By 2030, women will control much of the $30 trillion in financial assets, and studies show that women are increasingly aware of and excited about the potential of investing in causes that matter to them. For many women, the goal is less about beating a benchmark and more about achieving goals that help themselves, their families, as well as their communities.   

So, what are some ways women can make a difference with their money?  

1.    Open a Donor Advised Fund

2.    Invest in funds that follow ESG guidelines.

3.    Learn about Gender Lens Investing

1.    What is a Donor Advised Fund? (DAF)

A donor-advised fund (DAF) is a charitable giving account designed exclusively to invest, grow, and give assets to charities for meaningful and lasting impact. When you open a DAF, you are essentially opening your own miniature nonprofit foundation.  

Opening a DAF is simple.  It is a lot like opening a regular investment account. First, you need to find a nonprofit sponsoring organization that offers DAF services and accounts.  Fidelity, Schwab, and Vanguard all offer such accounts. Click here for a comparison chart. 

Once you donate your money to the DAF, there are investments you can choose to “park” your money. When you're ready, you recommend a grant to a charity you care about, and your DAF sponsoring organization will send a check to that charity.

 BIG CAVEAT- Once you donate your money to your DAF, the money no longer belongs to you.  You have made a charitable contribution to a nonprofit sponsor and it can only be used to give to charitable organizations. 

You might be wondering how opening a DAF makes an impact.  Below are four reasons:

(1) You may receive a tax deduction upon funding your DAF, which gives you more money to donate to your favorite charity vs. paying the IRS. See illustration 

(2) You can donate appreciated stock into the account and avoid paying capital gains tax. (Again, giving you more money to donate).

(3) The money in the account can be invested and grow tax-free, and this tax-free growth puts more money in a charity's pocket vs. the IRS.

(4) A DAF can pass the gift of philanthropy to the next generation.  You can give your children shared advising responsibilities giving your family a shared mission. 

2.     What is ESG Investing?

"ESG investing is a form of socially responsible investing that prioritizes financial returns alongside a company's impact on the (E), environment, (S), society, and (G) governance."[1]As an ESG investor, instead of putting your money into just any mutual fund or ETF, you can instead choose a fund that screens companies for their Environmental, Social, and Governance impact.

The fund manager may screen for environmental issues such as how much energy a company uses and what is their pollution output.  Is the company proactive toward opportunities to reduce climate change?  They also screen for the societal aspect, which focuses on how the company handles issues of diversity and inclusion, human rights, faith-based issues, and the health and safety of employees.  The governance component focuses on topics such as how the company conducts business within and without its walls. For example, does it have a mandate to have a certain percentage of women on its board?  How transparent is the company with its reporting and shareholder rights?

ESG investing has come a long way, and there are many good funds to choose from. Here are a couple ESG funds: 

•  iShares MSCI USA ESG Select ETF- symbol: SUSA

•  iShares MSCI Global Impact ETF- Symbol: SDG

ESG investing is a good overall strategy for making a positive impact with your money.  However, if you want to drill down even further and put your money toward a specific priority, read idea #3. 

3. What is Gender Lens Investing?

Gender lens investing is a form of ESG investing.  “Gender Lens investing aims to use capital intentionally to achieve positive impacts on women and girls. Gender lens investing is a powerful new approach.  It considers the impact of financial investments, both good and bad, on women and girls.  It also recognizes investments’ potential to generate financial returns and advance gender equality simultaneously.” [2]

I believe GLI is a crucial investment strategy where we, as women, can make a powerful impact with our money.  When we consciously decide to invest in companies that help women have equal access to education, health care, decent work, and representation in political and economic decisions, the trickle-down effect on overall world health is massive!

 Two examples of ETF funds that screen with a gender lens is:

• SPDR SSGA Gender Diversity ETF- Symbol- SHE

• Fidelity Women’s Leadership Fund- Symbol- FWOMX

If you are interested in learning more about impact investing, please contact me, and let’s have a great conversation about you and your investment priorities. 

 

 

 

[1] https://www.fool.com/investing/stock-market/types-of-stocks/esg-investing/

 

[2] https://www.bsr.org/en/our-insights/blog-view/how-gender-lens-investing-can-transform-your-impact-strategy

 Marathon Wealth Management, LLC is an Investment Advisor registered with the State of Washington. All views, expressions, and opinions included in this communication are subject to change. This communication is not intended as an offer or solicitation to buy, hold or sell any financial instrument or investment advisory services. Any information provided has been obtained from sources considered reliable, but we do not guarantee the accuracy, or the completeness of, any description of securities, markets or developments mentioned. We may, from time to time, have a position in the securities mentioned and may execute transactions that may not be consistent with this communication's conclusions.