Next generation driving force behind evolution of philanthropy in the Middle East

Philanthropy is a key focus of wealthy families across the Middle East with the younger generation interested in tackling root causes rather than symptoms.

Wealthy families in the Middle East are increasingly prioritising philanthropic topics, with Islamic principles being a key driver.

The construction of hospitals, research facilities in healthcare, and educational establishments is dominating the philanthropic space. From a sustainability and value-based approach, the next generation has been at the forefront.

Philanthropy is a key focus of wealthy families across the region. According to LGT Middle East’s ‘Wealth and Legacy: The Rise of Single Family Offices in MENA’ report, almost 60 per cent of families value philanthropy as an important function of the single family office.

“Philanthropy is deeply entrenched in the culture of the Middle East and practiced as a way of life,” says Mahesh Shahdadpuri, head of wealth planning and family advisory for Europe, the Middle East and Africa at Standard Chartered Bank. “Often, it is shaped by a mix of cultural, religious, and socio-economic factors that give it unique characteristics and trends.”

Religious influences are a key aspect of philanthropic activities in the Middle East. Both Zakat (mandatory alms giving) and Sadaqah (voluntary charity) play a role in shaping philanthropic activities, explains Dubai-based Mr Shahdadpuri. “The practice of establishing endowments – known as Waqf – for charitable purposes is deeply rooted in the region,” he adds.

These endowments support various social services like healthcare, education and infrastructure, among others.

With the region engulfed in devastating conflicts impacting millions of lives, focus on humanitarian aid is also high on the agenda. A “significant” portion of income is diverted to humanitarian assistance, says Mr Shahdadpuri.

“Philanthropy in the Middle East is evolving, influenced by traditional values and modern trends,” he says. “The region’s unique blend of religious obligations, response to socio-political challenges, and growing focus on sustainable development help shape its philanthropic landscape.”

Next Gen at the forefront

According to LGT Middle East’s report, close to 62 per cent of Middle Eastern families value cross-generational communication and next generation mentoring as important functions of the single-family office.

In the past, philanthropy was mainly a topic for older clients. The patriarch would typically decide on his own who to support and how to do it. The younger generation was either excluded or simply not interested.

But things are now changing, according to Ali Janoudi, head of new markets at Lombard Odier Group in Geneva. “Given the growing degree of involvement and autonomy of the younger generation in the family businesses, they have become much more engaged,” he says.

Younger generations currently occupy executive positions like chief executive or chief financial officer. In addition, they enjoy more exposure to philanthropy through events such as Lombard Odier’s Generation seminars. “We believe this is a positive game-changer for all involved,” says Mr Janoudi.

Reflecting on engagement with the next generation, Sebastian Goeres, senior executive officer at LGT Middle East – whose parent group has $350bn in assets under management – says: “The next generation is highly educated. They are asking questions such as: what do I want to achieve with the wealth I have? What are the areas I want to support to leave the world in a better shape in the future?”

Topics, such as impact investing, are higher on the agenda compared to earlier generations, says Mr Goeres. “We live in a very complex environment; there’s a lot of volatility. This has meant younger generations are thinking more holistically about philanthropic activities.”

The younger generation, according to Standard Chartered’s Mr Shahdadpuri, also prefers a more hands-on approach to philanthropy. “The younger donor is more interested in addressing root cause issues rather than just tackling symptoms or alleviating the impact,” he says. “They demand higher levels of transparency and accountability from organisations they support. They value open communication and regular updates, so they can track and see their contributions have been put to good use efficiently.”

They are also keener on ‘collaborative philanthropy’, partnering with donors, NGOs, and government entities, while leveraging technology in their philanthropic activities, says Mr Shahdadpuri. “These trends reflect the desire to make a difference with a modern, strategic, and impactful approach.”

