Applying The Rule Of Seven To Gift Planning

Applying The Rule Of Seven To Gift Planning

Article posted in Demographics on 5 September 2001| comments
audience: National Publication | last updated: 18 May 2011
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Summary

Most people know that women outlive men by an average of seven years, but did you know that women also make more planned gifts? In this edition of Gift Planner's Digest, Cheryl Altinkemer of Purdue University and the Women's Philanthropy Institute discusses this phenomenon and how planners can tune their communications skills to match the unique values and giving styles of women donors.

by Cheryl Altinkemer

Cheryl L. Altinkemer is the director of development and alumni relations for the school of Consumer and Family Sciences at Purdue University. She is a board member and president-elect of the Women's Philanthropy Institute. She was co-founder of the National Advancement for Family and Consumer Sciences group devoted to helping deans and professionals raise funds for colleges of family and consumer sciences and human ecology. Altinkemer has presented at the National Conference on Planned Giving, CASE 5 in Chicago, and several regional NSFRE Chapters. She served as vice president of membership for the Indiana Chapter of NSFRE and was past chair of its region in Lafayette, IN. In 1993, Altinkemer established the Felker Leadership Conference at Purdue University to annually educate women about philanthropy and leadership issues. This group has given or pledged millions of dollars since the first conference. Ms. Altinkemer can be reached at 765-494-7890 or altinkemerc@cfs.purdue.edu


What is the rule of seven? It was developed by S. Shaw and M. Taylor in the mid 1980s to describe the following phenomenon:

  • Seven trillion dollars would transfer to the next generation with seven years.
  • Women outlive men by seven years.

Only one of the seven is still true: Women still outlive men by seven years.

  • Seven trillion is now a minimum 41 trillion.1
  • The transfer will happen over the next 52 years.

Transfer Of Wealth

According to Paul Schervish and John Havens in their Boston College report, the estimates are based on different rates of economic growth.

Amount Growth Charitable Bequests
$41 trillion 2% $6 trillion
$73 trillion 3% $12 trillion
$136 trillion 4% $25 trillion


The implication of this information is that if women outlive men, and we are not properly cultivating, asking and stewarding their gifts, especially in the case of couples, we are ignoring a very important constituency. There are further differences and facts that influence this notion.

The following summarizes bequests that are being transferred today, according to the IRS Statistics of Income Bulletin, summer 1999, (based on Bequests for Women & Men, 1995 IRS estate tax data).

Women Charitable Bequests Percentage
Educational, medical, and scientific institution. $1.6 billion 32%
"Other" institutions. $1.4 billion 27%
Private foundations. $1.7 billion 23%
Men
Private foundations. $2 billion 38%
Educational, medical, and scientific institutions. $1.6 billion 31%
"Other" institutions. $1.1 billion 22%


Planned Giving Differences

According to a report published in Planned Giving Today, December 2000, Cindy Sterling compared alumnae of women's colleges with the alumni of co-ed colleges that formerly had been all male. The schools were small, liberal arts colleges in the northeast who were participating in capital campaigns.

  • Of all giving for capital campaigns, 32% of gifts given by women were in the form of a planned gift.
  • Of all giving for capital campaigns, 24% of gifts given by men were in the form of a planned gift.

In those campaigns, the types of planned gifts given were:

Type of Gift Women Men
Life Income Gifts 10.4% 17%
Matured Bequests 21.8% 7%


If the emphasis is to encourage irrevocable gifts as opposed to revocable gifts, we may need to rethink our strategies, and the implication and comfort of will bequest and beneficiary gifts for female donors. There is a huge educational opportunity for teaching women the benefits of irrevocable gifts.

Impact of Women's Giving

Although the numbers have changed, the impact is still that an enormous amount of money will pass from the parents of baby boomers to their children and charity for years to come. In many cases, it will pass to women. Have you reviewed how you educate women about planned giving, and how couples make decisions together and separately about giving? Do life stages and giving styles also affect giving?

Barriers to working with women and couples.

