Giving while living: the power and the peril for wealthy families

Wealthy families are increasingly embracing the idea that giving need not wait until death. Motivated by a desire to witness the results of their generosity, define their legacy and involve the next generation, many are choosing to give while they are still alive. This shift brings personal fulfilment, but also new risks.

Few figures embody this trend more than Bill Gates. The Microsoft co-founder, and one of the creators of the Giving Pledge, recently gave away $51bn in a matter of days, reducing his net worth by nearly 30 per cent. His vow “not to die rich” speaks to a wider movement among ultra-high net worth individuals who see philanthropy as a living legacy, not a final act.

While the sentiment of “not dying rich” is gaining traction, motivations typically run much deeper. For many, giving is driven by a belief that heirs will receive enough, by a passion for specific causes, and by a desire to see the results.

Accelerating donations offers income tax advantages and allows donors to monitor how their money is used. “You can ensure the funds are being spent wisely, in line with your intentions, and that the organisations are being good stewards,” says Cheri Stein, senior trust officer and partner at US-based advisory firm Plante Moran Wealth Management

Large-scale lifetime giving requires a highly structured approach. Without proper oversight, gifts can burden rather than benefit recipient organisations. “It’s not just as simple as writing a cheque,” warns Ms Stein. “A large cheque can probably be more harmful than good if not done appropriately.”

She cites a client planning to divide her estate among five charities, one of which brings in just $10,000 a year but stands to receive $20m. “They can’t handle that, so we’re working to make changes,” she explains.

Recent cuts to US government foreign aid, along with broader funding uncertainties for nonprofits, have added urgency. In some cases, families step in to stabilise struggling organisations, but she stresses the importance of being realistic about the impact. “We need to be sure our contribution would help, not just fill a short-term gap,” she says, recalling a case involving a large grant to a charity in crisis.

Communication frustration

Poor communication around philanthropy can strain family ties. When parents begin directing wealth to charity later in life, especially as their health declines, heirs may grow uneasy.

“That’s often when children start pushing back,” says Ms Stein. “They realise their parents’ health is failing, the estate is going to charity, so they get more involved in the finances. Unfortunately, I’ve seen children pressure parents to make changes, when they are at their most vulnerable.”

Proactive planning and transparency are key, agrees Nicole Jackson-Leslie, senior wealth planner at Brown Brothers Harriman.

“Children often assume the worst. Sometimes they worry their parents may not have thought thoroughly enough about their gifts and might not have enough money to sustain their lifestyle through retirement,” she says.

Family values

Early engagement can be particularly effective. Through donor-advised funds or family foundations, younger family members can research causes, debate priorities and learn how to evaluate organisations.

“I’ve seen families offer a $1,000 grant and ask each grandchild to find a cause they’re passionate about — whether it’s breast cancer research or the local animal shelter,” says Plante Moran’s Ms Stein. “It helps them connect to the values behind the giving and even research what that organisation is doing.”

Philanthropy can also align with business identity, with many families now linking corporate giving strategies to their philanthropic efforts, says Caroline Hodkinson, head of philanthropy and family governance advisory at multi-family office Bessemer Trust.

“Younger generations are increasingly seeking alignment between family foundations and business missions by partnering with grantee organisations that represent not only values of the family, but also that of the business,” she says.

Some families create multigenerational grant-making committees, to bring younger members together around shared goals and values. “These forums can be incredibly effective, but what’s most important is having self-identified leaders, those who raise their hand and say, ‘I want to lead this.’ That’s when these programmes really take off and flourish.”

Philanthropy can also strengthen ties with employees and local communities. “Families with operating businesses see philanthropy as a powerful tool to support employee engagement and the impact they can have on those local communities where they have operations,” says Ms Hodkinson.

During the Los Angeles wildfires earlier in 2025, many families actively sought ways to contribute to relief efforts, while local businesses launched “shop for a cause” campaigns, blending charitable intent with brand engagement.

Spending down

Over the past decade, more first generation founders and families have been choosing to “spend down” their philanthropic capital — driven by a desire to make a more meaningful impact on urgent issues like rare disease research or climate change.

This strategy has accelerated as public funding becomes less reliable, observes Ms Hodkinson. “As of now, it’s still too soon to know how many may need to shut down, merge, or radically restructure. For us, this means continuing to help educate our clients and be a resource as the landscape evolves.” Families are responding by giving earlier: “We’re seeing more clients leaning more heavily into giving sooner,” she suggests.

However, she warns against rushing the process. “Spending down within five, seven years is often just not a feasible timeframe. For large-scale giving, identifying nonprofits with the capacity to absorb eight-figure gifts is a challenge.” A 10- to 15-year horizon, she says, often proves more sustainable and realistic.

Lowering anxiety

Recent US legislation — dubbed the ‘One Big Beautiful Bill’ and signed into law under Donald Trump — has permanently increased the federal estate and gift tax exemption to $15m per individual, and $30m per couple, beginning January 2026.  By removing the year-end deadline, the change has relieved pressure on families scrambling to make transfers before year-end.

“That pressure has been alleviated,” says BBH’s Ms Jackson-Leslie. “But clients are still certainly wanting to use this increased exemption.”

The impact on giving is mixed. “The more you can transfer tax-free to family, the fewer dollars may go to charity,” she explains. Even so, she stresses that most clients are not motivated by tax alone. “They have serious charitable goals.”

Choosing the right structure remains critical. Donor-advised funds offer flexibility, while trusts support longer-term wealth transfers. But legal frameworks require communication. “We like to say that setting up a trust is just the beginning. It’s essential to explain who’s affected, and why,” suggests Ms Jackson-Leslie.

She advises using tools like non-binding letters of wishes and keeping governance provisions flexible, for example, allowing trustee changes. But legal architecture alone is not enough.

The rush to use tax exemptions can lead to short-sighted decisions, locking families into rigid structures that can limit future generations.

“Families read the headlines and rush to use their $15m exemption, setting up irrevocable trusts without thinking through management or family impact,” she says. “But without proper planning, it can fall apart in generation two or three. Beneficiaries may not understand the purpose or feel comfortable asking for distributions.”

Her team advocates gradual, age-appropriate engagement: starting with basic financial education and introducing more complex concepts over time.

“It’s about getting families comfortable talking about money, starting small and building over time. You don’t need to share the whole balance sheet, but giving context helps lower anxiety.”

Done thoughtfully, lifetime giving can be a powerful force, for both the causes people support and their families.

“It allows you to help children when it matters, with education, home-buying, or launching a business,” says Ms Jackson-Leslie. “And you get to see the impact. It’s also a good way to test how a beneficiary handles wealth, and help them build a relationship with advisers, which pays off down the road.”

Ultimately, giving while living is more than a financial strategy. It is a deeply personal act of legacy-shaping. “What matters most,” she says, “is helping families give with purpose and with joy.”