If you’ve got a few million, or billion, that you’re keen to give away, you’re about to come into your prime. The next few decades are set to be boom times for philanthropy.
That’s because this isn’t just the era of The Giving Pledge—Bill Gates’ and Warren Buffett’s campaign to encourage the wealthy to give at least half of their net worth to philanthropy—and of the Founders’ Pledge, which encourages entrepreneurs to look ahead and commit to the donation of at least two percent of personal proceeds when they sell their businesses. It’s not just an era in which philanthropy is shifting from the global north to the regions, China, South America, India and the Middle East; or one in which we’re seeing the emergence of both a booming multi-millionaire class and a millennial philanthropic generation with its own beliefs and assumptions…
It’s because this is an era in which, by one estimate, the next decade will see some 14,000 ultra-high net worth individuals globally pass on a history-making figure of US$3.9 trillion to the next generation. Another $26 trillion is expected to be passed on over the subsequent 20 years, making for a gigantic pool of philanthropic capital.
“That could potentially be transformational in many ways,” argues William Higham of trends analysts Next Big Thing. “It chimes perfectly with a global trend towards governments that either don’t have the money to spend on social issues, or have a more hands-off approach, with consumers looking to all kinds of organisations to do more ‘good works’, and, since the pandemic, people feeling more committed to seeing their local neighbourhood and its people thrive”.
But this is also an era in which the very nature of philanthropy is at a pivotal point, shifting away from its historic models—the largesse of the Rockerfellers, Carnegies and Vanderbilts of late 19th and early 20th century, often driven by religious or moral imperatives and addressing immediate needs—to the more dynamic, exploratory and questioning model of the likes of investors George Soros or Netflix chairman Reed Hastings, both of whom gave away more than 20 percent of their enormous wealth in 2024 alone.
Theirs is increasingly a philanthropic effort run on more professionalised terms, taking a more rational, interventionist approach to what money to give away, how and why. That mindset may be a product of the huge ‘new money’ made quickly by the entrepreneurial so-called ‘1%’ —and more so the 0.001%—but it’s brought a fresh focus on innovation and impact.
There is much talk, for example, of moving towards ever more ‘effective altruism’, to use the term coined by the philosopher Peter Singer—the desire to make every philanthropic buck get a maximum bang based on hard-nosed comparative assessments of organisations’ efficacy in their use of donations, then funnelling of money towards those projects likely to have the greatest total benefit. There is much talk too of philanthropy acting not to fire-fight the ceaseless immediate problems that arise, but to take a more systemic approach to building entire eco-systems for more fundamental long-term change; to, as James Alexander of foresight agency Future Agenda puts it, “use their money more catalytically, to take the risks that prove the models that work, so private finance is more willing to follow”.
As Martin Luther King Jr. once noted, charity is “commendable” but “true compassion is to see that an edifice which produces beggars needs restructuring”.
“The fact is that with wealth inequality continuing to grow enormously, among other issues, that’s making it very hard for philanthropists to remain neutral and struggle on pragmatically with the system as it is,” explains Rhodri Davies, research fellow at the University of Kent, UK, and founder of the think-tank Why Philanthropy Matters.
That’s one reasons why there’s growing interest in not merely relieving symptoms but effecting change by leaning into—or leaning on—the engine of change that is government and the public sector.
Theodore Lechterman, researcher in political philosophy at the IE University in Madrid, and author of The Tyranny of Generosity, argues that anything other than addressing root causes now amounts to a kind of “palliative philanthropy”, as he calls it, while recognising that—as the subtitle of his book puts it—this risks corrupting our politics, with rich people given undue advantage in pursuing their own ideologies. A more democratic alternative, he suggests, “may be for philanthropists to act as a countervailing force, levelling the playing field with some other rich, powerful entity with an agenda, the likes of the tobacco industry for example. Or to empower people, through community organisations, to figure out problems on their own”.
Yet as Matt Foster, chief development officer for the sustainability organisation Forum For The Future, argues, taking this admittedly harder grass roots approach is not something ‘Big Philanthropy’—the 1%, as well as foundations, institutions and corporations—is yet comfortable with.
“Not many [in Big Philanthropy] want to give up control of their donations, some because they lose the reputational benefit, but also because they’re used to using their own money very intentionally,” he suggests. “People who have been very successful in their field tend to want to determine how their philanthropy goes, probably because they believe they can solve big problems [in the world], as they have in their work. So Big Philanthropy so often gives to big organisations that can tell them how every dollar is spent.
