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Women, Money, and Impact in 2021

Women’s access to capital has increased over the last few decades thanks to better pay, increased participation in the labor workforce, and greater access to family inheritance that was once divvied out unequally amongst the sexes. “It’s the first time in history that women in the U.S. control more assets, or are allocating more assets than men,” Kiersten Barnet, deputy chief of staff and manager of the Bloomberg Gender-Equality Index, told Forbes.

This shift is starting to shed light on the differences between men’s and women’s investing and wealth preferences. According to a New York Times article, Money is Power and Women Need More of Both, women have long been steered away from the unapologetic drive for wealth. Even when women do make substantial money, they have often chosen to exercise the influence it brings differently than men. For example, while women often choose to use their wealth to help others, men tend to use their wealth to enhance their own personal profile and, in a sense, grow their own brand.

While men have historically used their money to grow their influence, today, women may be ready to use their wealth in a traditionally female and yet non-traditionally profound way: to generate financial returns AND have a social and environmental impact, or impact investing.  As the Global Impact Investors Network (GIIN) likes to ask, what world are you investing in?

What Do You Want Your Money to Do For You?

If you’re ready to join the millions of women who are making their money work for them — and for causes they care about, you have options.

impact

As you develop your investment strategy, consider the many available investment options, as depicted in this chart from socialfinance.org. Over the past couple of years, these options have significantly expanded to include sustainable, impact, and responsible investing strategies. When considering ways in which you can make an impact, I encourage you to think holistically — and to think beyond philanthropy as a lever to drive social change but consider all your investment capital as a lever.

Today, thanks to several different impact investing strategies, this is possible; here’s how to get started:

1. Decide what matters to you. The most important thing is to invest your money in issues and causes that align with your values. Whether it’s climate change, gender equity, education, or perhaps something else.  Define what values you would like to incorporate into your investment strategy.  Not sure what matters to you?  The U.N. Sustainable development goals are the blueprint for achieving a better and more sustainable future for all. They address the largest global challenges we all face that must be solved so that we can all prosper in the future.

Sustainable Development Goals


2. Inventory your assets
. Do you know what kind of investments you have? How about what you own in your 401k? If you own stocks, and you care about diversity, do you know if there is a diverse board of directors at the companies you’re invested in?  If you own mutual funds and care about gender equity, are the funds managed by men or women? Remember, you are only as diversified as your portfolio manager.  Some other tools you can leverage to get a better view of what you own include Morningstar’s Sustainability Ratings and As You Sow.

  • Morningstar’s Sustainability Ratings allow investors to understand how the companies in their portfolios manage their environmental, social, and governance – or ESG – risks relative to their peers.
  • As You Sow has six Invest Your Values online tools that show you exactly what companies are embedded in your funds and which funds are aligned with your values.

3. Consider your strategic options.  The sustainable and impact investing landscape has grown dramatically over the past couple of years, and there is a wide range of products available if you would like to put your capital to work.  The US SIF Foundation’s 2020 Report on U.S. Sustainable and Impact Investing Trends, recently released is a great educational resource if you want to learn more about some of the current trends in this space.  USSIF also has a “Getting Started Guide in Impact and Sustainable Investing” for individual retail investors.

But Won’t I Be Giving Up Returns If I Invest This Way?

Just like traditional investors, impact investors have different goals. Some invest for below-market-rate returns to meet specific strategic objectives, while others pursue competitive and market-rate returns. In GIIN’s 2020 Annual Impact Investor Survey  of 300 impact investors, the majority reported they seek competitive or market-rate returns. And according to the report, “An overwhelming majority of respondents reported meeting or exceeding both their impact expectations and their financial expectations.”

Annual Impact Investor Survey

 

How You Can Learn More and Get Involved in Impact Investing Initiatives

As interest in impact investing grows, so do the opportunities to learn from and meet like-minded investors. You can join education circles like Invest for Better or get involved with initiatives to drive change by participating in The Women & Money Initiative or GenderSmart, for instance.

  • Invest for Better is an organization bringing together women who are interested in impact investing. You’ll join a “circle” of 6-13 women who will meet regularly for six months to one year. You’ll be taken through a curriculum with your circle group and learn how to confidently move your money into action.
  • The Women & Money Initiative is a “platform for action to mobilize more women and feminist men to invest and fund gender lens initiatives.”  They share articles, videos, and resources, host events, and support important initiatives on gender equity.
  • GenderSmart is a global initiative dedicated to unlocking gender-smart capital at scale. You can learn more about their many programs, including Capital Connect, Commitment Tracker, and many more on their website.

 

Ready to Make an Impact?

Impact and sustainable investing are not just do-good investing; they’re smart investing. I believe that women can use their wealth and influence to dramatically change the country’s course and the world for the better — and in effect, collaborate as partners with other social change agents to overcome some of the most significant challenges facing the planet today.  You can’t do everything, but you can do something.  Are you ready to use your investment power?

This blog was originally published on kahilla.com on December 6, 2020.  Founded in 2019, Kahilla strives to create gender parity across the corporate world.  This bold vision combines our desire for a supportive community of ambitious women with empirical evidence documenting a lack of women in top leadership positions and the financial risk facing companies without equal representation.

Kathleen McQuiggan
Kathleen McQuiggan
Kathleen McQuiggan is a Wealth Advisor at Artemis Financial Advisors where she works with clients to create sustainable financial plans and investment portfolios.

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