Us! As donor advisors, we are not always sensitive to many issues concerning donor's motivations: gender, age, culture, and style differences.

Them! As a couple, the dynamics of these issues double in complexity and continue with family/life circumstance issues.

Men. We try to avoid generalities when developing individual strategies for major and planned gifts, but there are some styles that are unique to men.

Women. Again, we're speaking in generalities, but women are often the silent public voice, and may also not feel comfortable with giving away family income if they were not the breadwinner or inherited wealth.

How do we change and adapt? We learn about each group's styles and differences.

Gender Communication

According to author Deborah Tannen and other gender communicators, men and women tend to use the following styles to communicate:

Men use report language. Men tend to want the technical aspects of how an endowment will grow, investment policies, etc. first, while women want to talk about the program first, then how to make the gift.

Women use rapport language. Women must have a relationship with the organization in order to give a major or planned gift. They also want involvement long after the gift is complete.

Men will sit through the Olympics for almost anything, as long as they get to see some winners and losers. Women want to know who the athletes are, what sacrifices they made.

Dick Ebersol, president, NBC Sports

Basic Principles Of Women's Giving

There has been much already published about how to obtain gifts from the breadwinner, or male of the household, but literature has not been as generous with how to appeal to women. Again, as our focus is on planned gifts and women living an average of seven years longer than men, understanding women's motives becomes increasingly important. What we know is that although some men may exhibit similar behaviors, as a rule:

  • Women will give generously to all causes and purposes.
  • Women's age and source of wealth are determining factors in giving.
  • Women's giving is leading the trends in philanthropy today.

Women's giving depends on the following:

Wealth accumulation. Was the woman's wealth self generated, inherited, or was she in a one-income household? These issues determine a woman's confidence level in giving away assets and income.

Education. The higher the educational level again affects confidence and willingness to give through bequests.

Charitable giving attitude. The giving style and the values a woman wants to pass on to her children all determine amounts and willingness to give to charitable causes. If a woman's value is to teach philanthropy while also leaving an estate to her children, the challenge becomes how to educate her on the proper way to pass on social capital.

Women determine:

  • eighty percent of consumer decisions, family lifestyle, and home spending decisions.
  • eighty percent of healthcare decisions.
  • ninety percent of total family finances at some point in their lives.

Helping Women Give

Based on research by Shaw and Taylor, women are motivated to give by the "six Cs:"

  • create
  • change
  • connect
  • collaborate
  • commit/volunteer, and
  • celebrate

Women need accountability and good stewardship to know that their dollars are doing what they intend. They take longer to make decisions, and will want to stay active with the group long after the gift is donated. Men tend to make decisions quicker and then let the organization do its work.

By using the knowledge of the six Cs, you can help donors create a personal philanthropic vision. Begin with an individual exercise of personal reflection. Ask the donor reflective questions:

  • What people, experiences, and institutions have had the most impact in your life and in what ways?

  • Ask the donor to imagine a better world. What are the major issues facing society today? Which are the most important to solve?

  • Ask the donor how she can make a better world happen. How will you direct your gifts to solve the problems that have been identified? What outcomes do you hope for, and in what time frame? How do you want to be involved?

  • Discuss the donor's philanthropic legacy. How do you want to be remembered? What impact do you want to make with your philanthropy? What do you hope will be your philanthropic legacy?

  • Have the donor write a mission statement for the nonprofit that she wants to support and then have her write its mission statement as she understands it. It should reference the donor's passionate interests and issues. List what the group has accomplished to help improve/change the issues that the donor cares about.

  • Have the donor write what she personally is doing or will do to support this effort. Ask if she knows whether or not the organization can solve the issues that she is passionate about. Ask, if you could give the charity $1 million to help support its efforts, how would you want the organization to help solve the problem?2

Generational Differences

Once you understand gender, then understanding different generations will help you learn how age affects motivations for giving. The environment that you grew up in, especially when you were 10 years of age, strongly impacts your value of money.3

Traditionalists

Traditionalists were age 10 from 1920-1930. They were affected by:

  • WWI.
  • The Great Depression.
  • Liked cash, not credit.
  • Security savers: They're passing the $41 trillion.

