By Sofia Michelakis
My 8th grade school photo with my “bi-level” (aka mullet) cut
I refuse to accept that the mullet is back. For me, that hairstyle will forever be associated with awkward middle school dances. Maybe that’s why I always view the onslaught of New Year predictions and trends with a healthy dose of skepticism.
At Phīla, we serve a wide range of high net wealth individuals, couples, and families. We are discerning about separating meaningful trends from fads which, like my 80s mullet, are best quickly forgotten. In this post, we share the first three of the top themes we’ve been noticing and how givers wanting to have a deeper social impact could apply them. In future segments, we will share additional relevant trends.
Trend #1: The Rise of Financially Independent Women
Whether because they earned it themselves or came into financial abundance through divorce, death of a spouse, or other inheritance, women are increasingly holding the reins of large amounts of wealth. In 2020, McKinsey & Company predicted a massive wealth transfer in this decade, with White women baby boomers as the biggest recipients. According to Fast Company, women currently control $11 trillion in assets, and that figure is expected to nearly triple by 2030. We see this growing trend in our client base as well.
However, even when they have financial power, women can sometimes second guess themselves and their decisions about how they deploy their wealth or have their priorities minimized. We have observed that women–especially those over 60 in that baby boomer demographic–often defer to the men in their families and others who are so-called “experts”, even when those men are of similar age, education, and intelligence.
To be sure, the finance industry is in need of an overhaul to better serve the philanthropists of today and tomorrow, as has been aptly written about elsewhere. Over the past few years, we have increasingly engaged with our clients and like-minded wealth managers and other advisors with a common goal of helping women gain more confidence in determining the purpose of their wealth and becoming more effective financial stewards.
What to make of this trend: To our women readers, we want to support you to step into your financial power with confidence. When it comes to where to invest your philanthropic dollars, you likely know more than you think you do. Whether it’s cheering you from the sidelines, coaching you behind the scenes, creating space in meetings for your voice, or connecting you to fellow women travelers in philanthropy, we have your back! To our male readers, we are looking for allies. Support the women you know–your spouse, your mother, your sister, your colleagues, etc. Validate them, support their decisions, advocate for them to be recognized in leadership roles, ask questions to understand and learn, and be willing to listen.
Trend #2: Engaging In Democracy Is Social Impact
Regardless of your politics or whether you have a political giving strategy, this year’s election will have huge consequences for every sector and every cause about which you care. You will no doubt be asked repeatedly to give to candidates, but that is certainly not the only way to be active in this year’s election cycle.
Some people reflexively believe that their political giving is not part of their social impact strategy. We think differently. We do not cede the final say on defining social impact to the IRS, which simply defines rules for what can be considered tax deductible or not. Political giving and engaging in democracy can be part of a holistic social impact plan.
Several of our clients have begun exploring the connection between unions and democracy. Indeed, the Democracy Alliance has noted strong evidence that “Labor unions are the countervailing force the United States needs against nearly every trend eroding democracy, including rising political polarization and extremism, partisan pressure on the electoral process, harmful immigration policies, and growing wealth disparities.”
Other clients are asking their current grantees about how they are engaging in advocacy activities at the local and national levels, either as a 501(c)(3) or through an aligned 501(c)(4) entity. In addition, we are currently supporting a few of our clients to bring in political advisors when needed to develop a specific, targeted giving strategy for the 2024 election cycle, integrated with their overall social change vision.
What to make of this trend: Don’t silo your political and philanthropic giving. Be sure that the staff and advisors with whom you work are informed about your goals and interests in democracy and elections so that they can better harmonize your giving strategy. You may find out that you can use philanthropy as a tool to advance many of your interests in supporting a healthy democratic society.
Trend #3: How Philanthropy and AI Intersect
The potential threat of AI to society and the social causes you care about is less about machines run amok ala the Terminator films, and more about what the government and your fellow humans might do. Think of AI as a ridiculously powerful tool – in the right hands, it may provide unique ways to speed scientific innovation and create social good; but in the wrong hands and without appropriate guardrails, it can be misused and lead to greater inequality, oppression, and other harmful consequences.
Common concerns about AI include future disruptions in the labor force, potentially putting millions out of work. But the impacts are not just theoretical. Crucially, we are already witnessing significant harms today. AI technology is already responsible for cutting safety net benefits, placing kids with loving parents into foster care, and falsely accusing Black and brown people of crimes.
There are huge ethical questions about this new technology, both in who benefits and who makes decisions. Philanthropy can play a significant role in ethical approaches to AI, as we know that under-resourced populations are less able to advocate against well-financed corporate interests. Several field-building initiatives are already emerging to foster more shared intelligence and agency around the philanthropic response to AI. For example, through a network of philanthropic advisors in which we are actively engaged called “P150,” we have been exposed to some of the leading thinkers who are exploring the big questions for philanthropy and AI. One of these experts, the Effective Institutions Project, has put together a funder’s guide to AI governance and strategy, which offers both a broad framework for thinking about philanthropic opportunities in AI and examples of specific organizations doing impactful work.
What to make of this trend: Consider how AI will impact the social issues you care about as well as the implications for your own philanthropic organizations. We can help you identify nonprofits engaged in areas such as policy development, research, advocacy, talent development, technical assistance, and field-building that could benefit from additional funding. We can also facilitate family / board meetings to discuss ways to align the implications of AI to your philanthropic organization’s values.
We would love to hear your thoughts about these and other trends that are top of mind heading into the new year via this two minute, confidential survey. We’ll check back soon to share survey results along with trends 4 and 5. Stay tuned!
Resources
Women Becoming Confident Financial Stewards
Read Phīla colleague Janell Turner’s previous blog post about aligning financial investments with your values, featuring Invest for Better (August 30, 2020)
Download Rockefeller Philanthropy’s Guide for Women and Giving
Attend Women Moving Millions Annual Summit (May 1-3, 2024, Brooklyn, NY)
Ideas for Engaging in Democracy
Be inspired by an Interview with Melinda French Gates on her efforts to expand female representation in elected office (Washington Post, July 27, 2023)
Explore Democracy Fund’s Grant Database
Listen to Baratunde Thurston's “How to Citizen” podcast, which focuses on love, connection, and how to create “a dope culture of democracy” (available on most streaming services)
Learning More About AI and Society
Skim nonprofit tech guru Beth Kanter’s practical advice in 8 Steps Nonprofits Can Take to Adopt AI Responsibly (Stanford Social Innovation Review, September 7, 2023)
Watch the documentary film Coded Bias, which follows the dramatic journey of Joy Buolamwini, an MIT researcher who discovered prejudice in machine learning algorithms and launched a movement for transparency and accountability (available on Netflix and PBS)
Read Automating Inequality: How High Tech Tools Profile, Police, and Punish the Poor, by Virginia Eubanks (MacMillan Publishers)
