Reflections on “third wave” philanthropy and a new generation of tech wealth
IPOs of the AI rivals are on the horizon and tens of billions in new philanthropic dollars are about to go looking for a cause. Will it overlook the people already doing the work?
Imagine being one of the lucky few OpenAI employees.
You joined early so your stock is fully vested. Pre-IPO shares are usually locked up until the company goes public, but OpenAI is letting you cash out some chips in a tender offer.
Maybe you’re one of the 75 individuals who did this last October and walked away with the full $30M, or one of the 600 who sold some portion of your shares. Maybe you’re considering what to do with those remaining shares with an IPO on the horizon.
This is more money than you can wrap your head around and you have vague intentions to do something good with your new wealth. Climate tech has always been interesting, but your friends are all talking about A.I. threatening humanity. What’s more important? You remember that your favorite teacher has a foundation back in your hometown supporting local entrepreneurs. Your tax advisor suggests you allocate some portion of your earnings or donate appreciated shares to a charitable entity this year to offset your taxes.
The clock is ticking. Where do you start?
There will likely be thousands of multi-millionaires minted by this IPO who plan to give back in some capacity but don’t yet know how. They’ll get no shortage of advice.
Most of it sounds like think bigger, move fast, and fund the best people who can execute. I don’t necessarily disagree, but urge caution that it doesn’t overlook the people who’ve spent their lives shifting systems of inequity that don’t move at the pace of a new app, but at the pace of policy change, political power, movements, and creative financing.
This essay is the first of a series exploring audacious approaches for new donors. It considers what influences from tech and venture capital may be helpful or harmful when translated into philanthropic strategies.
Nan Ransohoff recently argued that a “third wave” of American philanthropy is coming. With imminent IPOs of the two AI rivals, an exit for OpenAI Foundation and Anthropic’s employees could generate $37B - $100B in new philanthropic funding—on the higher end, roughly one sixth of total annual philanthropic spending in the U.S.
This is all speculative. While OpenAI Foundation would be required to pay out 5% annually as a private foundation, who knows if pre-IPO charitable pledges from founders and employees will be honored (Anthropic’s founders have pledged 80% of their wealth). Or how much will simply be siphoned off into donor advised funds.
Still, even conservative estimates suggest a tidal wave of philanthropic capital, and as one blogger writes, the vultures are looking for easy ways to access it.
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What is most likely to happen to all this new tech philanthropy?
Most dollars will flow into donor advised funds, common tools for parking charitable capital and solving tax problems for stockholders. Far too many words have been written about the problem with DAFs, so I’ll be brief. There’s nothing inherently wrong with DAFs,1 but far more dollars flow in to these vehicles than get granted out. 11 of the top 20 charities in the country are now DAFs.
In 2024, the five largest sponsors brought in $51B, and by some estimates, another $12B - 32B could flow into DAFs from this windfall alone. DAFs are famously opaque and slow-moving, but platforms like Impact Charitable are excellent options for donors who want to actually move money alongside others doing the same.
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What causes will get the most attention?
It’s natural that people direct their giving to causes they care about. Considering these funders have been shaped by years of working on artificial intelligence in a bubble of other founders and investors doing the same, their philanthropy is expected to flow into AI safety at record amounts to safeguard the algorithms they’ve unleashed.
As was the case with the last wave of tech giving in the 2010s, it will likely be directed at causes supported by effective altruists and “thesis-driven” philanthropy, a model of giving based on clear articulation of an ambitious goal and clear aims to accomplish it. These donors will seek out tech-caliber execution in new grantees.
Star talent will almost certainly be overlooked among nonprofit leaders, organizers, policy strategists, impact investors, and philanthropic execs. The people with battle scars accumulated from the slow work of shifting entire systems of inequity. People with personal experience of these problems.
Venture capital is the engine of tech that birthed these tech giants and the winners of the AI race. Given the perceived success of this system, it will certainly influence how these new donors will think about picking winners and losers.
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There is a culture in tech that suggests solving big problems requires speed and audacity. Most Americans want this; for our taxes to be as simple as ordering from Amazon, and for the bus to come as quickly as Uber.
There’s merit to this. But let’s not scrap the system, disavow all “legacy” philanthropy and nonprofits, or build from first principles as if it’s never been tried. Big wins in tech have always come with externalities; costs shifted to the public like muddy water or higher energy costs caused by a nearby data centers. It’s harder to work in this way when these are precisely the problems donors aim to solve.
Speed can have disastrous consequences. Consider Mark Zuckerberg’s $100M plan to rebuild Newark schools, a widely-publicized initiative that failed to improve outcomes and caused significant community turmoil. Members of the community first learned about this investment on Oprah, then were largely left out of a plan that relied on expensive consultants and “business-style” management (sounds a lot like “tech-caliber execution”).
Patience has its virtue, and despite my grievances with institutional philanthropy, when it works, it works. The Gates Foundation has contributed to saving 82M lives through its support of Gavi, the Vaccine Alliance and the Global Fund to Fight AIDS, Tuberculosis and Malaria. Big bet philanthropy has also been a driving force behind other society-shaping wins in the U.S., from establishing 911 services to marriage equality, CPR training, Sesame Street, smoking cessation, and more.
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Are we in short supply of philanthropic startups? Ransohoff suggests this in her essay, and it’s a popular idea that the right institutions don’t exist.
She gives examples of the few organizations that will attract the eye of these donors—Arc Institute, the Institute for Progress, Coefficient Giving—thesis-driven think tanks and funders that pride themselves on using evidence and reason to find the most efficient ways to solve problems, otherwise known as effective altruism.
