Research Summary

Survey Finds Business Owners Are Philanthropic Leaders

Center for Women’s Business Research  ·  November 14, 2000

November 14, 2000

Washington, DC – Women and men business owners surpass the general population in their level of involvement in philanthropy, both in money donated and time volunteered, according to a new survey that was conducted by the National Foundation for Women Business Owners (NFWBO), in cooperation with The Committee of 200 (C200) and underwritten by Merrill Lynch’s Center for Philanthropy and Nonprofit Management.

Business owners make charitable contributions through their businesses and many have programs to encourage their employees to volunteer. Women entrepreneurs are highly motivated philanthropists who are more likely than men entrepreneurs to participate in leadership roles when they volunteer for charitable organizations. The report, “Leaders in Business and Community,” is based on a national survey among 226 women and 235 men business owners.

“Nine out of ten business owners (92% of women and 88% of men) contribute money to charities, compared to 70% of all U.S. households surveyed by the Independent Sector1 in 1999,” noted NFWBO Chair Nina McLemore. “Nearly one-third of the business owners surveyed by NFWBO (31% of women, 30% of men) make significant personal charitable contributions of $5,000 or more per year, including 15% and 13%, respectively, who contribute $10,000 or more.” McLemore is President of Regent Capital, a private investment firm, and a member of C200.

Entrepreneurs are also active volunteers with charitable organizations. Seven out of ten of the business owners surveyed (68% of women, 72% of men) by NFWBO volunteer at least once in a typical month, compared to 62% of all women and 50% of all men in the U.S.

Women and men business owners who contribute and volunteer have increased their philanthropy in recent years. Fully half (52%) of women business owners state that their level of financial support has increased over the past five years, and 51% say that the hours devoted to charitable activities have likewise increased. Among men, 48% say their financial support has increased, and 39% say that the time they devote to charitable activities has increased.

In many ways, women and men business owners are similar in their philanthropy. Not only are they alike in their charitable giving, they volunteer a similar amount of time – an average of about a dozen hours per month. However, women entrepreneurs are more likely to use that volunteer time in leadership positions. “These women not only lead their businesses, they are leading charitable organizations by serving on boards, and chairing fundraisers and special events,” noted McLemore.

“High net worth women business owners are even more philanthropic than their male counterparts,” observed Doris Meister, Chairman and CEO, Merrill Lynch Trust Company. “Half (50%) of women with assets of $1 million or more contribute at least $10,000 annually to charity compared to 40% of men entrepreneurs. While women and men business owners with high net worth both volunteer an average of about 16 hours a month, 94% of these women compared to 83% of these men serve in leadership positions with charitable organizations.”

Philanthropy is not limited to a homefront activity for business owners. Fully three-fourths of women and men entrepreneurs make monetary contributions to charitable organizations through their businesses as well. The majority of those surveyed give similar amounts for similar reasons through their business as they do personally.

Business owners are increasing the impact of their workplace philanthropy by establishing programs to encourage voluntarism by their employees; 39% of both women and men business owners who have employees have established company policies to encourage philanthropy. These policies include allowing unpaid leave for volunteer activities, providing paid hours for volunteer service, and having a policy for granting extended leave for philanthropic activities.

Just over half of the women and men business owners surveyed by NFWBO say that their business philanthropy is mostly related to being socially responsible; only 8% of women and 12% of men say that it is done primarily with the expectation of an economic return. About one-third report that both reasons play a role in their philanthropy.

“When making financial contributions, more than 90% of the women and men business owners surveyed say that it is important that the organizations to which they contribute are well-run,” noted Deborah Szekely, a C200 Foundation Director. “While women and men business owners both say they need to feel passionate about the organizations they support, a somewhat greater share of women (89%) than men (82%) say that this is an important factor.”

Women business owners are more likely than men business owners to want to be recognized for significant charitable contributions, though a majority of both women (55%) and men (68%) prefer not to be recognized at all. Those who would like recognition said they would like a thank you letter, a published listing with other donors, or some type of personal or public recognition.

