The philanthropic landscape is evolving faster than ever, influenced by a blend of emerging donor priorities and innovative funding models. Insights from the 2024 CAF U.K. Advisor Survey and the Charities Aid Foundation (CAF) and CAF America donor teams provide a lens into the shifting expectations of high-net-worth clients and their current philosophies when engaging with philanthropy. Here, we explore four key trends shaping the space and the conversations advisors are having with donors about their strategies, legacies, and long-term impact:
1. Trust-Based Philanthropy
A growing movement among funders is trust-based philanthropy, which is a model that emphasizes unrestricted funding and trust between donors and grantees. This approach reduces control, restrictions, and reporting requirements, reflecting a positive trend of donors trusting charities with more flexibility and agency to allocate resources effectively.
Co-founder of Amazon, American novelist, and high profile philanthropist Mackenzie Scott exemplifies this philosophy, inspiring nonprofits and philanthropists worldwide with her transformative, no-strings-attached donations to organizations she trusts. While these gifts require rigorous due diligence, they give recipients the opportunity to innovate and address local needs without donor-imposed constraints. For instance, one of our CAF Global Network partners in Brazil that received such funding, RACI, demonstrated its potential by deploying the resources in groundbreaking ways. This sophisticated approach to philanthropy removes donors from decision-making processes, prioritizing locally led program development and making sure funds directly benefit organizations and their communities.
2. Blended Finance and Impact Investing
Impact investing isn’t a new concept, but there are exciting innovations happening in how it’s being used. One trend we’re seeing is the blending of unrestricted grant funding with structured charitable financing, breaking down the traditional barriers between the financial and nonprofit worlds. As international development shifts away from purely grant-based approaches, many developing countries are opening their economies to new financial tools like program-related investments and recoverable grants. CAF America and CAF has been at the forefront of this, using philanthropic capital to support social investments.
What’s really interesting is how these models are evolving, with donors increasingly packaging grants, charitable loans, and financial investments into cohesive strategies, creating a balance between impact and financial returns. On top of that, charities are stepping up by offering donors financial tools that fit into their broader investment plans, speaking the same language as their more traditional financial advisors. It’s a fascinating trend that’s making impact investing more accessible and effective for everyone involved.
3. The Great Wealth Transfer and Next-Generation Philanthropists
The “Great Wealth Transfer” isn’t just reshaping wealth management, but is also transforming philanthropy as charities engage with a whole new generation of donors. With an estimated $84 trillion poised to transfer to younger generations, philanthropy is undergoing a seismic shift. One big takeaway? Next-gen philanthropists are much more impact-oriented and strategic in their giving. It’s no longer just about tax savings or basic financial planning; these donors want to have real conversations about how to maximize their impact and create meaningful change.
What’s exciting is that the barriers to having these conversations are lower than ever, making it easier to dive into these topics. But it also means advisors and nonprofits need to bring more skill and nuance to the table when working with younger donors – they’re asking bigger questions, and they’re ready for bigger solutions. Understanding what drives younger donors and knowing how to guide them effectively will be essential for building relationships with them and supporting their goals.
4. Sustainable Strategies for Lasting Impact
Donors today are more open than ever to systems-level thinking that tackles root causes and creates lasting solutions. This shift toward a more impact-driven approach has sparked a welcome focus on addressing problems in ways that make a difference for the long haul. When it comes to charitable legacy planning, the conversations go beyond just solving today’s issues — they’re about creating solutions that remain impactful over time. Even better, this mindset often inspires others to join in, bringing stakeholders together to ensure these long-term plans succeed. In fact, many donors see their role as part of a broader movement, aiming to recruit stakeholders and build coalitions that ensure the longevity of their initiatives. It’s about building something that lasts and keeps driving change for years to come.
Our donor advisors are seeing a rising demand for expertise in navigating these more nuanced conversations. For donor groups that lack the skills to handle them directly, specialists are stepping in to provide the necessary guidance. This collaboration lets advisors add value for their clients without having to offer every service themselves.
How We Support Advisors in Advanced Philanthropic Conversations
As donor expectations continue to evolve, financial advisors need continuing education to keep up. Many advisors are choosing to partner with specialists to navigate complex discussions around legacy planning, systemic change, and next-generation engagement. These collaborations enhance the value advisors provide, making sure their clients’ philanthropic goals are met with innovative and impactful strategies. CAF America frequently works with financial advisors to provide expert guidance on cross-border giving challenges, helping their clients navigate complex regulations, conduct due diligence, and maximize the impact of their philanthropic investments.
The philanthropic trends highlighted here are reshaping how donors and advisors approach giving. Whether it’s through unrestricted funding, blended finance models, engaging younger philanthropists, or driving systemic change, these shifts emphasize the importance of strategy, trust, and collaboration. As the sector continues to evolve, staying attuned to these trends will be crucial for advisors seeking to empower their clients to make a meaningful difference.
Learn more about how we support donors and financial advisor clients in reaching their philanthropic goals:
