September 2007


GivePhilanthropy is usually the least thought out, most disorganized part of our financial activities. We know charitable contributions save us taxes.

But the question we rarely ask is: How can I maximize not only my tax benefits but the power that philanthropy gives me?

The more thought and planning you give to your charitable donations, the more—so to speak—bang you get from your buck—financially, socially, emotionally.

To this end, I put together Six Principles of Powerful Philanthropy:

1. Educate yourself financially. The number one reason women don’t give more is lack of knowledge. No matter how much money a woman has, if she’s afraid, insecure, and/or ignorant around money, she’ll be restrained in her giving . In a recent study, 73% of women felt that passing money to children and causes is important, but only 14% have conducted detailed financial planning to ensure an effective wealth transfer.

2. Get your financial house in order, with your spouse. Review your finances regularly. Smart money management follows 4 rules:

  • Spend less
  • Save more
  • Invest wisely
  • Give generously

These rules must be followed in this order. Giving without following the first three rules is an act of self sabotage. Not only do you jeopardize your future security, but you diminish the impact you can make with your money.

3. See yourself as a philanthropist in your own right. Too many women think it’s their husband’s money, so charitable donations are his responsibility. But women outlive their spouse and will ultimately be in charge of the family estate. Another reason women don’t engage in planned giving is because, if they’re not a Carnegie or Rockefeller, they don’t think they have enough. Not so. Small amounts can add up to big changes.

4. Give serious thought to the legacy you want to leave. I once saw a poster with the word: “will it matter that I was?” Ask yourself: How do I want people to remember me? What changes would I like to see in the world. What do I value most? Does my giving reflect my values?

5. Work with professionals. Figuring out how much is possible and advantageous to give is a complex issue. It should be a team effort. Find reputable estate planners, attorneys, financial advisors, accountants. Studies show, however, 9 out of 10 people don’t mention charities in their will. So if a professional doesn’t bring it up, you be sure to.

6. Make it a family affair. Use philanthropy as a way to teach kinds about values, money management, and life goals.

The most powerful philanthropists are not the ones with the highest net worth. They are the ones who are financially educated, financially secure, and passionate about a cause.

I once kept a quote on my wall: “We pray to God when our foundation is being shaken, only to find out it’s God who is doing the shaking.”

I often recall those words when I coach women.

CalculatorJust yesterday, I talked to a client who was almost in tears. Her husband’s business unexpectedly went belly up. Suddenly, they had no income. She was forced to get a higher paying job.

“Do you think this crisis has anything to do with my decision to make more money and my lack of action?” she asked.

Obviously it was a rhetorical question.

I see this pattern all the time. Women do not get serious about money—making it or managing it—until a crisis hits. Either their world falls apart, or feels like it’s about to. That’s when they finally take action.

I did it myself. I waited until a million dollar tax bill almost wiped me out. Not smart!!

How about you? Are you avoiding financial stuff until the pain gets worse than the fear? Are you looking for a way to get going without having your very foundation violently (or even mildly) shaken.

If so, try this experiment. Focus on what inspires you and stop dwelling on what scares you. Forget all the things that can go wrong. Instead consider all you can do when you have more money. Not just buying more shoes, but making a difference. Think about the joys of philanthropy, leaving a legacy, contributing to causes you feel passionate about, helping your kids, your parents, people you love.

That’s what I finally did. I started thinking about what kind of a role model I wanted to be for my daughters instead of obsessing about screwing up. When I made that shift, I had no choice…I could no longer let fear stop me!

I’d love to hear other ideas for getting unstuck. What worked for you?

WeddingI’m really excited about a groundbreaking project—The Allstate Foundations Domestic Violence Program. They’ve hired me as their spokesperson.

For the first time, a large corporation is addressing an issue on a national level that no one’s talking about—Financial Abuse.

We tend to think of domestic violence as physical, emotional, and verbal. Yet financial abuse is just as insidious and dangerous….perhaps even more so because we don’t recognize it.

For years, I was the victim of financial abuse. And I had no idea. The signs were there. I just didn’t see them.

For example: My husband controlled the amount of money I had access to. He refused to discuss our finances with me, and withheld important information and documents. He got us into illegal deals, “forgot” to pay taxes that were in my name, racked up a huge debt, then left the country, so I was left holding the bag! I was so embarrassed and ashamed of my ignorance, I told no one what was going on.

According to a recent poll by The Allstate Foundation, the number one reason victims stay with their abusers is financial instability. So The Allstate Foundation is doing something about this horrific problem. Aside from raising public awareness and thought leadership, they’ve created 2 amazing programs:

  • A financial education curriculum designed especially for advocates and survivors of domestic abuse.
  • An Education and Job Training Fund that provides women with immediate grants for finding work or improving their skills.

