As we look to the future of philanthropy in 2025, the landscape is evolving in exciting and meaningful ways. With innovative funding methods, shifting generational preferences, and a growing focus on impact, we’re seeing new opportunities for donors to give smarter and with greater flexibility.
Here are four key trends to keep an eye on:
1. Funding creativity: Non-traditional assets
We have seen creativity in funding donor-advised funds with non-traditional assets like real estate, cryptocurrency, private equity, and passion assets. This innovative approach allows donors to leverage a wider array of resources for giving, unlocking new possibilities for philanthropy that allow them to tap into tax efficiencies and make a bigger impact. It’s an exciting evolution in how we think about giving!
For financial advisors, stay informed about these innovative approaches to giving. It’s a chance to help clients make the most of their resources while amplifying their charitable contributions.
2. Private foundation conversions: A generational shift
We expect to see more private foundations convert to DAFs due to practical factors like cost savings, convenience, and easier administration as well as generational factors. Younger donors are increasingly drawn to the flexibility and simplicity that DAFs offer compared to the rigid structure of private foundations. This shift not only reduces the administrative burden on families but also helps them align their philanthropy with evolving values across generations.
For financial advisors, understanding this transition and its benefits is key to providing strategic guidance to clients looking to streamline their giving.
3. Impact investments: Amplifying philanthropic efforts
Many donors are utilizing impact investments as a powerful way to drive even greater impact. By channeling funds into investments that generate both financial returns and positive social or environmental outcomes, donors can align their giving with their values in a more sustainable way. This strategy allows funds to grow while also contributing to meaningful change, creating a lasting impact that goes beyond traditional grants. It’s an exciting way to amplify philanthropic efforts and make a real difference.
For financial advisors, this is an opportunity to help clients invest in ways that grow their assets and support causes that matter to them, ensuring that philanthropic efforts create a lasting, measurable impact.
4. Charitable trusts on the rise: Legacy giving
Another noteworthy trend is the rise in popularity of charitable remainder trusts (CRTs). These trusts offer donors a unique way to support causes they care about while also securing future financial benefits. With CRTs, individuals receive income for a set period, with the remaining assets going to charity. This option is particularly attractive for individuals wanting to create a lasting legacy while enjoying immediate tax deductions and income stream benefits.
For financial advisors, be prepared to offer guidance on how CRTs work and how they can benefit clients looking to create a lasting legacy.
