Philanthropy is being transformed: New approaches to effective giving

Profound change is unfolding across the philanthropy landscape, much of it driven by three converging forces:

• The meteoric rise of artificial intelligence (AI) and other digital tools
• Growing donor willingness to embrace innovative new strategies to tackle complex social and environmental issues
• The transfer of $124 trillion in generational wealth over the next 20 years—and the evolution away from more traditional views of philanthropy to those of younger generations

As a result, the sector has begun to respond to urgent challenges with greater flexibility, collaboration and purpose. Here’s what you need to know right now:

Adopt AI, but govern it closely

The AI starting point for most nonprofits—as well as for donors and foundations—is to use the technology to improve research, streamline operations, handle day-to-day communications tasks and speed grantmaking workflow. Even at this early stage of adoption, we see AI fundamentally changing the way donors give and manage philanthropic activities.

Indeed, in a 2025 survey of more than 600 social sector leaders, The Center for Effective Philanthropy (CEP) found 78% of nonprofits and foundations are using AI tools for internal productivity. Organization leaders noted, “AI has been helpful for drafting emails, policies, procedures, meeting summaries and other documents.” Additionally, many foundations are using AI to help simplify the granting process.¹

As an example: One family foundation has used its resources to develop a free AI-powered tool for grantmakers that streamlines the financial due diligence process—a typically resource-and time-intensive task.

Using AI, the tool analyzes a grant-seeking organization’s financial records, including audited statements, and generates a scorecard and summary based on criteria selected by the grantmaker—e.g., the financial metrics most relevant to their assessment priorities. At the same time, the tool makes it easy for the nonprofit seeking funding to submit financial documents, ultimately benefiting all parties involved.

Greater efficiency—and shared concerns

Foundations and nonprofits using AI in day-to-day workflow share a common set of concerns related to security, data accuracy, staff expertise and built-in bias, according to the CEP survey. Specifically, a majority of philanthropy leaders polled were concerned about:

• Misinformation/inaccurate results
• Data security and privacy
• Lack of staff expertise/capacity to learn about AI
• Uncertainty about how best to use AI
• Bias/discrimination in AI algorithms

While foundations are leveraging AI in their own operations, few have put guardrails in place to ensure stakeholder trust isn’t eroded: A 2024 survey by the Technology Association of Grantmakers (TAG) showed only 30% of foundations have established policies for using AI, and less than 10% have advisory groups addressing both AI technology and policy.²

A further sign of AI mistrust within the sector: Just 10% of U.S. funders accept grant applications containing AI-generated material, according to 2024 research conducted by Candid, a leading source of data on the nonprofit sector.³

Donors, too, have multiple concerns about AI, with the potential for data security and privacy risks at the top of their list. Also worrying them: the potential for misinformation or inaccurate results and uncertainty about the best ways to use AI.⁴

To counter these concerns, many donors are supporting initiatives that prioritize safe, equitable and ethical AI development. One such effort is being led by Humanity AI. This five-year, $500 million collaborative grantmaking fund was launched in 2025 by a coalition of philanthropic foundations that support the arts, labor and work, democracy, education and personal safety and security amidst AI advancements. This new organization is committed to putting people and the planet at the center of AI development by ensuring communities have a say in AI design, development, deployment and governance.

Specifically, it prioritizes creating an economy where AI enhances rather than replaces workers; holds AI builders to high safety standards; and protects human creativity and artists' work from theft.⁵

As AI continues to advance, its role in philanthropy will only expand. Balancing innovation with oversight will be key to ensuring AI serves the greater good in the philanthropic sector.

Multiple giving vehicles help donors address complex needs

Increasingly, donors are moving beyond traditional avenues of giving, such as private foundations, to achieve complex social and environmental impact goals. This more holistic approach uses a mix of charitable vehicles to maximize impact, including 501(c)(4) social welfare organizations, limited liability corporations (LLCs), private operating foundations and, most notably, donor-advised funds (DAFs).

