The coming decades will witness an unprecedented movement of private wealth from generation to generation. It is estimated that about $124 trillion will be inherited by 2048, as reported by Fortune, creating one of the largest financial transformations in modern history.
While much of the discussion has focused on family fortunes and succession planning, attention is increasingly turning toward what this change could mean for philanthropy. Wealth inequality has become a more visible issue than it was a generation ago, and expectations surrounding charitable giving have changed along with it. Younger heirs are entering into conversations that in the past were almost entirely owned by their parents and grandparents, bringing different priorities and a greater willingness to question established practices.
In many wealthy families, philanthropy is no longer limited to preserving inheritances. Rather than identifying primarily as donors, many see themselves as participants in broader efforts to support lasting social change.The shift is not limited to the timing of charitable giving. Young philanthropists also approach their role differently than previous generations.
How younger heirs are redefining philanthropy
The Milken Institute believes that philanthropy is approaching a period of great change as younger family members become more involved in decisions regarding inherited wealth.
Rather than accepting existing structures, many question whether traditional models are still keeping pace with the pace and scale of the social and economic challenges we face today.Growing public attention to inequality has changed expectations surrounding wealthy families, said Melissa Stevens, executive vice president of the Milken Institute for Strategic Philanthropy and co-author of the report.“Wealth inequalities have never been greater, and we are keeping a sharp eye on the wealthy.
“You raised the stakes.”The report indicates that pressures come from several directions. Public scrutiny of the fortunes of billionaires has increased in recent years, while younger generations are also examining whether family foundations and charitable commitments are moving quickly enough to address pressing issues.
Why younger heirs are more likely to make charitable giving
For many years, many of the world’s richest families have viewed philanthropy as a long-term responsibility, often planning charitable distributions over several decades.
Initiatives like the Giving Pledge have encouraged billionaires to devote the majority of their wealth to charitable causes, although these commitments rarely come with specific timelines.However, within some of those families, younger heirs are encouraging a different approach. Katherine Lorenz, who leads Giving Pledge’s Next Generation group, said she has seen younger relatives encouraging older family members to start distributing more of their wealth rather than delaying large donations.As Fortune reported, “I see more of the younger generation putting pressure on their parents to give more,” Lorenz said. “[They’re saying]“Mom and Dad, you’ve made enough money, it’s time to give it away and give it away faster.”“Many of them are willing to deploy capital faster. Sometimes the barrier is the older generation.”
Why is trust-based philanthropy gaining momentum?
Lorenz believes that many young philanthropists ask different questions before deciding where to direct their money.
Although immediate support remains important, there is a growing interest in understanding the conditions that create social problems in the first place. Using housing as an example, she explained that helping people who need it most is only one part of the challenge.“Why do we have so many homeless people? What’s going on, and how can we get fewer people into this situation?” Another area where attitudes are changing is the relationship between donors and the organizations receiving funding.
Instead of imposing detailed restrictions on grants, some philanthropists have begun offering unrestricted financial support, allowing recipient organizations to decide how to use funds based on local priorities and expertise.MacKenzie Scott has become one of the most prominent examples of this approach after distributing nearly $26 billion over the past six years through unrestricted gifts to a wide range of organizations, including historically black colleges and universities, diversity initiatives and disaster relief groups.Stevens believes that Scott’s approach has influenced broader discussions about philanthropy. “It’s just a model of trust-based philanthropy,” Stevens said. “[It’s] I really lean into that partnership with the community in terms of learning from those communities and listening to them and creating with them, rather than coming up with some pre-determined solution.”
Women are expected to influence the future of giving
The transfer of wealth would also change who has decision-making power within many of the world’s richest families.
According to projections mentioned in the Milken Institute report, women are expected to inherit about $47 trillion by 2048, which represents about 56% of all inherited wealth worldwide.Stevens believes the shift could strengthen an approach that has already gained momentum, with more philanthropists working alongside communities rather than directing projects remotely. She suggested that the focus is increasingly on listening first and developing solutions with local organizations rather than assuming that donors already know the best course of action.
Lorenz’s views on philanthropy are rooted in her family history.
She is the granddaughter of George Mitchell, the oil and real estate tycoon whose company, Mitchell Energy and Development, reportedly appeared on the Fortune 1000 list before it was acquired by Devon Energy for $3.1 billion in 2001.After graduating from Davidson College in North Carolina, Lorenz spent some time in Nicaragua before living for about six years in Oaxaca, Mexico. During that time, she created a non-profit organization serving rural Indigenous communities.Those years changed the way she thought about philanthropy.
