Sisterhood Is Powerful, And Now It’s Also Wealthy

America’s women have long had a prominent role in philanthropy. Well-known figures such as Melinda Gates and Peggy Dulany (of the Rockefeller dynasty) have helped to guide their fortunes towards good causes and persuaded others to give away theirs. However, many of these female billionaires were either born into wealth or acquired it through marriage; the self-made female billionaire is a much rarer breed.

But this is changing. While self-made women make up only 2.7% of all billionaires globally, their number is growing. More women are stepping into high-profile careers, such as Facebook COO Sheryl Sandberg and Hewlett Packard CEO Meg Whitman, and more are accumulating large fortunes on their own, such as American media proprietor and talk show host Oprah Winfrey, or as equal partners with a spouse, such as Laura Dangermond, the co-founder of mapping software firm Esri.

This year’s Forbes self-made women billionaires list counted 56 members, more than in any previous year, 17 of whom hail from the US. And there is evidence of this cohort’s growing heft: the number of self-made women billionaires has doubled since 2009, and wealth held by them has increased by 50% in the past five years, according to Forbes. (1) They hold 16% of the assets owned by all female billionaires.

More women billionaires, more philanthropy?

What does a growing number of self-made women billionaires mean for the future of philanthropy in the US? While there is generosity in both genders, some research finds that there may be more among women. Research by the Women’s Philanthropy Institute (WPI) at Indiana University found that the likelihood of giving in households with an annual income over US$103,000 was higher in female-led households (96%) than in those led by a male (76%). (2) These women also gave more on average: US$1,910 a year, compared with US$984.

The self-made women billionaires on the Forbes list are active in philanthropic circles. Of the 17 in the US, 80% have their own foundation. Independently wealthy women have gained confidence about giving, says Melissa Durda, director of US-based Synergos Institute’s Global Philanthropists Circle, a philanthropists’ network founded by Peggy Dulany. Women such as Oprah Winfrey, Sheryl Sandberg and Sara Blakely, the founder of US shapewear company Spanx, have helped to thrust high-net-worth women’s giving into the spotlight. “It was a roles issue that we saw with some of our families. Where the husband had made the money, the woman didn’t feel like it was hers, so she played a much quieter role in philanthropy,” explains Ms Durda. “Some [women] didn’t feel confident to speak up or name something after themselves.”

Women supporting women

These women have their own style of philanthropy, experts reveal. One is that they prioritise women and girls as beneficiaries of their largesse. According to a WPI survey last year, among those who gave to charity, more than 46% of women donated to at least one cause aimed at women and girls, compared with 37% of men. (3) It is definitely a pattern that Ms Durda sees among the female members of the Synergos Institute. The foundations of the three high-profile women mentioned above all support initiatives aimed at empowering women and girls through education, entrepreneurship and mentoring in the workplace.

One organisation hoping to cultivate this trend is Maverick Collective, a non-profit initiative based in Washington, DC set up to tap into female philanthropists’ giving. Founded last year by Kate Roberts, senior vice president of global health charity Population Services International, and the Crown Princess of Norway, Mette-Marit, its 23 members have each pledged at least US$1m over three years to improve the health of women and girls in developing countries.

The idea was born when the two met at the World Economic Forum and decided to team up. “We realised only about 8% [of participants there] were women. We would go to these panels, which would be very similar year after year, and the discussions didn’t cover the issues really affecting women,” explains Ms Roberts. Just 2 US cents out of each development dollar is spent on teenage girls, according to the World Bank. (4)

A collaborative approach

Experts point to another way in which women are changing philanthropy: the propensity to collaborate. The WPI’s annual survey into giving habits found that more than half of US giving circles are women-only groups. In contrast, charities were most effective at getting men to donate when they connected the cause to men’s individual self-interest, observed the study. “I feel like the women we engage are run less by ego and more by passion,” explains Ms Durda. “As a result, they understand the value of connecting to peers and working with others, rather than trying to do it alone.”

Ms Roberts agrees. “I watch our members lifting each other up. They’re not competing; they’re supporting each other. Friendships are formed. Many of our members have started to collaborate under their own steam. They visit programmes together or lend skills to each other’s projects.”

Measurable philanthropy

Successful businesswomen are also bringing more rigour to the sector and a more critical eye when it comes to judging the impact of their philanthropy. One Maverick member funded and supported a pilot project for a low-cost way to screen for cervical cancer in India. That donor “was obsessed with measurement and obsessed with leverage”, notes Ms Roberts. Good results led the local government to expand the project from three to 28 districts.

Despite wealth and success, gender stereotypes still come into play. Impact investing—which aims both to generate profits and achieve good social outcomes—is gaining traction, particularly among younger donors. Still, the field is closely related to finance, and engaging in more male-dominated areas remains difficult, says Ms Durda. Given their inclination to collaborate, women should work closely with others who are active in the space to grow their presence and defy gender stereotypes.

Such efforts are still at a very early stage. But tapping into this emerging cohort of donors is essential to ensuring that “we don’t leave resources on the table”, according to Ms Roberts. “We’re helping to replicate the Maverick Collective model wherever we can, because there’s a real demand for it,” she adds. “We’re absolutely at a tipping point with women in philanthropy.”

This article is the first of a two-part series on women billionaires and philanthropy, focusing on the US. The article series is part of a larger content programme on philanthropy written by The Economist Intelligence Unit and follows our 2017 BNP Paribas Philanthropy Report.