While both men and women embrace impact investing as a way to achieve social and financial returns, men are more likely than women to replace charitable giving with impact investments, a report from the Women's Philanthropy Institute at the Indiana University Lilly Family School of Philanthropy finds.
Based on data from the Bank of America/U.S. Trust Study of High Net Worth Philanthropy series conducted by the Lilly Family School of Philanthropy, the report, How Women and Men Approach Impact Investing (24 pages, PDF), found that 18.9 percent of single men and 15.2 percent of married couples in which the husband makes the family's charitable decisions favored impact investments instead of some or all the household's charitable giving, compared with 11.4 percent of single women, 11.6 percent of married couples who decide jointly, and 10.7 percent of couples where the wife is the decision maker.
Funded by the Bill & Melinda Gates Foundation, the study also found that while 82.5 percent of men and 81.3 percent of women said they were aware of the nascent field of impact investing, women were more interested in learning about it (16.2 percent vs. 13.1 percent of men) and more likely to make impact investments in addition to their current charitable giving, as opposed to replacing their giving with impact investments.
According to the report, impact investors tend to be younger, more educated, and have higher incomes, while married women are more likely to participate in impact investing than married men. The report also found a clear link between education and impact investing among high-net-worth women, with 40.5 percent of women with a college degree saying they had made an impact investment, compared with 33.6 percent of men with a college degree, 27 percent of women and 26.8 percent of men with some college, and 17.2 percent of women and 29.2 percent of men with a high school degree or less.
"The rise of impact investing demonstrates a growing enthusiasm for social change, but also raises concerns about the displacement of traditional charitable donations," said Debra J. Mesch, director of the Women's Philanthropy Institute and the Eileen Lamb O'Gara Chair in Women's Philanthropy. "By exploring how men and women approach impact investing, our findings can help nonprofits better navigate this new universe while also providing donors, wealth advisors, and families the opportunity to evaluate where impact investing fits in with their broader wealth and philanthropic strategies."