I see the appeal. If the choice is between Org A, a scrappy group of housing advocates that has spent years mobilizing the neighborhood around a new community land trust, and Org B, a multi-billion dollar foundation that has invested heavily in selecting causes that are “important, neglected and tractable,” or chasing high-risk, high-reward solutions that can change entire systems, I understand why Org B is the seductive choice. For what it’s worth, these new donors are more likely to know people working at places like Org B given shared networks and social ties.
But underneath that choice sit assumptions worth challenging: that the group of housing advocates isn’t sufficiently entrepreneurial or can’t absorb the capital which is code for “can’t manage it effectively.”
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History suggests this isn’t true. The people a funder today might screen out as too small, high-risk, or too political have instigated some of the most consequential wins of the last century.
Consider the American Fund for Public Service, which bankrolled an astonishing run of causes in the early 1900s: the NAACP and its anti-lynching campaign, Du Bois’s anti-segregation work, rural electrification, Margaret Sanger’s birth-control advocacy, major labor strikes. It spent roughly $67,000 on its own operations across a decade, because it was governed not entirely by professional staff, but by leaders it supported, among them W.E.B. Du Bois and Upton Sinclair. Do we have enough funders who are bold enough to do things like this in 2026?
Overlooking the scrappy housing group described above could have meant no Champlain Housing Trust, the community land trust in Northern Vermont that now holds 3,000 affordable properties for residents. Kickstarted by a modest $200k grant from the City of Burlington (under then-mayor Bernie Sanders), it’s become a beacon for the growing CLT movement, built on a model pioneered by black farmers in the South to keep land affordable.
It also required significant organizing: residents mobilizing around the vision and the work to stitch together myriad sources of capital such as low-interest loans from church groups and a credit line from the retirement system.
Now imagine CLTs were as widespread and familiar as the 30-year mortgage.
Before Roosevelt signed the National Housing Act in 1934, most loans were short-term, hard to get, and triggered mass foreclosure when the economy collapsed. Once the Federal Housing Administration began insuring mortgages, banks offered more accessible rates and longer repayment periods. Home ownership in the U.S. climbed dramatically.
The comparison isn’t perfect, but my point is that the 30-year mortgage is now such a common path to homeownership that we can’t imagine life without it. Imagine if legislation incentivizing CLTs—like New York’s Community Opportunity to Purchase Act, another byproduct of those scrappy community groups—scaled nationally.2
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How could our new donor make a big bet on housing affordability?
First, by remembering that all of these efforts—organizing neighbors, mobilizing legislative support, assembling the capital—need financial backers.
Each individual piece of the puzzle looks small, but instead of making a single grant, you could make a larger contribution to a housing organization like New Economy Project or Grounded Solutions Network. When orgs like these are well funded, they can in turn make lots of little bets across their networks or portfolios of work. Kind of like how fund of funds’ leverage the niche expertise of the managers they invest in.
You could “co-invest” alongside institutions like Terner Labs who run a Housing Venture Lab and have already done the work of identifying great innovation. Or you could follow the lead of the oft-criticized foundations: just this week, Rockefeller announced $350M mobilized for Cleveland alone (including contributions from private donors) with a carveout for housing.
Or you could take a lower-touch approach and contribute to a pooled fund for DAF-holders like Unlock Ownership Fund, making it easy for donors who want to invest in funds that are creating paths to home and employee ownership. It’s okay to learn from others before you lead.
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I have no problem thinking about these bets like a venture capitalist if that feels more palatable. VC is built on the power law: meaning single outlier return outweighs a portfolio that is mostly failures.
But if we’re going to apply this principle to philanthropy, let’s do it fully. That would mean allocating irrational amounts of believe-in-you capital to entrepreneurs long before the evidence is in. Writing follow-on checks to what’s working. It means finding the “venture partners” who can help you navigate new territory, and recognizing direct experience with housing scarcity as subject matter expertise.
Most of all it means tolerating failure in philanthropic portfolios at the same rate it’s tolerated in tech.
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Whether these dollars flow into A.I. safety, as David Wallace-Wells projects in the New York Times, or heed Ross Douthat’s strange suggestion to spend them on beauty — things like statues and monuments that “only a cultivated taste can shape” — it’s easy to wonder why a few individuals set the agenda.
Philanthropy is notoriously undemocratic, though it doesn’t have to be that way. What rebuilds trust is ceding control, collaborating, and helping others build power. That might mean helping communities take back ownership of their neighborhoods to preserve affordability, or claim a stake in the data centers going up in their backyards.
Candidly, I know so many uniquely talented individuals leading ambitious nonprofits, running social enterprises, working with city governments, or making innovative impact investments. People that would do big things if someone took a bet on them at the right time.
I’ve seen what it looks like for impact funds to barely scrape by, managers who take out a second mortgage on their home, only to have a funder step in with an operating grant at the last minute (raising a fund without personal wealth is a steep challenge). We don’t see that the manager who made it to fund II, a hot commodity, the fund everyone wants to be in, was dangerously close to failure. That if not for that one person, in that one foundation, who took the time to understand GP finance for an emerging fund and advocate for that program, so many funds would not exist. These small bets matter.
None of this is straightforward. The way forward asks for a strange mix of patience and humility held together with speed and ambition. This wealth has already reshaped the world, who will be given the chance to decide how it is used next?
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Thanks to Sarah Seaborn Freeman, Lauren Paul, and Franklin Mora for their contributions to this essay.
This argument doesn’t apply to DAF platforms that have buckled under political pressure. Fidelity Charitable, Vanguard Charitable and DAFgiving360 (Schwab’s affiliated DAF) announced they would no longer honor donor grant recommendations to the Southern Poverty Law Center because of the Justice Department’s indictment claiming that SPLC’s payments to informants observing hate groups equated to money-laundering.
The Community Opportunity to Purchase Act, or COPA, was passed by NYC’s City Council in 2025 and has been publicly supported by Mayor Mamdani.