Early in my career, when the Gates Foundation was in its infancy, I worked on its first major initiative. The resulting $1 billion grant was the product of a tiny leadership team. My colleagues and I worked with the family and a handful of its staff. Here was a funder of historic means operating with the intimacy of a quaint family foundation. That’s what the beginning of an era can look like, far from the bureaucracy we now know.
If the Carnegies and Rockefellers stood up the first wave of big American philanthropy, the Gateses symbolized the second. Each experimented and evolved, influencing many future philanthropists. In each wave, the biggest players acted with a conviction about the institutions they deemed worth building.
According to Nan Ransohoff’s viral Substack post, the third wave of philanthropy is upon us. She claims that AI wealth will generate up to $100 billion of giving in short order—totaling nearly all of American foundations’ current annual giving. As the OpenAI Foundation emerges and Anthropic’s public offering creates a historic number of billionaires overnight, Ransohoff reports that those who will hold that new wealth intend to give most of it away.
Whether it all flows philanthropically and whether it makes its way to traditional nonprofits is debatable. What does come to social impact organizations will reach those prepared for it.
The Third Wave’s Temperament
In both recent waves, new philanthropists derived their wealth from startups. The AI generation thrives on even greater speed and audacity than its predecessors. After all, this group built something we call intelligence.
Perhaps as a result, this philanthropic expansion is arriving with a built-in bias against institutions, including nonprofits.
What I imagine awaits us may be a more widespread, disruptive version of my early second wave experience. It’s coming headlong into a sector that prizes an incrementalist model. No organization should cede its values to the coming billionaires. So where your team has hesitated to state its core convictions, this is the time to consider rolling them out:
Ambition. Third wave funders will seek organizations signaling aspiration. There’s a reason the biggest second wave funders have launched many of their own organizations. They struggle to find grantees that can absorb their precise recipe of mission and magnitude. Others don’t find the execution they seek. During the Gates Foundation’s early years, my employer administered dozens of big programs. It all paled in comparison to what was coming our way: a $1 billion grant over 20 years. We had to show we were capable of standing up a significant expansion in a matter of months. Evidence came in a stream of data-driven proof points in response to every funder question or reservation. Few organizations can immediately absorb the assets big philanthropies deploy. The third wave will see ambition as a combination of execution speed, AI savvy, and visionary thinking.
Worldviews. The coming philanthropists require that our sector trade service menus for worldviews. Everyone around the Gates table agreed that high-performing, financially vulnerable students deserved an education. The next-level thinking that closed the investment: 20,000 fully-funded scholarships, from undergraduate through doctoral study, that dared to change the demographics of entire growing industries. Third wave players go a step further. They look beyond population segments and focus on what’s best for civilization itself. They demand grantees abandon the impulse to begin with programs—an instinct wrought by traditional foundations—and lead instead with future-facing questions and objectives. Organizations willing to project long term solutions will draw the attention of those obsessed with what’s next.
Visibility. The third wave will compress the factors used to identify potential grantees, requiring greater focus on reputation and prominence. My former executive saw our organization as capable of bigger things. He dropped seeds of that potential with his counterparts in philanthropy. He understood that second wave philanthropists sought a leader whose networks and track record signaled capacity for speed and execution. Nonprofit leadership in the third wave will pair interpersonal circles with disciplined discoverability. More than in any other era, these social impact investors will rely on third party sources to gauge a potential grantee’s reputation. An organization’s digital presence—and how it surfaces in AI-driven searches—will increasingly become a gateway for investors to meet and vet grantees.
Risk. The newly minted AI generation knows there are no guaranteed outcomes. Gates has been a model of leaning into risk, even though not every second wave funder has embraced it. That foundation eventually added $600 million to its initial investment in my former organization. Its global health initiatives have poured far more into eradicating disease, a gamble that has involved decades of vaccine development and unpredictable partnerships with global governments. Entrepreneurs expect most bets to underperform, an experience nonprofits try to hide from funders. The former knows a few of those bets will show enormous payoff. It’s time to take nonprofit dreams off the shelf. The peril in doing so is higher for some organizations than others, but I’ve seen more organizations fail for lack of imagination than too much of it.
The Price of Big Philanthropy
As the tech titans come into their fortunes, wise organizations will stake out their stance on the above issues. Teams that project boldness and competence will attract the largess. If the fastest-minted billionaires in history look around and see plodding institutions with no long-term orientation, expect them to take their money elsewhere.
The alternative could be worse. I’ve seen plenty of second wave money pour into organizations willing to let investors dictate the terms of the work. It has rarely ended well for the grantee, those served by it, or the investor relationship.
Encourage your team to be courageous enough to command its path and principled enough to stand its ground. That equation mirrors second-wave philanthropy, but if these new billionaires invest as promised, the landscape will shift quickly. Prepared organizations won’t sacrifice their direction or values.
Carnegie built libraries. The Gateses connected them to the internet. What might the third wave do? Born of machine intelligence, there’s no doubt it will remake our sector as the others have—and at a pace alien to the average grantee. Whether your organization is part of the reinvention depends on what you build now.
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