He also said he believed "every young person" had some talent, and insisted they were not "faceless and nameless".
He was speaking at a ceremony at London's Theatre Royal celebrating the work of the Prince's Trust, which aims to recognise triumph over adversity.
The prince's wife, the Duchess of Cornwall, and actors Pierce Brosnan and Joseph Fiennes were among the guests.
Former footballer Gary Lineker, motor racing star Jenson Button, and singers Will Young and Lemar also supported the ceremony which highlighted success stories made possible by the Prince's Trust.
The prince told the audience of his delight that Camilla, who he described as his "darling wife", could join him, before explaining why he set up the Prince's Trust.
The prince said: "The celebrations this year have caused me to think a little bit about what motivated me all those years ago.
"I still believe that every young person has some talent or ability and that too many go through life without this ever being discovered and unlocked."
He said the consequence of this was an "overpowering" lack of self confidence as well as "a sense of belonging nowhere and mattering to no one."
The prince added: "Many of these young people of course are dismissed as youths, hoodies or thugs or whatever.
"But they are not faceless and nameless."
The prince spoke of his wish for the trust to invest in these youngsters' futures so that could enjoy lives which would benefit their families and communities.
He also said: "There are one million young people under the age of 25 who are not in work, education or training."
The prince and his wife were given a book containing 30 letters from young people who have benefited from the work of the Prince's Trust.
Among the award winners were Kynda Carter, a 29-year old who became a successful businessman in Hertford after a spell in prison and 19-year-old Shenica Williamson, who overcame bullying at school to complete an apprenticeship.