You can find out more on www.econempowerment.org. If you are in immediate danger, call the National Domestic Violence Hotline: 800-799-SAFE (7233) .

Please spread the word. According to a 2006 Allstate Foundation national poll, over 74% of us know someone who is the victim of domestic violence. Now you can help.

Here’s some good advice for all single women. When you start dating someone, find out first thing if you are financially compatible. True, conversations about money can be awkward, especially in the beginning of a relationship. But, according to an article from the Detroit Free Press titled: In Romance or Finance, Compatibility is the Key…money matters should be addressed sooner rather than later.

Talk“If you wait until after you’ve fallen madly in love, it may be too late to extricate yourself,” said Ginita Wall, co-founder of the Women’s Institute for Financial Education.

I couldn’t agree more. Here’s the good news. According to the article, if you’re not ready to talk turkey, at least look for signs that you’re well-suited. For example:

  • Ask about their past experiences, their early memories with money, or how their parents handled finances.
  • Pay attention to their spending habits, and if you’re comfortable with them.
  • Notice how they pay for purchases: cash, debit, or credit.
  • Consider if their lifestyle makes sense. “A person’s choice of car, clothes, and home are obvious conversation starters,” notes one expert.

Love may be blind. But when it comes to money, you’re really smart to keep your eyes wide open.

100 dollar billsHere’s something to make you think. “A woman who routinely negotiates her salary increases will earn over one million dollars more by the time she retires than a woman who accepts what she’s offered every time without asking for more.” That quote comes from Women Don’t Ask: The High Cost of Avoiding Negotiation—and Positive Strategies for Change (Bantam, 2007) by Linda Babcock, Sara Laschever.

One million dollars for speaking up!! What a price we pay for staying silent. If you feel you’re not getting paid what you’re worth (and really, who is???), I’ve got a great resource for you.

The Negotiating Women web site was designed by 2 high powered women, prolific writers and experts on the subject. Best of all, they offer 4 different e-courses that will teach you everything you need to know to be a top notch negotiator…and you can do it, at your convenience, in your PJs. I urge you to check them out.

I’ve been writing books about women and money for over a decade. But it’s only in the past few years that I’ve witnessed a growing trend. Women are coming together for the sole purpose of financial education. And not just in formal investment clubs. Women are forming money book clubs or simply study groups on the subject. They are gathering in person, or through the internet. ( Wife.org offers fantastic money groups).

HandsThis phenomenon sends me right back to the early 70”s when, sparked by Betty Friedan’s book “The Feminine Mystique,” consciousness raising groups began sprouting up. For the first time, women were sharing more than tips on how to catch a man or raise a child. We began searching for meaning and purpose outside the proscribed roles of mother and wife. Those tiny gatherings around kitchen tables sparked perhaps the most dramatic social change in history: the feminist revolution.

But you know what the feminists forgot? Money. Today women make up half the workplace, but financially many of us are still in the dark ages.

I am thrilled with this new dimension of consciousness raising. Women finally understand they need to be financially savvy. And we’re figuring out fast that learning in groups is especially powerful. Women by nature are relationship oriented. We learn best from each other. Combining girl-talk with financial-speak greatly decreases intimidation levels and ups the fun factor exponentially. The result: a growing cadre of economically independent women are reclaiming their power, taking charge of their lives, and having a great time in the process.

In case you missed it, a study group guide is included in the paperback edition of Secrets of Six-Figure Women. I’ve gotten a lot of good feedback from women who have followed it.

Have you joined (or started) a money group? I’d love to hear about your experience.

Diamond RingHere’s a question for you. If you had a choice—a $25,000 diamond ring or $25,000 in stock—what would you pick?

An Oxygen network survey asked women that very question. And you know what? The whopping majority (almost 80%) went for the stock. On the surface, that sounds like great news. But here’s what I’d like to know. How many of those women, if given a $25,000 check, would actually call their broker and buy the stock? Would you? Sadly, my guess is no.

Every piece of research I’ve read says the same thing: women today know full well they need to protect themselves financially, but they still aren’t doing it. The recognition is there, but the resistance is stronger. For example, in a 2004 Prudential Financial survey, 53% of the women said they expected to save and invest more that year. But in 2006, that same poll found only 11% had actually invested in stocks or mutual funds for the first time; only 14% opened a retirement account.

As I see it, when it comes to money, the more things change, the more they stay the same. There is still a frightening level of financial passivity and ignorance among even the most successful women.

The deeper question I have is: What can be done to motivate more women to take control of their money? Is financial inertia something you’ve seen, or struggled with personally? What has worked (or not worked) for you?

Feel free to leave your comments on this blog. If you want to read the same article I read about this survey: http://savannahnow.com//node/344335