“The problem is that these are rarely edgy, front-line organisations,” he adds. “Sure, there’s more of a shift towards philanthropists using advisors, but it’s easy to see how the many changing ideas now in play about how philanthropy should be done is leaving some tied up in knots”.
There are some clear-sighted exceptions: Jeff Bezos’s ex-wife McKenzie Scott, for example, is pointedly giving her considerable wealth away to causes up front and with no strings attached; while in early 2024 Marlene Englehorn, heiress to the BASF chemical company fortune, announced she would randomly select a panel of Austrian citizens to decide how the money should be spent.
But, as Lechterman point out, even this is not without its controversy: why might a citizen’s assembly be regarded as especially democratic rather that “Lottocratic”? “Then,” he says, “there is the risk that groups of people like this may tend to converge on vanilla options, while the choices of kooky billionaires, despite their faults, may do more to widen and challenge certain orthodoxies. Well, besides capitalism, of course…”
Speaking of capitalism, corporate philanthropy—donations by big businesses—may be a relatively tiny player on the philanthropic landscape, but also raises its own questions. Skeptics may argue that a willingness among corporations to think philanthropically as part of a commitment to CSR—corporate social responsibility— is little more than it looking out for itself: it’s increasingly important both to hiring the best talent, and to keeping it. Dana O’Donovan, leader of Deloitte’s Social Impact and Monitor Institute, concedes that what she calls the first wave of corporate philanthropy was about managing risk —“more an add-on—‘look, we save puppies!’—rather than core to business”.
“But a younger workforce just has different expectations of their employers now,” she adds, citing a 2023 survey in which 95 percent of respondents expected their employer to have a positive impact on the community. “I’m not a betting woman but I think of that research had been done just a decade ago that figure would have been drastically lower. But consumers too have very clear ideas now as to how they want to interact with companies and are quick to act if they don’t like what they see”.
What was once a tricky face-off between “the two powerful paradigms of making money and giving away money,” as O’Donovan puts it, is now about using a different set of resources to those of your billionaire class—pro-bono work, in-kind donations, community engagement—to different ends. That’s even if much of the corporate world is still working out what those are, even if in some instances it still leaves the ethics of their supply chains, tax management or employment practices somewhat lacking.
Put all this together and philanthropy might be described as being in a state of seismic potential, but also one of flux or of experimentation—one that seems to be especially pronounced since the pandemic and the outcome of which is far from clear. After all, just because there is that gigantic, potentially transformational pool of philanthropic capital doesn’t mean it will be used to philanthropic ends.
As Ryan Ginard, author of Future Philanthropy, explains, the future of philanthropy hinges not just on a transfer of dollars between generations but of values too, and not least because while self-made wealth tends to be donated, inherited wealth tends to be conserved. “This transfer is an opportunity, not a guarantee,” he stresses. “Families and advisors need to engage those heirs early, showing them how philanthropy can reflect their passions and drive meaningful change”.
“But I think they next generation will have more awareness of the critiques of philanthropy from the outset,” reckons Davies. “There will also be more women philanthropists and the evidence suggests they do things differently too, with more focus on social justice issues. But, yes, it’s all too easy to easy to assume the next generation will come with new ideas and enthusiasm for philanthropy—that they’re just waiting to tear up the script. I’m really not sure that will be the case”.
That’s perhaps down to the fact that debates around the nature of and best use for that seismic potential remain confusing, even if more debate is, Theodore Lechterman suggests, precisely what’s needed to make the best of the coming tsunami of spare cash.
“There’s no shortage of generosity out there but we still need much more serious reflection on philanthropy’s goals and restraints relative to political power,” he believes. “The problem is that anyone not already steeped in these big questions is hard to reach. Much as there are all sorts of complex issues discussed in the press, or by public advocacy bodies—climate change, for example which is also very confusing—we need the same for the proper use of philanthropy”.
Not for nothing then is a dominant proportion of large donations in the US still, rather conventionally, given to those institutions that—from a global perspective—arguably hardly deserve them; namely, the donor’s alma mater. Why so? Because universities have long become expert in leveraging relationships and clear cases for support that might well serve as exemplary to others seeking financial aid. And because, well, that’s still an
easy choice to make.
