What Is Philanthropy?
Philanthropy involves charitable giving to worthy causes on a large scale, but it is much more than just a charitable donation. Philanthropy is an effort an individual or organization undertakes based on an altruistic desire to improve human welfare. Often, wealthy individuals establish private foundations to facilitate their philanthropic efforts.
Nonprofits are organizations set up to support a variety of social causes such as education, health, science, public safety, and human rights. In the United States, organizations that qualify as nonprofits are exempt from federal taxes under the Internal Revenue Code (IRC) 501(c).
Key Takeaways
- Philanthropy refers to charitable acts or other good works that help others or society as a whole.
- It can include donating money to a worthy cause or volunteering time, effort, or other forms of altruism.
- Increased transparency is a serious matter for many nonprofits; how funds are obtained and used should be carefully documented.
- Notable philanthropists include Andrew Carnegie, known for his large scale of charitable contributions.
- Modern philanthropy often serves dual purposes: securing tax breaks and aiding societal causes.
Understanding Philanthropy
Philanthropy encompasses charitable acts and good works like volunteering time or efforts that help others or contribute to society’s well-being. It might mean substantial donations to support universities, research centers, or college scholarships. For others, it means annual donations to local theaters, food pantries, or schools.
Anyone can be a philanthropist if they offer their talent, time, money, or skills. The term has its origins in the Latin word philanthropia and the Greek word philanthrōpia, both of which mean love or kindness to mankind.
History of Philanthropy
Philanthropy dates back to ancient Greek society. Plato instructed his nephew in his will to use proceeds from the family farm to support the academy he founded in 347 B.C. In Roman history, Pliny the Younger funded a school for boys in the city to keep them educated locally.
In America, John Harvard bequeathed half of his estate to establish Harvard University in 1638. Modern-day philanthropists include Warren Buffett, Melinda Gates, and Dolly Parton, as well as businesses that practice philanthropy.
Benefits of Philanthropy
Philanthropy offers emotional and physical well-being benefits, such as reducing depression, boosting self-esteem, and potentially extending lifespan. For corporations, philanthropy builds a better public image, creates brand awareness, and attracts employees.
Philanthropy and Taxes
The IRS allows most individuals to deduct around 60% of their adjusted gross income through charitable donations. Wealthy individuals may use this to mitigate large tax bills, sparking debate about fairness and their intended use of charitable giving.
Statistics on Giving
In 2021, Americans and U.S. organizations gave about $484.85 billion to charities. Individual contributions amounted to $326.87 billion, with significant sums also donated by foundations, bequests, and corporations.
Examples of Philanthropists
Andrew Carnegie
Andrew Carnegie is perhaps the most famous philanthropist, notable for building over 2,500 libraries worldwide and endowing universities. His contributions exceeded an estimated $350 million.
The Ford Foundation
Established by Edsel Ford, the Ford Foundation focuses on strengthening democracy, economic opportunity, and education.
Bill and Melinda Gates
Bill and Melinda Gates established a foundation that supports global development and health programs, spending almost $54 billion since 2000.
Mother Teresa
Mother Teresa is a notable example of philanthropy without wealth. She established the Missionaries of Charity in 1950 to aid vulnerable communities in Kolkata, India.
Charity vs. Philanthropy
Charity helps immediate needs through acts such as donating coats or contributing to food pantries. Philanthropy aims for longer-term societal improvement, like funding schools or granting substantial scholarships.
How to Become a Philanthropist
Anyone can be a philanthropist by donating time, effort, or money to specific causes.
Corporate Philanthropy
Corporate philanthropy includes donating money, volunteering time, providing scholarships, making community investments, and offering sponsorships.
Types of Philanthropy
Philanthropy takes many forms, including individual and corporate giving, matching donations, bequests, and direct donations. People can contribute money, fund scholarships, offer grants, or volunteer time.
Conclusion
Philanthropy is not reserved for the ultra-rich. Anyone can contribute to societal good through various means. Whether giving money or time, anyone can embrace the spirit of philanthropy and contribute to a better world.
Related Terms: Charity, Nonprofits, Private Foundations, Tax Deductions, Corporate Social Responsibility.
References
- Internal Revenue Service. “Exemption Requirements - 501(c)(3) Organizations”.
- The Internet Encyclopedia of Philosophy. “Plato: The Academy”.
- Dix, T. K. Pliny’s Library at Comum. Libraries and Culture, 1996, Vol. 31, No. 1, pp 85-102.
- Encyclopedia.com. “A Model of Christian Charity: JOHN WINTHROP 1630”.
- The Colonial Society of Massachusetts. “TRANSACTIONS OF THE COLONIAL SOCIETY OF MASSACHUSETTS MARCH MEETING, 1919”.
- Cleveland Clinic. “Why Giving is Good for Your Health”.
- EurekAlert. “People Who Give, Live Longer.”
- Internal Revenue Service. “Charitable Contribution Deductions”.
- Fidelity Charitable. “9 Ways to Reduce Your Taxable Income by Giving to Charity”.
- The Guardian. “We Don’t Want Billionaires’ Charity. We Want Them to Pay Their Taxes”.
- Lilly Family School of Philanthropy. “Giving USA: Total U.S. charitable giving remained strong in 2021, reaching $484.85 billion”.
- Carnegie Corporation of New York. “Andrew Carnegie’s Story”.
- The Ford Foundation. “History”.
- Ford Foundation. “Disrupting systems to advance social justice”.
- Bill & Melinda Gates Foundation. “About Us: Our Story”.
- Missionaries of Charity. “About Us”.
- Forbes magazine. “America’s Top Givers 2022: The 25 Most Philanthropic Billionaires”.
