ones will be actively cultivating relationships with baby boomers to tap into their generosity, and women, particularly women in high income brackets, should be right in their sights.

To that end, the Auckland Foundation, a member of Community Foundations of New Zealand, is launching an Auckland Women’s Fund, which aims to support women’s giving and improve the lives of girls and women through its granting.

No doubt others will follow. After all, baby boomers have only three choices with their wealth – they can spend it themselves, leave it to their family, or give it to charity or community. They certainly can’t take it with them.

 

* Liz Koh is Deputy Chair of Nikau Foundation, an authorised financial adviser and author of Your Money Personality; Unlock the Secret to a Rich and Happy Life, Awa Press. 

Our generous women

Our generous women

dellwynDellwyn Stuart
CEO, Auckland Foundation

5 July 2017

Women are becoming more and more influential in philanthropy, as earning power and financial independence grows. They control more of the financial pie than ever before and this is set to rise with a huge wealth transfer on the horizon and women set to be significant winners.

Research tells us that women tend to view money in terms of personal security, freedom and a way to achieve goals – so does it translate that women’s giving is different?

While there is no New Zealand specific research, some studies in the US have looked at philanthropy from this perspective.   The findings say that women tend to be more altruistic and empathetic, partly because of the way they are socialised regarding caring, self-sacrifice and the well-being of others. The research also suggests that women tend to give to promote social change or help others who are less fortunate.   In addition, they found that women are nearly twice as likely as men to say that giving to charity is the most satisfying aspect of having wealth.

There is another characteristic of women’s philanthropy that has emerged globally and that is collective giving.  The collective giving model pools individual dollars to make significantly larger grants, allowing people of all levels of wealth to participate in big gifts.   It appeals to women because it is a flexible, grass roots model that taps into several emotional drivers of women: creating relationships and community as well as working together for common causes.

Around the world Community Foundations have fostered the growth of Women’s Funds – large collectives that use their pooled funds to make significant grants.  Many focus their grant making on women and girls in their community, applying a gender lens to create greater equity.  This acknowledges that women face different kinds of economic and social challenges, which require different solutions.

In New Zealand, Community Foundations are exploring launching a similar focus on women’s giving.  We’d like to bring like-minded generous women together to learn, collaborate, and make a difference in our communities – while also having some fun!

 

Auckland Foundation are inviting interested people to attend a breakfast on July 14th to hear about what makes women’s giving different and the vision for this new network and fund. To become involved and for further details email melody@aucklandfoundation.org.nz