Christoph Courth, Global Head of Philanthropy Services at Pictet Wealth Management.
In 2024, Pictet conducted a research revealing that the rising generation sees their businesses as the most significant tool for driving change, surpassing traditional philanthropy. Through workshops with over 150 participants aged 18-25, all preparing for wealth stewardship, Pictet’s philanthropy team explored the concepts of impact and philanthropy. The findings indicate a potential shift in both focus and in the application of wealth towards impact-driven causes.
A full sphere of influence
When asked about the most powerful tools they had to to exert influence, 44% of participants felt they could best drive change through their businesses, 41% through investments, and only 25% through philanthropy. This reflects the younger generation’s view that traditional philanthropy has become outdated. Many participants didn’t identify with the title “philanthropist”, preferring terms like “activist”, “social entrepreneur”, “social investor”, or “change maker”.
A popular concept was the sphere of influence – a holistic approach to running businesses, managing investments, leveraging societal and industry positions, and strategically applying philanthropic capital. Participants felt that that traditional philanthropy often fails to address issues effectively, attempting to solve problems in isolation rather than contributing to long-term change within a broader ecosystem.
Shifts in focus
External research indicates that the primary interests of current global ultra-high-net-worth (UHNW) philanthropists are education, religion, healthcare, and arts and culture. Climate change and the natural world receive less than 2% of global philanthropic funding. However, the priorities of the rising generation invert this picture. For workshop participants, climate change and the natural world are top priorities, followed by inequality and conflict. Topics related to religion and arts/culture barely registered.
Changing motivations
Participants expressed a profound sense of responsibility to address social and environmental issues, fuelled by a general awareness – thanks to data, livestreamed images and stories – of global societal challenges. The emergence of organisations like Tax Me Now, Resource Generation, and Patriotic Millionaires underscores a desire for greater wealth distribution. Some participants felt discomfort over their multigenerational inheritance, as it was unearned or amassed through industries that conflicted with their values.
The desire for innovation
There is a growing demand for professionalisation and strategic review support among family foundations. This was reflected in a feeling from participants that previous generations had not used philanthropic capital effectively as they were hoping to do. While traditional grant-giving was acknowledged as remaining essential to certain causes and certain situations, there was a strong belief that philanthropy should act as a catalyst for innovation and new initiatives to drive systemic change, rather than providing short-term relief.
Participants expressed a desire for a more participatory approach, partnering with others who share common goals. Blended finance was highly-regarded – leveraging philanthropic capital to unlock the coffers of public and institutional capital and achieve sustainable outcomes.
There was acute awareness of the inherent power imbalances that have long characterised traditional philanthropic relationships. Participants referenced MacKenzie Scott, the co-founder of Amazon , as a pioneer in transforming the traditional dynamic through the trust-based model. This emphasises unrestricted, multi-year funding to allow nonprofits flexibility to allocate resources, rather than being confined to donor-imposed projects.
Impact investing is also gaining traction, with 86% of millennials interested, driven by a desire for hands-on involvement and a business-minded approach. But many admitted this would only account for a small portion of their portfolios, emphasising the need for Environmental, Social, and Governance (ESG) criteria in their broader investment strategies, particularly within family foundation assets, where many see mission alignment as an imperative social responsibility. Participants recognised the power of their own voices and their support for activists, but were also conscious of biases that their lived experiences might have on their decision-making.
As part of the projected USD84 trillion Great Wealth Transfer between now and 2045, an estimated USD12 trillion is expected to flow directly into philanthropy. The remaining USD72 trillion will be left to a generation more socially and environmentally active than its predecessors, but choosing different methods of effecting change. Christoph Courth, Global Head of Philanthropy Services at Pictet Wealth Management, states, “While the rising generation might not identify with the traditional image of philanthropists, their aspirations for impact align closely with the essence of the term. A consensus was clear: more conscientious wealth management and responsible stewardship is needed, with a focus not simply on growing wealth, but on applying it effectively to foster positive change. The future of giving is about creating a holistic and aligned approach across the sphere of influence, with a focus on building a resilient and regenerative economy, redesigning systems where businesses and investments play crucial roles”.
