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As the US reduces foreign aid and UN institutions consistently fall short of funding targets, the private side of philanthropy is undergoing a dramatic transformation, driven by three major trends, according to Badr Jafar, the UAE’s special envoy for business and philanthropy.
The first is an unprecedented intergenerational wealth transfer, estimated at $80 trillion globally over the next two decades, with more than $1 trillion shifting hands in the Gulf alone by 2030. The second is a shift toward impact-driven and data-informed giving. The third trend is the rise of new technologies, including artificial intelligence, which allow donors to track the impact of their giving in real time and refine their strategies accordingly.
“Those trends are, in many cases, happening even faster [in the Gulf] than certain other places in the world, because we have a youth bulge” and “digital penetration is very, very high, and the needs are in some respects, also greater,” Jafar said in an interview.
This is reshaping how people donate their wealth and how charities attract the next generation of donors.
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In Islamic countries, the wealth available to charities is vast. Philanthropy in the Islamic world has long been rooted in religious giving, with mechanisms like Zakat and Sadaqah (voluntary giving) generating an estimated $400 billion to $1 trillion annually, Jafar said. “When you just take the lower end of that estimate, $400 billion, that is more than the [world’s] total humanitarian and development aid budgets globally every year,” he said. With plenty of capital available, the challenge is deploying it effectively.
To address this issue, Jafar said philanthropic capital should be more risk-tolerant, long-term, and equitable, serving as a catalytic force for sustainable development. “The question then becomes, are we using this capital as strategically as possible?” he said. “To realize the opportunity, we need to build much better infrastructure for philanthropy across many regions of the world.”
Jafar — the CEO of UAE-based conglomerate Crescent Enterprises and a signatory of The Giving Pledge, which encourage wealthy people to donate the majority of their wealth to address society’s most pressing challenges — explores these themes in his new book, The Business of Philanthropy, which features interviews with Bill Gates, Baroness Valerie Amos, David Miliband, and Razan Al Mubarak.
The book stemmed from a COVID project, Jafar said, and was initially intended to include only a dozen interviews. It ultimately expanded to more than 70, which he later organized into themes.