From clothing to home furnishings to cars, 85 percent of consumer purchases are driven by women, according to Forbes. But the idea of getting more for your money takes on a much bigger meaning when women direct those dollars to companies with values and practices that line up with their world view.
“We know women control most of the household spending, and that increases with age,” says Angie O’Leary, head of Wealth Planning at RBC Wealth Management–U.S. “There’s a lot of power in making decisions about how you spend that money. That’s a way for women to vote for causes or organizations or products they believe in.”
Nearly half of women are the primary breadwinners in their household, an almost four-fold increase since 1960, and the number of wealthy women is growing twice as fast as the number of wealthy men as baby boomers age and women enjoy longer life expectancy.1 Still, plenty of companies continue to aim their marketing messages mainly at men, “even though women are doing most of the buying,” O’Leary says. And it’s not just older women yielding purchasing power.
“Younger generations of women are putting off marriage, which means they are making larger purchases including homes, cars, and other big ticket items largely on their own without a partner in the decision-making process,” O’Leary says. “You look at my generation—the baby boomers—we got married right out of college and we had $500 to our name. It’s a very different story today.”
The individual buying choices women make have a significant impact on the economy and there’s often more on their minds than quality and style when evaluating what products to buy. Just under half of baby boomers and one-third of millennials align their spending with causes they care about, according to a study of high-net-worth women and men conducted by The Economist Intelligence Unit, sponsored by RBC Wealth Management. And women are a force behind that trend.
O’Leary says some women take a hard look at whether businesses are committed to the causes close to their hearts—such as sustainable practices, treating employees fairly or promoting women to leadership—before they decide to make a purchase. And thanks to a wealth of information online and via social media, today’s savvy consumers know when a company is only paying lip service to that cause.2 With a little effort and time, they can tell which companies are good employers, give back to the communities in which they operate; and have practices in place that promote diversity and inclusion. “A company’s purpose must exist in practice, beyond its advertising messages, and it should be easy for consumers to see,” O’Leary says.
Nonprofit SheEO helps women support women
That same spirit of harnessing women’s economic power to support women propels SheEO, a Toronto-based non-profit with a crowdfunding-style business model that provides backing to female entrepreneurs. Founder Vicki Saunders set up the unique business model to support female founders who, statistics show, have great difficulty finding funding.
SheEO operates on what Saunders calls “radical generosity.” In each region where the organization operates, SheEO recruits groups of 500 women who each donate $1,100 to a fund. The fund makes zero-interest loans to five companies founded and run by women. Instead of going back to the investors, the money gets reinvested into the fund and loaned out again to new ventures, which is also what makes it “radical” in the financing world.
Saunders, a self-described serial entrepreneur, has started and grown a handful of successful business ventures of her own across Europe, Canada and Silicon Valley. “I’ve become so enamored with the ability to notice problems in the world, and then come up with creative solutions and persevere to figure out how to solve them. People who are out there doing things like that are my kind of people,” she says.
Millennials and women are leading the charge in responsible investing
More women are also taking a problem-solving approach to their investment portfolio, looking to a growing category of responsible investment options that weigh environmental, social and governance factors alongside more traditional financial concerns and goals. Responsible investing is most popular among millennials, followed by women, says Ann Senne, U.S. Chief Administrative & Integration Officer at RBC.
“You can do well for yourself and you can do well for society. You don’t necessarily have to choose,” Senne says. “If you can be on par with other investment options but also have an impact, why wouldn’t you?”
In fact, two-thirds of women believe they have more opportunity to tackle societal issues through impact investing, compared with 56 percent of men, according to a study of high-net-worth women and men conducted by The Economist Intelligence Unit, sponsored by RBC Wealth Management.
“Research shows that women are even willing to give up the ability to donate to charity if they are able to invest alongside what’s important to them and make an impact now,” Senne says. “Women are wanting to vote with their dollars in terms of issues that they think are important—to try to affect that change earlier and not waiting until that wealth is passed on to another generation to do so.”