How AI Could Transform Philanthropy and Planned Giving
I came of age during the Vietnam War. As tumultuous as that time was, I can’t think of a single decade of my adult life when we weren’t dealing with a major crisis or technological disruption that threatened our sense of well-being. However, I always take the utopian rather than the dystopian point of view because, as a global society, we’re pretty good at preventing these forces from destroying us.
History shows we usually come out of periods of creative destruction, the Industrial Revolution, Cold War, Internet revolution or even COVID-19, stronger and better than before. There’s no reason that the emergence of artificial intelligence should end any differently. And while some jobs and industries will be displaced, new ones will emerge that never existed before. I’m already seeing highly paid jobs for artificial intelligence supervisors and prompt optimizers. Young math geniuses are being hired right out of school with seven-figure starting salaries.
Maybe what’s different about the AI wave is the pace and scale of how fast it’s moving. It’s like the Industrial Revolution times five.
As Bill Gates mentioned in his Gates Foundation Report, “Advances in technology are happening faster than ever, especially with artificial intelligence on the rise. Even with all the challenges that the world faces, I’m optimistic about our ability to make progress.” Gates added that we have an opportunity to shape the use of AI to benefit people and society at a critical time.
Futurist Peter Diamandis suggests that nonprofit entities like the OpenAI Foundation are evolving into massive philanthropic war chests worth over $100 billion. He foresees a future in which AI-backed philanthropic capital shifts from traditional late-life charity to funding economic restructuring, universal basic income and global abundance.
Elon Musk is generally critical of our current philanthropic system and high-profile donors who throw vast sums of money at society’s greatest problems. Instead, he feels we should ignore the faults of the current system of philanthropy and instead, invent our way out of it so we can improve life on a grand scale. Musk envisions a near future in which AI superintelligence and other technological advances will enable us to cure all diseases, end hunger and eliminate poverty. In fact, he predicts that we might not need money by 2036 because the price of basic goods and services will have fallen so much.
Musk is perhaps the most outspoken among billionaires on the idea that “philanthropy is hard.” Rather than throwing money at societal challenges, he argues that we should leverage technology to improve the world from the inside out to create vast wealth for everybody.
“The biggest challenge I find with my foundation is trying to give money away in a way that is truly beneficial to people,” Musk said on the People by WTF podcast. He added that it’s easy to give money away “to get the appearance of goodness,” but it’s much harder to reach the “reality of goodness.” Musk said he and his foundation continually struggle to identify where large gifts can make a significant difference.
From where I sit, it seems that if we ever get to the point of universal high income or universal basic services that Diamandis, Musk and others refer to, we’ll have so much abundance that people won’t have to worry about anything. If we cure all diseases, solve every material science problem and have robots manufacturing everything, people won’t have to do jobs that they hate just to get by. It could be a golden age of creativity. People will have the freedom to pursue their passions rather than work to earn a living. Some people will sit on the couch and enjoy a life of leisure, but I know many will always want to be productive, keep improving themselves and be helpful to society.
So, where should our charitable dollars go if we won’t need charities?
What This Means for Advisors
For advisors having philanthropic conversations with their clients, it behooves them to build in as much flexibility as possible regarding the types of gifts their clients are considering. We still have capital gains tax, income tax deductions and all the other challenges of moving assets through our estate tax efficiently. But what if we’re left with no worthy causes because AI has solved everything? Can we really have these kinds of conversations with our clients?
While I usually discuss gifts with clients that will bear fruit in 10, 20 or 50 years, I have begun to question whether a generational time horizon is still wise. As advisors, it’s time for us to rethink everything. If nothing else, future client gifts should have multiple possible purposes and beneficiaries. How can we honor a gift to cancer research or childhood hunger, only to learn that AI has “found the cure” five years from now? How can I help fund a gift to a client’s alma mater when the institution might no longer be in existence?
Now more than ever, we must be alert, flexible and in constant contact with our clients. While the front-end structuring of our planned gifts may not change, our beneficial recipients are more than likely to change. It’s time for all of us to adapt. For instance, make sure the institutions your client plans to support offer ample flexibility and adaptability for future scenarios. The future is coming much faster than most of us are ready for. Why not take advantage of the benefits today? If AI is going to change everything around us, it’s not going to skip over philanthropy. Things will change, and we need to be prepared.
That would also help reverse the trend toward declining charitable giving for all but the ultra-wealthy.
Research shows that only two in five (41%) American households donated to charity in the most recent year measured. That’s down from two-thirds of American households who donated two decades ago. Among the well-off, who have always given more generously, charity has dropped sharply, too: Twice as many rich households as in 2015 now make no charitable donations, even though there’s been a huge increase in personal wealth during that time.
As advisors, we should re-imagine the future with a utopian perspective and begin having conversations with our clients about their future gifts. Don’t get stuck in the old paradigm of thinking about planned giving as you watch the future unfold before you. We’re faced with a tremendous challenge and an even greater opportunity. That’s where you come in.