Each vehicle serves a unique purpose and, when used in tandem, affords donors greater flexibility, and expands the range of causes and organizations they support. For example:

• 501(c)(4)s allow donors to engage in advocacy and lobbying, though contributions to these entities are not tax-deductible
• LLCs are flexible, pass-through entities that can be used to contribute to any charitable vehicle or initiative a donor chooses
• Private operating foundations primarily run their own charitable programs or provide services to a targeted community—in effect, acting like a hybrid of a public charity and private foundation

DAFs take center stage

A standout among giving vehicles, these charitable giving accounts allow donors to:

• Make irrevocable contributions and receive an immediate tax deduction
• Recommend which charities should be granted donations over time
• Centralize their charitable giving in one place
• Cede day-to-day operating tasks, such as recordkeeping and vetting charities, to the fund sponsor, generally a public charity 

DAFs have experienced remarkable growth in recent years, with the number of donor accounts reaching 3.59 million and contributions topping $90 billion, the largest annual totals to date, according to updated figures in the DAF Research Collaborative’s Spring 2026 report.⁶

As a result, DAFs now account for 15.1% of all charitable giving and 22.8% of individual giving, underscoring their rising popularity among donors who want efficient impact with their philanthropy.⁷

Growing usage of these vehicles by individuals and families is confirmed by recent data from J.P. Morgan’s own DAF program, the J.P. Morgan Charitable Giving Fund (CGF):  

• Active participation by a broad range of donors, including those with both large and smaller accounts
• A rise in the number of donors contributing non-cash assets, such as appreciated securities and cryptocurrency—which is helping unlock new sources of charitable capital
• Growing adoption of flexible giving strategies, with more donors making unrestricted and recurring grants: In 2025, 60% of donors’ total grants supported a charity’s general operating needs, up from just over a quarter of grants in 2015
• An upturn in grant activity, with one in every 10 grants today involving repeat funding

DAFs: The backbone of family engagement

Donor-advised accounts are also gaining ground with families, particularly as a vehicle to engage younger generations in charitable giving. These funds streamline digital processes facilitate new donors easily identifying and lending support to passion projects and causes.

Further, overseeing a smaller DAF account can serve as a succession planning strategy, allowing children and grandchildren to gain hands-on philanthropic experience before they assume leadership roles in a family foundation.

This knowledge and stewardship experience will be critical as an estimated $124 trillion will transfer between generations by 2048, with $18 trillion anticipated to go to charity.⁸

Finally, DAFs effectively facilitate donor partnership through collaborative funds by pooling resources and sharing risk among donors to maximize impact. Such partnerships also create opportunities to learn from peers, broaden perspectives and raise the profile of important issues. All of which can be enticing to both younger and/or less  experienced donors.

A growing role for time-limited philanthropy

While traditional multigenerational (i.e., perpetual) private foundations remain a dominant vehicle for philanthropy, a growing number of donors are embracing time-limited philanthropy.

This giving while living ethos, which prioritizes deploying charitable capital within a set timeframe, is gaining significant donor interest. 

Recent examples run the gamut from a mid-size family foundation recently established with the intention to spend out in 10 years, to the very public announcement of the Gates Foundation to sunset in 2045.

More anecdotally, time-limited philanthropy has become a frequently queried topic for J.P. Morgan Philanthropy Advisors, as donors evaluate the trade-off of impact during lifetime or future impact.

Meanwhile, research by the National Center for Family Philanthropy also reveals growing donor interest in time-limited family foundations: Historically, few entities founded before the 1990s considered a spend-down model. However, in the last five years, the number of U.S. family foundations with pre-determined lifespans has increased from 9% to 13%, and more than 28% of those surveyed are considering such a move.⁹

This shift to increased giving during one’s lifetime reflects the growing desire among philanthropists to witness firsthand the impact of their giving and to respond swiftly to urgent social and environmental needs. Though, in some cases, interest can also be attributed to donors recognizing that family foundation succession plans are not always viable; for example, if younger generations have different philanthropic interests or prefer to deploy charitable capital in alternative ways.

Conclusion

As more families, individuals and boards institute a spend-down model, embrace new tools and technologies, and prioritize impact now over legacy later, the template for successfully stewarding charitable capital will become ever-more nuanced, and innovative.

J.P. Morgan Private Bank is committed to helping you enhance your philanthropic impact by offering advice, thought leadership and learning opportunities. To learn more, we encourage you to contact your J.P. Morgan team.