The coming decades will see an unprecedented transfer of private wealth from one generation to the next. Projections suggest that nearly $124 trillion will be inherited by 2048, as Fortune reported, which would be one of the largest financial shifts in recent history. While much of the discussion has focused on family fortunes and succession planning, attention is increasingly turning to what this change could mean for philanthropy. Wealth inequality has become a much more visible issue than it was a generation ago, and expectations around charitable giving have changed along with it. Younger heirs are entering conversations that once belonged almost entirely to their parents and grandparents, bringing different priorities and a greater willingness to question established practices. In many wealthy families, philanthropy is no longer just about preserving a legacy. Rather than identifying primarily as donors, many see themselves as participants in broader efforts to support lasting social change.This change is not limited to the timing of charitable donations. Young philanthropists are also playing their roles differently from previous generations.
How young heirs are redefining philanthropy
The Milken Institute believes that philanthropy is entering a period of significant change as younger family members become more involved in decisions regarding inherited wealth. Rather than accepting existing structures, many are questioning whether traditional models can still keep up with the pace and scale of today’s social and economic challenges.Melissa Stevens, executive vice president of the Milken Institute Strategic Philanthropy and co-author of the report, said increased public attention to inequality has changed the expectations of wealthy families.“Wealth disparities have never been greater than they are now, and we have our sights set on the rich. It’s raised the stakes.”The report shows that pressure is coming from many directions. Public scrutiny of billionaires’ wealth has increased in recent years, while younger generations are also examining whether family foundations and charitable commitments are growing quickly enough to address urgent issues.
Why are young heirs increasingly urged to make charitable donations?
For years, many of the world’s richest families have viewed philanthropy as a long-term responsibility, often planning charitable distributions over several decades. Initiatives such as the Giving Pledge encouraged billionaires to dedicate the majority of their wealth to charitable causes, although these commitments rarely came with specific timelines.However, inside some of those families, young heirs are encouraging a different approach. Katherine Lorenz, who leads the group Giving Pledge Next Gen, said she has seen younger relatives encouraged to start distributing more of their assets to older family members rather than delaying larger donations.“I see more of the younger generation putting pressure on their parents to give more,” Lorenz, as reported by Fortune. “(They’re saying), ‘You made enough money, Mom and Dad, it’s time to give it away and give it away fast.'”“Many of them are ready to deploy capital quickly. Sometimes the barrier is the older generation.”
Why is faith-based philanthropy gaining momentum?
Lorenz believes that many young philanthropists are asking different questions before deciding where to put their money. While immediate assistance remains important, there is growing interest in understanding the conditions that create social problems in the first place. Using housing as an example, he explained that helping those in immediate need is only part of the challenge.“Why do we have so many homeless people? What’s happening, and how come we have less people in this situation?” Another area where attitudes are changing involves the relationship between donors and organizations receiving funds. Rather than imposing broad restrictions on grants, some philanthropies have begun to provide unrestricted financial aid, allowing recipient organizations to decide how the funds should be used based on local priorities and experience.MacKenzie Scott has become one of the most prominent examples of that 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 Scott’s approach has influenced broader discussions about philanthropy. “He’s an example of faith-based philanthropy,” Stevens said. “(It’s) really leaning into partnership with the community in terms of learning from those communities, listening and building with them, rather than coming up with a predetermined solution.”
Women are expected to influence the future of charity
The transfer of wealth would also change who has decision-making power among many of the world’s wealthiest families. According to estimates cited in the Milken Institute report, women are expected to inherit approximately $47 trillion by 2048, which is about 56% of inherited wealth worldwide.Stevens believes the change could reinforce approaches that are already gaining momentum, with more philanthropists working with communities rather than directing projects from afar. He suggested that the emphasis be on first listening 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 his own family history. She is the granddaughter of oil and property entrepreneur George Mitchell, whose company, Mitchell Energy & Development Corp., reportedly made the Fortune 1000 list before being acquired by Devon Energy Corp. for $3.1 billion in 2001.After graduating from Davidson College in North Carolina, Lorenz spent time in Nicaragua before living in Oaxaca, Mexico for nearly six years. During that period, he founded a non-profit organization to serve rural indigenous communities.Those years changed the way he thought about charitable work.