Hundreds of billionaires have pledged to donate $600 billion but..

Bill Gates and Warren Buffett ushered in a new era of philanthropic giving, comparable to the Rockefellers and Carnegies. But with the threat of higher taxes on charitable organizations and the popularization of new ways of giving by female philanthropists, philanthropy is about to take on a completely different form. MacKenzie Scott has become a leader in this cultural shift, donating more than $200 million to HBCUs and charitable causes in recent months.

Earlier this year, the philanthropy world was rocked when Gates announced that he would close his foundation, donate $200 billion by 2045, and accelerate plans to sell his $100 billion personal wealth.

“There’s an air of anticipation in terms of if and how people are going to follow in his footsteps,” Amir Pasic, dean of the Lilly Family School of Philanthropy at Indiana University, told Fortune in May.

And with 94-year-old multi-talented philanthropist Buffett stepping down from the helm of Berkshire Hathaway later this year, even more change is expected. His Giving Pledge, signed by more than 250 billionaires from 30 countries and reportedly pledging to donate at least $600 billion, opened the hearts and wallets of the ultra-wealthy. But questions remain as to whether billionaires will pick up the torch and live up to their promises even after Buffett inevitably steps away from this pledge.

Experts agreed that a change is on the horizon—but it doesn't mean a complete halt to philanthropy. In fact, it could open the door for a more diverse group of donors to take the lead.

"We're likely to see more women coming out of the shadows," Passick predicted.

How philanthropy will look in a new era

Many billionaires have started foundations to channel their philanthropic efforts, but a recent decision by the U.S. House of Representatives could change this trend. This May, a budget reconciliation package approved would impose a 10% tax on foundations with assets exceeding $5 billion.

“The reason this is insidious is that it’s going to really hit the big liberal foundations like Gates, Ford, and Soros,” Kathleen McCarthy, director for the center on philanthropy at CUNY, told Fortune earlier this year. “Whereas the conservative foundations are much smaller and they will pay a much lower rate.”

These tax increases could severely impact thousands of liberal organizations led by billionaires like Gates, Scott, George Soros, and Mark Zuckerberg. This could completely change the way billionaires approach philanthropy.

“[Billionaires] will start looking at alternative mechanisms once they realize that they’re going to be forced to sunset foundations,” McCarthy said. “That’s what’s being jeopardized right now.”

But some ultrawealthy donors are already rewriting the rules. Scott’s “stealth giving” practice entails giving unrestricted money directly to nonprofits, trusting them to handle the funds as they see fit, with no strings attached.

According to McCarthy, as billionaires are driven away from the foundation-based model, they are pulled toward alternative ways of giving. This includes being inspired by Scott’s inconspicuous and direct donation strategy as a way to get around new tax policies.

“I think she’s a trendsetter and sort of moral ballast to the way that Gates has been,” Bella DeVaan, associate director of the charity reform initiative at the Institute for Policy Studies, told Fortune. “I do see that being not just a trend, but shifting common sense toward trust-based philanthropy.”

Scott donates through her Yield Giving Foundation, which has distributed more than $19.25 billion to 2,450 nonprofits to date, and experts say billionaires may be inspired by direct giving. Devan also predicts that Melinda French Gates will pioneer philanthropic LLCs, an alternative to traditional foundations.

Charity experts have made a common point about who is driving innovation in philanthropy, and how the typical composition of mega-donors is changing: women are in the spotlight. With more than 200 new billionaires expected in 2024 alone, approximately four per week, more players are entering the field, and some women are amassing immense wealth. The status quo of philanthropy is changing, and women are front and center.

Women are becoming new leaders in philanthropy.

When tasked with naming rising philanthropic stars to fill Gates' and Buffett's high positions, experts have already pointed to some leading names. One figure is on everyone's mind: philanthropist MacKenzie Scott.

Last Sunday, Howard University, a historically Black college, announced that Scott had donated $80 million—one of the largest single donations in its 158-year history. In September, Scott also gave $70 million to UNCF, America's largest private foundation providing scholarships to Black students, as part of a $1 billion campaign. She is also opposing Trump's budget cuts to FEMA, as the Center for Disaster Philanthropy (CDP) announced last month that it had received a $60 million donation from Scott to help communities reeling from natural disasters.

"This is a woman making a very bold statement about how she will donate her money: by trusting the recipients, and not demanding any reports from anyone," Passick said. "She's the complete opposite of Bill Gates' technocratic approach to matters."

Experts also mentioned names like French Gates, who also played a key role in the Gates Foundation and continues to lead the donations. Meanwhile, Zuckerberg and his wife, Priscilla Chan, are pouring money into innovation in human health. They also pointed out that women have long been philanthropists, albeit behind the scenes; Madam C.J. Walker, an African-American woman who became the first self-made female millionaire, was a major donor at the turn of the 20th century.

And in 2025—when American women will have greater access to wealth and power than ever before—this group will become even more active.

"You're going to see women becoming more prominent mega-donors. They're very comfortable managing money. They're very comfortable doing research, and they're looking for ways to change the system," McCarthy said.