Does such laziness in any way lesson philanthropy’s importance over the coming decades? Absolutely not. What’s important to note is that philanthropy isn’t just a very nice extra on top of government spending, however inadequate or misplaced that can often seem around the world. According to Delphine Moralis, the CEO of the Philanthropy Europe Association, which works with multiple institutions to pool philanthropic knowledge and improve effectiveness, it’s a completely different funding stream and more vital than ever.
“Obviously the world faces some deep challenges right now but philanthropy has a unique role to play in addressing those precisely because it can invest its resources with a flexibility that governments can’t,” she argues. “When governments spend tax-payers’ money [as most do] that requires tight procedures and close scrutiny. Philanthropy is freer to try innovative approaches, to respond fast or, conversely, invest over the much longer term. If it behaved like government spending it wouldn’t get the same results. Of course, it still has to be accountable but it doesn’t have to answer to the public in the same way as government”.
It’s a hard sell when there seem to be so many other global crises that need to be prioritised, but this flexibility also allows philanthropy – which typically skews towards education and health, and more recently other of the UN’s sustainable development goals – to support causes that governments tends to put to the back of the queue, or avoid because they’re deemed somehow inherently controversial for state funding: the likes of research, the arts, culture.
Indeed, Amy Schiller, author of The Price of Humanity: How Philanthropy Went Wrong and How to Fix It, argues that these areas are actually preferable for philanthropic support. Peter Singer wouldn’t approve, but maybe all those ‘pillars of the community’ whose names have been etched into plaques outside libraries, theatres, art galleries and museums for generations had it right. As Higham points out, social media now makes that kind of showiness even more attractive.
Inevitably, in our ceaselessly measured world, perhaps only data will tell. The digitalisation of philanthropy is seeing more transparency and so trust—in the communities in which philanthropy operates, for some time now uncertain of the seeming machinations of what is sometimes suspiciously called the ‘global philanthropic oligarchy’—but also a more informed and targeted approach to giving, which AI and machine learning looks set to optimise to spectacular effect.
But the familiar promises of technology aside, here’s another thought: might something as fundamental as love also prove crucial to the future of philanthropy? If that sounds a little sentimental and unscientific, Adrian Sargeant argues otherwise. He’s the first professor of fundraising, with the University of Indiana, and now head of the Institute for Sustainable Giving, an organisation pioneering the field of philanthropic psychology. “Donor motivation is one of the most studied topics in the social sciences now, but less well understood is what type of person gives and what identity they’re articulating when they do and how to communicate with them about that,” he says.
Just getting the language right—yes, thanking people not just for their ‘money’, ‘gift’ or their ‘contribution’ but for their love, for what they often see as a moral act, and speaking to the well-being of a person and their sense of connection to a cause or a community—can more or less double the amount given, as Sargeant’s research over the last three years has evidenced. “Fund-raising [as a sector] has honed its skills in identifying need and identifying donors, but thinking about how the donor feels about that they’re doing is less intuitive. But giving makes people feel good, so it’s a win-win for donor and [recipient] organisation. We’ve somehow forgotten that [the Greek root of the word] philanthropy means ‘love for mankind’.”
That kind of thinking may prove all the more important too given what Moralis argues is a crucially necessary shift in emphasis in the image of the philanthropic world. “The public is encouraged [by the media] to think of philanthropy as being all about Bill Gates—or at least a few white men who have made a huge amount of money,” she says—and maybe this article falls into the same trap. “But the fact is that millions of people around the world regularly give money”.
Certainly, for all of the giving by the 1%, by foundations, institutions and by corporations, add that all up and it’s still eclipsed by the gifts of everyday individuals. By the likes of you and the people you know, in other words. For all that many may claim that humanity is in a very bad place right now, humanity is also extremely magnanimous in its desire to help not just headline causes, or pandas, but complete strangers too.
“Philanthropy is often seen as a tool of the elite but this perception stems from a misunderstanding of the term. Philanthropy isn’t limited to billion dollar endowments.
It’s equally about giving $20 for a friend’s fun run, volunteering at a local school, supporting grass roots causes,” says Ginard. “We need to broaden the narrative and demystify philanthropy. At its core philanthropy encompasses giving through time, talent, treasure, ties and testimony. Everyone can be a philanthropist”.