Monday, March 30, 2015

Fiscal Unequals and Household Philanthropy

Our blog post this week was written by Gena Rotstein, CEO of Dexterity Ventures Inc., and recent graduate of the Calgary FEA Program.

Societal demographics are shifting. Women make up 50% of the North American population and almost the same for the workforce. A growing number of these women are taking on upper management roles (37% of upper management positions) 1 and as a result, women are becoming the primary bread-winner in a family. As such family dynamics and household financial management processes and norms are evolving. Various studies state that in half of all households in North America, financial management decisions are shared equally between partners – a significant change from the previous generations.

In contrast to this, human sociology and social norms are pushing against this trend; for the foreseeable future the majority of the rising generation of entrepreneurs who are the wealth creators, will likely be men. However, as the pay equity gap closes, and women in leadership roles continues to rise, within the next three generations, it is my observation that the wealth creator within a first generation family enterprise will likely be split equally between both genders.

 Why is it important to raise this issue now? As more women achieve business success, take over family enterprises, and hold a more dominant role in the wealth creation and financial management within households more pressure is being put on what society has indicated as the norm. This type of relationship stress, as Jay Hughes points out, in a recent publication that he co-wrote with Joanie Bronfman and Jacqueline Merrill entitled Reflections Fiscal Unequals, does not have a positive track record in North American family units “…history has presented a very bleak picture of the outcome of relationships with the woman’s financial wealth exceeds that of her partner.”

For families that are working within a Family Enterprise/Family Business model the financial stresses that fall under one sphere can easily be carried over into another sphere.

By ensuring that the lines of communication between partners are “safe” and open, you can create the space for tough conversations to happen in the family sphere without carrying over into the business and ownership spheres. 

To continue reading the full article click here.


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