Traditionalists tend to be:

  • Conservative.
  • "Do it for the...country/company/community.
  • Follow rules and regulations.
  • Formal.
  • Materialistic.
  • Spectators.

Traditional Women:

  • Have had a traditional marriage and are stay-at-home moms.
  • Will give out of loyalty (unrestricted).
  • Not comfortable with recognition.
  • Men will most likely be involved with decisions: spouse/brother/son.

Builders

Builders were age of 10 from 1940-1950. They were affected by:

  • WWII and Korean War.
  • Were "winners" and "losers."
  • Beginning of family breakdown: Rosie the Riveter/mobility.
  • Rock 'N Roll.
  • BT (Before TV: Prior to 1948, there were 100,000 televisions) and AT (After TV: By 1952, there were 250 million televisions).

Builders were influenced by:

  • Dr. Spock.
  • Consumerism.
  • Overindulged their children; they wanted life to be better for them.
  • Read self-help books.
  • Would compromise/mediate.

Women Builders:

  • Invented herself.
  • Sometimes gives out of loyalty (prefers to restrict).
  • Wary of money and power.
  • Some public recognition if it mentors others.
  • More comfortable with decisions.

Baby Boomers

Baby Boomers were age 10 from 1956-1970. They were affected by:

  • Vietnam.
  • Protests.
  • Assassinations.
  • Civil rights.
  • Watergate.
  • Walk on the moon.
  • Beatles.

Baby Boomers:

  • Want instant gratification; it has to be FUN!
  • Individualists.
  • Wants to participate in decisions.
  • Always asks why?
  • Are participators.
  • Wants change; wants the experience.
  • Are informal.

Boomer Women:

  • Are community oriented; they want to start organizations from the grass roots.
  • Want change to make the world a better place.
  • Want financial planning.
  • Have their own wealth.
  • Don't give for loyalty or status quo.
  • Will leverage gifts.
  • Will give in their own name.

Busters: Gen Xers

Busters: Gen Xers were age 10 from 1970-1980. They were affected by:

  • Gulf War and long periods of peace.
  • Bored with space walks.
  • Jet travel is the norm.
  • Comfortable with computers and high tech.
  • Internet.
  • Media heroes.
  • Grunge.

Busters: Gen Xers were influenced by:

  • Divorce; latchkey kids.
  • Credit cards.
  • Purchasing on the Internet.
  • Everything changes in three to five years.
  • Are more conservative than their parents; they are more like their grandparents.
  • Worried about the future; they fear the good life has peaked.

Busters: Gen Xers are more gender neutral:

  • Make independent decisions; they had to as latchkey kids.
  • Connected to community.
  • Confident and ambitious.
  • Like success American style; they are materialistic.
  • Grass-root activists.
  • Don't believe in government or institutions.
  • Believe they can do anything.

Giving Styles

A book entitled, The Seven Faces of Philanthropy, by Prince and File helps us to understand how giving styles affect how individuals give. This was an in-depth study of 218 people who maintain $1 million or more in a discretionary investment advisory account. They contributed $50,000 or more to a single nonprofit within the past two years, and more than 800 wealthy people participated in other ways to the study. Based on this information, they developed seven styles. Although a heavy majority of the donors they interviewed were male, the categories still are valid, especially with the traditionalist's age group.

Communitarian

  • Twenty-one percent of donors.
  • Made up the largest group of the study.
  • "Makes sense to give."
  • "Helps my own community prosper if we support local charities."
  • Typically business owners, 75%.
  • Believe nonprofits are more effective than government, 93%.
  • Craves recognition.
  • Devout.
  • "It's God's will for us to help others." These donors are almost always members of a local church.
  • Channel nearly all of their giving to religious institutions, 96.4%.
  • Give to causes that match their moral and religious views.

