{
  "id": 1037656,
  "title": "AI is creating a new wave of philanthropists. The system they’re walking into is broken",
  "url": "https://urgent.news/2026/08/15/ai-is-creating-a-new-wave-of-philanthropists-the-system-theyre",
  "topic": "ai",
  "section": "AI",
  "published": "2026-08-15T12:30:00.000Z",
  "source": {
    "name": "Fortune",
    "slug": "fortune",
    "url": "https://fortune.com/2026/08/15/ai-billionaires-philanthropy-broken/"
  },
  "original_language": "en",
  "account": "In the near future, a significant portion of individuals in the AI industry are projected to attain substantial wealth. Many of these individuals are contemplating the utilization of their newfound riches. The authors of this article advise some of the most philanthropically motivated tech professionals. These individuals genuinely aspire to effect meaningful change and possess the financial means to do so. However, the existing framework for generously allocating large sums of money is exacerbating the disparity between philanthropic intentions and actual actions. In 2010, several of the world's wealthiest people signed the Giving Pledge, a pledge to donate the majority of their fortunes to charitable causes. While this initiative was celebrated as a watershed moment for American philanthropy, a decade later, the follow-through remains underwhelming. The authors believe that the root cause extends beyond a single giving vehicle. The upcoming generation of philanthropists differs from their predecessors, yet they will encounter the same infrastructure and incentives. Upon gaining liquidity, the magnitude of the task and the complexity of the philanthropic landscape can be daunting. Legal counsel, financial advisors, and colleagues may offer conflicting opinions. Some would-be donors delay their philanthropic endeavors, while others grant their initial significant donation to the first organization presenting a compelling proposal. The prevailing infrastructure at this juncture is ill-equipped to assist donors in making more informed decisions. The most favored solution among these newly affluent philanthropists is to establish a donor-advised fund (DAF). The structure of a DAF is relatively straightforward: open an account, transfer pre-IPO equity before the tax deadline, claim the deduction, and defer the decision on how to allocate the funds to a later date. This later date could span from 12 months to 12 years or even remain indefinitely, and the system's incentives subtly promote the latter option. The establishment of a DAF appears to be the prudent course, but it also signifies joining a system that, despite its commendable intentions, harbors a significant structural flaw. As of now, over $300 billion in philanthropic capital is held in American DAF accounts. This figure alone is striking, but the more concerning metric is the rate at which the assets are disbursed: only approximately a quarter of DAF assets are distributed each year. A significant portion of these funds simply circulate between different DAFs without benefiting any beneficiaries, and there is no legal obligation to distribute any of the assets. In 2024, the top charitable fundraiser in the United States was not a hospital, a food bank, or an international relief organization. Instead, it was Fidelity Charitable, a DAF sponsor that received nearly $16 billion in contributions. Eleven of America's top twenty fundraising \"charities\" are DAF sponsors. While the money continues to flow into DAFs, it is not circulating effectively. Blaming individual donors or DAF providers is futile; they are merely acting in accordance with the incentives they face. DAF providers typically earn fees based on assets under management, not on assets deployed, so they have no financial incentive to facilitate the distribution of funds through grantmaking. Fidelity has generated over $1 billion in revenue from its charitable division over the past five years. The tax deduction is obtained upon contribution, and the tax benefit is secured, allowing the question of where the money ultimately goes to be deferred to a later time. The rules are distinct for private foundations. Foundations are mandated to distribute at least 5% of their assets annually, a requirement established to prevent charitable vehicles from becoming perpetual tax shelters. In contrast, DAFs face no such obligation. Proposed reforms have primarily targeted the dormant accounts that made tax deductions in the past but have remained inactive ever since. Meaningfully addressing this tail alone could unlock billions currently languishing. Congress established the tax break for DAFs with the assumption that the funds would eventually reach charitable organizations. The discrepancy between this assumption and the present situation speaks volumes. Nonprofit and philanthropic organizations also bear responsibility. The sector must simplify the identification of high-impact opportunities and expedite grant execution. This necessitates DAF providers that prioritize active grantmaking over asset accumulation, and independent evaluators who conduct rigorous assessments of where money yields the greatest impact across various domains. A new generation of philanthropists will soon make critical decisions regarding the allocation of significant wealth. The infrastructure they inherit, if left unchanged, will gently encourage them to delay their philanthropic activities. However, this outcome is not inevitable. The original agreement stipulated that society would forgo tax revenue in exchange for charities receiving the funds. This arrangement was never conceived as a mechanism for financial institutions to accumulate fees on tax-advantaged assets indefinitely. The current system fails to fulfill its intended purpose – it requires transformation.",
  "summary": "Sometime in the near future, a significant portion of the people building today's AI industry are expected to become very rich.",
  "key_points": [
    "AI industry poised for wealth accumulation among professionals",
    "Giving Pledge initiative underwhelming after 2010 signing",
    "Donor-advised funds hold $300B+ but disburse only 25% annually"
  ],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}