Religious undertones

The Islamic faith plays a huge role in the daily lives of many Middle East citizens, around 85 per cent of whom are Muslims. This encourages wealthy families to adopt Islamic principles in all their activities, including philanthropy. According to the LGT report, more than 70 per cent of families factor religious principles into their investment strategies, emphasising the impact of faith-based values on financial deliberations.

The concept of charity is deep-rooted in Islam; in fact, it is one of the five pillars. The Qur'an – the Islamic holy book from which most teachings are derived – frequently emphasises charity, urging Muslims to “spend in the way of God”, support orphans, feed the poor, and help relatives and travellers.

Caring for humanity is a core Islamic principle. “We’re quite active in the field of cancer care,” says Max Martin, global head of philanthropy at Lombard Odier Group. “The fact that you will soon have a new cancer hospital, the Hamden Bin Rashid Cancer Hospital in Dubai, is, in a sense, the best of philanthropy coming together,” he says.

This is because you are coupling the “power of science” with philanthropic organisations, which act as the “incentive seed funder”, says Mr Martin. “I think it’s a great example of what philanthropy can do, not just at the level of specific projects but contributing to the entire global health landscape of a country or region.”

The hospital, established by the Al Jalila Foundation, is set to open in 2026 as a one-stop-shop for cancer care: prevention, diagnosis and treatment, according to its website.

Mr Martin also mentions how families are donating to help people help themselves. This is done via activities related to microfinance. “You provide working capital for micro-entrepreneurs, and you cannot charge interest,” he says, describing the focus on Muslim communities in France, particularly in Greater Paris.

Wealthy donors work with NGOs to ensure their objective of empowering micro-entrepreneurs is being fulfilled. Backing a hair salon, though not bankable, would be an example of helping entrepreneurs stand on their feet.

“It’s a zero-interest loan, but it’s given on the premise that you engage your honour that you will pay it back; it’s a very elegant way of providing ultimately working capital for someone who’s entrepreneurial,” he says. At the same time, they comply with requirements of Islamic finance.

When it comes to Islamic holidays such as Eid, families in Saudi Arabia are pushing the next generation to take on more responsibility, says Mr Martin. Around Eid, they are given a philanthropic assignment, such as giving gifts to local workers, and asked “How do you want to assume responsibility?” or “Do you give cash or goods?” to the workers. This type of task helps younger generations learn to take on other projects.

Eid's somewhat set date make the younger generation more inclined to take on philanthropic ventures, believes Mr Martin. “If you know you have to deliver something by a specific date, chances are people that are very busy will make themselves available to make the joint decisions they need to put resources in the hands of people who need to get the job done.”

Data-driven philanthropy

The philanthropic space in the Middle East is growing fast, and Standard Chartered’s Mr Shahdadpuri sees many opportunities. “Leveraging digital transformation enables a more data-driven insight into philanthropic needs and opportunities,” he says. Youth engagement can lead to greater innovation, fresh ideas and increased volunteerism,” he adds.

He also believes that there will be increased emphasis on collaboration via public-private partnerships to reach and channel resources more effectively and achieve philanthropic goals.

Sustainability will be key for philanthropic activities in the future. “Many of the younger generation members are active in the business; they see that they’re often protagonists of that [ESG] approach,” says Lombard Odier’s Mr Martin.

Gender equality, although not as dominant as other values, is still in the picture for 47 per cent of single-family offices when assessing potential investments, according to LGT.  Lombard Odier has also seen more female clients involved in philanthropic activities

“I think it’s creating very positive discussions among decision-makers because different viewpoints will come to the fore,” says Mr Martin.

However, there are many challenges ahead, warns Standard Chartered’s Mr Shahdadpuri. “Historically, political instability and conflict have been prevalent in the region,” he says. “These ongoing conflicts pose significant risks to the implementation and sustainability of philanthropic projects.”

In addition, traditional views and cultural sensitivities may delay implementation of modern philanthropic approaches, he says, urging for a more nuanced approach to be adopted: “It is crucial to find a way of balancing tradition, while incorporating evolving aspirations of the next generation and their modern approach to philanthropy.”