The Woke Wealth Effect: A New Era of Philanthropy and Investing

The notion that wealth is going “woke” might seem oxymoronic, given traditional associations with old money, privilege, and tradition. However, research from UBS suggests the incoming generation of wealth holders will be anything but your grandparents’ rich folk.

As Baby Boomers hand over power to Gen X, millennials, and Gen Z successors, it’s clear this new wave is younger, more female, and – crucially – more openly queer. Gallup and UBS data paint a picture of emerging investors eager to break free from their predecessors’ legacy and committed to using wealth as a force for good.

Gen Z and millennials identify as LGBTQ+ at rates four times higher than Baby Boomers, with 23% and 10%, respectively, claiming this label. While these younger generations are more likely to inherit bulk of their parents’ wealth, they’re also inheriting a cultural landscape in which being openly queer is increasingly normalized.

For investment managers, the implications are profound. Paul Donovan at UBS notes that LGBTQ+ investors will need tailored strategies and approaches that acknowledge their unique experiences, challenges, and aspirations – given persistent prejudice despite growing acceptance of same-sex marriage and relationships in the Western world.

One key area where this new wave is making its mark is in philanthropy. Research from Morgan Stanley highlights a growing demand among young investors to prioritize equity and inclusion across various products and strategies – driven not just by LGBTQ+ individuals but also heterosexual investors with LGBTQ+ household members. Single women, who tend to give more broadly than their male counterparts, will play an increasingly influential role in shaping the philanthropic landscape.

The shift signals a fundamental redefinition of what “success” looks like for wealthy individuals. Legacy investing and its attendant values are becoming intertwined with personal identity. Gone are the days when accumulating wealth was an end in itself – now it’s about how this new generation chooses to wield their influence.

As the Great Wealth Transfer unfolds, it’s clear this is not just about who inherits what but also how they choose to use their newfound power. The woke wealth effect promises to inject a dose of empathy, compassion, and social responsibility into high finance. Will investors rise to meet the challenges and opportunities presented by this seismic shift? Only time will tell.

Ultimately, it’s not just about dollars and cents; it’s about how we spend our lives, talents, and resources. The new face of wealth may be younger, more female, and more openly queer – but it’s also a generation redefining what it means to be wealthy in the first place, using its privilege to create a world that’s more just, equitable, and compassionate for all.