Hotel magnate Barron Hilton, 80, will donate 97% of his $2.3bn (£1.2bn; 1.6bn euros) fortune to the Conrad N Hilton Foundation, set up by his father.
The funds come from the $20bn sale of Hilton Hotels to The Blackstone Group.
Reports have said that Mr Hilton is embarrassed by the behaviour of his granddaughter.
Ms Hilton, known for her party lifestyle, spent three weeks in jail earlier this year for violating probation in a drink driving case.
....The foundation supports projects that provide clean water in Africa, education for blind children and housing for the mentally ill.