Investor

  • Fifteen percent of donors.
  • Business Owners, 74%.
  • Gives with one eye on the nonprofit cause, the other on personal tax/estate consequences.
  • Closely evaluates nonprofits.

Socialite

  • Eleven percent of donors.
  • Wealth comes from privately owned business, 75%.
  • "Make the world a better place and have a good time doing it."
  • Creative fundraisers.
  • Less interested in operations.
  • Tends to support arts/education/religion.

Repayer

  • Ten percent of donors.
  • Business owners, 76%.
  • First constituents, then donors.
  • Personally benefited.
  • Medical and educational institutions.
  • Do not need recognition.

Altruist

  • Nine percent of donors.
  • Business owners, 70%.
  • Selfless donor; prefers to be anonymous.
  • Moral imperative helps them grow/evolve.
  • No input from advisors.
  • More focused on social concerns.

Dynast

  • Eight percent of donors.
  • Typically inherit wealth.
  • Family tradition to give.
  • Younger dynasts seek out different causes.
  • Have been some of the most significant donors, but smallest group.

Putting The Puzzle Together

Now that we know what motivates men and women to give, and how age may influence values, you must determine the best giving vehicle to meet a donor's individual style. You can then develop a strategy that best meets the household interests, if appropriate, then move onto individual strategies.

  • Visit a couple together first, and then determine if the strategy should be individualized.

  • Steward to meet both household and individual interests.

  • Involve donors by their household interests first.

Remember the rule of seven: If you have included the woman's interest in a couple, the magic "seven-year rule" may disappear and you will have many satisfied clients.


Endnotes

References

The Women's Philanthropy Institute became part of the Center on Philanthropy at Indiana University in 2004. Go to http://www.philanthropy.iupui.edu/PhilanthropicServices/WPI/ for further information.

Boom Times a Bust For Retirement Assurances: Results of the 1998 Retirement Confidence Survey, Employee Benefit Research Institute, Washington DC.

"Will Boomers Give Generously?," Braus, Patricia, American Demographics, July 1994, pp. 48-57.

Donor Study, Craver, Mathews, Smith and Company, 1999.

"The Heart of a Donor: A Lifestage Analysis," Direct Marketing Associates Nonprofit Council, New York, NY, 1996.

Millward Brown Brand Equity Study, 1999.

Global Demographics: Fund Raising for a New World, Nichols, Judith E., Precept Press, Chicago, IL, 1995.

"Philanthropic Styles," Prince, Russ; File, Karen and Gillespie, James, Nonprofit Management and Leadership, Vol. 3, No.3, spring 1993.

"The Heart of the Donor: A Lifestage Analysis," Russ Reid Co., Direct Marketing Associates, New York, NY, January 1996.

"How We Talk: Men vs. Women," Rutter, E. Jane, Advancing Philanthropy, spring 1996.

Reinventing Fundraising, Shaw, S. and Taylor, M., Jossey-Bass Publishers, San Francisco, CA, 1995.

"Beyond Rocking the Ages, an Interview with J. Walker Smith," Stoneman, Bill, American Demographics, May 1998.

"Survey Finds Women Suffer 'Financial Paralysis,'" Sonshine Pasher, Victoria, National Underwriter, July 8, 1996.

You Just Don't Understand, Tannen, Deborah, William and Morrow & Co., New York, 1990.


  1. "Millionaires and the Millennium; New Estimates of the Forthcoming Wealth Transfer and the Prospects for a Golden Age of Philanthropy," Schervish, Paul and Havens, John, Boston College Social Welfare Research Institute, 1999.back

  2. Exercises and information from "Million Dollar Exercise," Taylor, Martha A., and Inspired Philanthropy: Creating a Giving Plan A Workbook, Gary, Tracy and Kohner, Melissa.back

  3. "You Are Is...What You Were When," Massey, Morris E., Ph.D., Magnetic Video Library, Farmington Hills, MI, 1981, and Rocking the Ages, the Yankelovich Report on Generational Marketing, Smith, J. Walker and Clurman, Ann, Harper Business, 1997.back

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