Women are leading the way in impact investing, up to 80% yet only 15% are only engaging in socially responsible and impact investing behavior, according to a March study by The Philanthropic Initiative.
The study was co-developed with Mission Investors, a network of 200 foundations engaged in impact investing and Mission Throttle, a social impact strategy firm based in the Midwest U.S.
Why The Gap?
Several factors are said to be responsible.
- Women are more averse to high risk and generally need more information before making investment decisions.
- Women are less confident, by up to 50% compared to men, in their investment knowledge and abilities.
- Fewer women than men are responsible for household investment decisions (50% vs 13%) although there is a noticeable shift among the younger, Millenial demographic (42% vs 37%).
- Few introductory “on-ramp” structures exist today that appeal to women to help gain more experience and confidence in impact investing. Women, the report cites, feel that conventional advisor relationships are ineffective, investment networks are not diverse enough, or women feel “out of place” in investment committees that are dominated by males.
Bottom Line – Why This Matters
It boils down to maximizing opportunities in terms of dollars invested and wealth managed, and the potential collective social good those dollars can achieve, as more women increasingly influence investment direction in the future.
- Women are expected to increasingly influence the projected $400 billion in impact investing decisions by 2021, according to several studies cited in the report.
- Up to 70% of $41 trillion in intergenerational wealth is expected to transfer to women because they outlive men.
- More women among Millenials are consistently expressing greater interest in SRI.
Call to Action – Potential Strategies
A range of actions and strategies are needed to promote psychological safety among women.
- Mentoring – organize one-on-one, small group and peer-to-peer type opportunities for women. Create safe, coaching and mentoring type of environments.
- Increase visibility – leverage networks to inspire high net worth women to learn more, drive emotion to actually engage in impact investing.
- Curate stories – share meaningful stories that women can relate to, share tools that are used, share failures and learning outcomes to help women understand how to safely navigate from being educated to actually practicing impact investing.
Sources: Mission Investors, Mission Throttle
