EconExtra: Honoring Women Philanthropists
To honor Women’s History Month and International Women’s Day earlier this month, let’s take a look at philanthropic women. As this is history month, we will look at the rise of female philanthropists as well as recent headlines. As this is an Economics post, we will pose an Economics question for classroom discussion.
The history of female philanthropists started in the 1600s. Have you heard of Radcliffe (Harvard) College? It was named for Ann Radcliffe, who donated money for the first scholarship fund at Harvard College, founded in 1636. This article from Geneva Global discusses how women changed the philanthropy game. Their impact grew as their financial independence grew in the 19th and 20th centuries.
Here is another interesting example from history: the Russell Sage Foundation.
One of the oldest American foundations, the Russell Sage Foundation was established by Mrs. Margaret Olivia Sage in 1907 for "the improvement of social and living conditions in the United States."
Russell Sage was a wealthy financier and man with political aims as part of the Whig party. There is no evidence during his lifetime that he cared much about those less fortunate. At one point, he was even brought up on charges of usury. His wealth was bequeathed to his second wife, Olivia, without restrictions. It is rather ironic that her mission for this foundation was apparently in opposition to her late husband’s inclinations.
Women who may not have had control of large amounts of wealth instead founded organizations that amassed like-minded women to volunteer their time and energy to helping others in some targeted way. On a personal note, we often called my mother a “professional volunteer.” From PTA to Board of Education to local youth employment programs and faith-based service organizations, the dining room table was often covered with her “work,” and her calendar filled with meetings and volunteer activity. In my semi-retirement, I am following in her footsteps, ramping up my volunteer commitments.
What I found most interesting in the Geneva Global article was their summary of research into differences between how men and women approach philanthropy.
THE RESEARCH DEMONSTRATES THAT WOMEN:
- Prefer to learn from one another about issues and where to give
- Are more rigorous in their evaluation of programs and their potential impact
- Volunteer more—and often at places where they are also donors
- Spread their giving across multiple causes or organizations that are important to them. There is also a general sense among experts that women prefer to give to organizations and issues that specifically address women and girls, such as girls’ education, reproductive health, and women’s cancers
For more perspective on the influence of women philanthropists, try this blog post in honor of Women’s History Month from Maggie Germano. Some of the names on this list may be familiar, but some may not be.
The new name in philanthropy is MacKenzie Scott (Bezos’ ex-wife). Scott won the headline race last year with as she made history by donating $5.7 billion (with a “B”) in just one year! MacKenzie received a 4% stake in Amazon in her divorce settlement (valued in December at $37 billion), making her the third richest woman in the world. She signed the Giving Pledge with her new husband, a teacher, pledging to give away most of her/their wealth. Note: while her ex gave away $10 billion in 2020 (see below), he has not signed the Giving Pledge. In July, MacKenzie explained her motivation for giving to 116 organizations (listed in an older Medium article) during the first half of the 2020. Then she stepped up her giving in the second half of 2020, handing out $4 billion in just four months! In sum, direct gifts were given to 384 institutions.
Among the institutions receiving sizable gifts from Scott were HBCUs and a tribal college in North Dakota. To understand how impactful these seven-figure donations are to these institutions, you might take a few minutes to read this Chronicle of Higher Education article.
Melissa Berman, CEO of Rockefeller Philanthropy Advisors, told Bloomberg that Scott's nearly $6 billion in donations this year "has to be one of the biggest annual distributions by a living individual" to working charities. (NPR)
Giving in 2020
What impact did the pandemic have on giving in 2020? The pandemic even hit overall giving for 2020, but more than $20 billion went directly to combat the impact of Covid-19 through donations to organizations that help individuals suffering t to vaccine efforts and medical research. (Candid.org) Some of the Pandemic giving got some press. Here are a just a couple of those headlines, particularly those featuring women.
- Dolly Parton donates money to help develop a vaccine (NPR)
- Oprah pledges $10 million to help suffering Americans (gobankingrates)
- Madonna partners with Gates to help in efforts to find Covid-19 therapeutics. (Rolling Stone)
- The Dells and Bezos give $100 million each to Covid efforts. (com)
Here is a list of the top ten donors overall for 2020 from The Conversation. Notice that while #1, #3, and #10 are men, #2 is MacKenzie Scott, who at $5.7 billion gave three times as much as #3, Michael Bloomberg. Another distinction is that her ex-husband’s $10 billion was used to start a foundation to combat climate change, which will be doled out over time. MacKenzie’s donations were made directly to the institutions and intended to have an immediate impact.
The Classroom Conversation
How do you measure/compare the economic impact of any particular dollar donation? Can you really measure and compare the value of saving a life to educating a person to providing a expanding access to the arts to improving the environment?
For example, how would you compare the impact of a $10 million gifts for these efforts?
- For a new wing of a hospital
- To an art museum
- To feed the hungry
- To start a college scholarship?
Do you see any parallels between research findings on the differences in how women donate money rand the behavioral finance findings about how women invest their money?
Would you expect the “top 10” list of donors to evolve over time in terms of gender composition as women continue to make strides in the workplace and more attain similar amounts of wealth to their male counterparts in the entrepreneurial and executive ranks?
EconExtra is a series of posts that go beyond the textbook, relating current events and recent developments in economics to content standards, and providing resource suggestions to help you incorporate the current events into your lessons.
About the Author
Beth Tallman entered the working world armed with an MBA in finance and thoroughly enjoyed her first career working in manufacturing and telecommunications, including a stint overseas. She took advantage of an involuntary separation to try teaching high school math, something she had always dreamed of doing. When fate stepped in once again, Beth jumped on the opportunity to combine her passion for numbers, money, and education to develop curriculum and teach personal finance at Oberlin College. Beth now spends her time writing on personal finance and financial education, conducts student workshops, and develops finance curricula and educational content. She is also the Treasurer of Ohio Jump$tart Coalition for Personal Financial Literacy.
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