Though most shun recognition, approximately half of the women and men business owners surveyed acknowledge that it is important to be a role model and to show leadership in philanthropy for others. “As women acquire greater personal wealth through business ownership, rising salaries, and inheritance, it is important for them to leverage their philanthropy by serving as role models for other business women,” noted NFWBO Chair McLemore.

Other findings from the NFWBO survey, “Leaders in Business and Community,” include:

• Women business owners are more likely than men business owners to say that their interest in philanthropy was prompted by family tradition or parental example (23% of women compared to 14% of men).
• Women business owners began their volunteerism at a younger age than men business owners. Almost half (48%) of women business owners began before adulthood, compared to 40% of men business owners.
• More than half of women and men entrepreneurs report that the way they are asked to make a charitable contribution has an impact on their decision whether or not to support an organization. Factors that encourage business owners to support an organization include that they believe in the cause, that the solicitor is not pushy, that the solicitor is pleasant and polite, and that the solicitor demonstrates a need. Factors that discourage support include pushy solicitors who will not take “no” for an answer and phone solicitations.
• Most women and men business owners make their contributions in cash or gifts of other assets; others also use planned giving, family foundations, or corporate foundations.
• The top three types of organizations to which business owners provide their greatest level of financial support are: religious (55% of women and 52% of men); local community service (38% of women and 43% of men); and youth-related (38% of women and 41% of men).

In November 1999, the National Foundation for Women Business Owners (NFWBO) released a study, “Philanthropy Among Business Women of Achievement.” The study – conducted with support from Merrill Lynch, The Committee of 200 (C200), and Simmons College – was ground-breaking research into issues of philanthropy among high net worth women. A summary of the study results is available on NFWBO’s web site, www.nfwbo.org, or contact NFWBO for additional information.

The National Foundation for Women Business Owners (NFWBO) is a nonprofit research and leadership development institute. NFWBO is recognized as the premier source of information and intelligence on women business owners and their enterprises by corporations, policy makers, financial institutions and the media. Up-to-date intelligence about women business owners and their enterprises worldwide is documented in NFWBO’s original research and analysis.

The Center for Philanthropy and Nonprofit Management at Merrill Lynch (The Center) was created to provide an unparalleled range of high-quality financial-management and fiduciary services to nonprofit organizations. Through Merrill Lynch Trust Company2, The Center provides charitable fiduciary services to more than 4,700 charitable trusts with almost $4.0 billion in assets. In addition, Merrill Lynch maintains nearly 28,000 nonprofit accounts with assets totaling more than $21 billion through the Endowment Managementsm Account service.

Endowment Management is a service mark of Merrill Lynch & Co., Inc.

The Committee of 200 (C200) is the international organization of preeminent businesswomen dedicated to recognizing and promoting entrepreneurship and business leadership among women. The Committee of 200 Foundation was established in 1986 to foster and recognize entrepreneurship among women through grantmaking and mentorship.

Methodology: A telephone survey was conducted among a nationally representative, stratified sample of women and men business owners in the United States from July 10 through August 9, 2000. A total of 461 interviews were completed among 226 women and 235 men. The sample was stratified in order to interview a sufficient number of owners of larger firms for analysis. The interviews were then weighted to correct for the oversampling among larger firms. The sampling error for a sample size of 226 or 235 is approximately "6.8% at the 95% level of confidence. This means that, 95 times out of 100, the survey results will be within 6.8% of true population values.

_________________ 1 Independent Sector is a coalition of leading nonprofits, foundations, and corporations strengthening not-for-profit initiative, philanthropy, and citizen action. Data in this press release that refer to the U.S. adult population are from the 1999 Independent Sector report, “Giving and Volunteering in the United States: Findings from a National Survey.”

2 The services that are described as being offered by Merrill Lynch Trust Company are provided by one of the following institutions: Merrill Lynch Trust Company (New Jersey); Merrill Lynch Trust Company (Florida); Merrill Lynch Trust Company of America; Merrill Lynch Trust Company of California; Merrill Lynch Trust Company of Texas; Merrill Lynch Trust Bank of Michigan; Merrill Lynch Trust Company of North Carolina; Merrill Lynch Trust Company of New York; or Merrill Lynch Trust Company, FSB.

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