Philanthropy is the act of giving back to society, usually through donations of time, money, or resources. Many people choose to philanthropy in order to make a difference in the world, or to give back to causes they care about. Some philanthropists also see it as a way to create positive change and build a better world.
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The Meaning of Philanthropy
The word philanthropy comes from the Greek words for “love of humanity.” It is often used to describe giving to charitable causes, but its original meaning was broader than that. A philanthropist is someone who uses their resources to improve the well-being of others.
The Origin of the Word
The word philanthropy is derived from two Greek words, philos and anthropos. The first word, philos, means “love” in the sense of caring for or cherishing someone or something. The second word, anthropos, means “human being” or “humanity.” Combining these two words produces the literal meaning of philanthropy as “love of humanity.”
Over time, the meaning of philanthropy has evolved to also include the concept of giving money and time to worthy causes. In this sense, philanthropy is about more than just money — it’s also about giving your time and energy to help make a difference in the world.
There are many different ways to be a philanthropist. Some people give their time by volunteering for a cause they care about. Others give their money by making donations to charities or other nonprofit organizations. And some people do both!
The Broadest Definition of Philanthropy
Broadly defined, philanthropy is the love of humanity. A philanthropist is someone who cares about the welfare of others and takes action to improve their lives.
The word philanthropy comes from the Greek roots “philos” meaning “love” and “anthropos” meaning “humanity.” Together, they form the word philanthropia, which was originally used to describe goodness and humaneness.
Philanthropy can take many different forms. It can be expressed in acts of kindness, such as volunteering your time or donating money to a cause you care about. It can also take the form of more formalized giving, such as setting up a foundation or establishing a scholarship program.
While philanthropy is often associated with wealthy individuals or organizations, anyone can be a philanthropist. Philanthropy is about using your time, talents, or resources to make a positive difference in the world.
Types of Philanthropy
There are a lot of different ways to give back to the community. Some people choose to volunteer their time, others donate money, and some people even start their own charities. Philanthropy is the act of giving back to the community, and there are many different ways to do it.
Individual Giving
Concerted and purposeful generosity towards others or the common good, philanthropy takes many different forms. The best philanthropy meets a pressing social need that is not being adequately addressed by government or markets and promises to make a lasting difference. A philanthropist is someone who makes a donation intending it to have an impact on the lives of others, either through direct giving or through supporting charitable organizations.
There are many different ways to give philanthropically, but one of the most common is individual giving. Individual giving refers to donations made by individuals, families, or small groups of people without going through an established organization. This can take the form of a one-time gift, such as donating to relief efforts after a natural disaster, or ongoing support for a specific cause. Individual giving can also take the form of volunteering time or talents to support a cause or community organization.
Corporate Giving
Corporate giving, also called corporate philanthropy, refers to the charitable donation of money, time or resources by businesses and corporations.
The reasons for corporate giving are varied. Some companies give to support causes that are aligned with their business values or that relate to their products or services. Others give to build goodwill and relationships in the community, or to engender loyalty among employees. And still others see corporate giving as a way to address social issues or to give back to the community.
Whatever the reason, corporate giving can take many forms. Some companies donate money directly to nonprofits, while others may sponsor fundraising events or volunteer programs. Some may even establish their own foundations to support causes they care about.
Corporate giving is a growing trend worldwide. According to a 2018 study by The Conference Board, global spending on corporate philanthropy increased by 6 percent between 2016 and 2017, with North American companies accounting for the lion’s share of that growth.
Giving by Foundations
There are two main types of philanthropy: giving by individuals and giving by foundations. Each has different tax implications and each has its own set of pros and cons.
Giving by individuals is the most common type of philanthropy. Individuals can give money, time, or goods to charity. The most common way to give money is to write a check or donate online. Individual donors can also set up charitable trusts or give appreciated securities.
Giving by foundations is the second most common type of philanthropy. Foundations are usually created by businesses or wealthy individuals. They provide grants to charities that match their mission. Foundations can also fund specific projects or programs within a charity.
Community Foundations
A community foundation is a type of philanthropic organization that serves a particular geographic area, typically a city, county, or region. Community foundations are unique in that they combine the resources of many different donors to support the needs of their communities.
Community foundations are often thought of as grantmakers, but they also provide other important services to their communities, such as donor advising, capacity building for nonprofits, and convening stakeholders around important issues. Many community foundations also manage scholarship programs and provide fellowships and other opportunities for community leaders.
Giving Circles
Giving circles are groups of people who pool their money and decide together where to give it away. They’re a way to make your philanthropy more social and can be a great entry point into giving for people who want to get more involved but don’t know where to start.
Anyone can start or join a giving circle. Some give circles are open to anyone who wants to join, while others are invite-only or restricted to people with a certain interest or connection. For example, there are give circles for women, young professionals, employees of specific companies, parents at a certain school, members of a church or temple, and so on.
Most giving circles have an annual membership fee that goes towards the cost of running the circle and administering grants. The membership fees can range from a few hundred dollars to several thousand dollars.
Giving circles usually have set procedures for how they operate. Some have committees that vet grantee organizations, while others let all members vote on where to give the money. Some giving circles only fund organizations in their local community, while others will fund organizations anywhere in the world.
If you’re interested in joining or starting a giving circle, there are many resources available to help you get started.
Why Give?
When most people think of philanthropy, they think of wealthy individuals writing large checks to support their favorite causes. But philanthropy is about so much more than that. It’s about using your time, your talents, and your treasure to make a difference in the world. Why do people give? There are many reasons.
The Personal Satisfaction of Giving
One of the primary motivators for giving is the personal satisfaction that comes from helping others. When you give to a cause you care about, you can see the impact of your donation and feel good knowing that you are making a difference.
Many people also give because they want to make a difference in the world and leave a legacy. By giving back, they feel they are making the world a better place for future generations.
Some donors also give for Tax Benefits. In Canada, there are tax benefits for charitable donations. For more information, please consult the Canada Revenue Agency website.
The Tax Benefits of Giving
The Tax Benefits of Giving
As a general rule, you can deduct charitable contributions of money or property you make to qualified organizations if you itemize your deductions.
How Much Can You Deduct?
For cash contributions, you can deduct up to 50 percent of your adjusted gross income, but 20 percent and 30 percent limitations apply in some cases. For contributions of property, the deduction generally is limited to your cost or other basis in the property. Special rules apply for determining the deduction for contributed property that has increased in value.
What Organizations Qualify?
To be qualified, an organization must be organized and operated only for religious, charitable, scientific, literary or educational purposes, or for the prevention of cruelty to children or animals.
The Business Benefits of Giving
The act of giving back to society has been around since the beginning of time. Whether it was helping a neighbor in need or giving to a local charity, philanthropy has always played an important role in our communities.
In recent years, philanthropy has evolved and expanded to encompass much more than just writing a check to your favorite nonprofit. Today, philanthropy is about using your unique talents and resources to make a difference in the world. It’s about using your time, your money and your influence to create positive change.
And it’s not just for the wealthy anymore. Ordinary people from all walks of life are finding ways to give back that are both personally gratifying and financially rewarding.
Here are just a few of the many benefits of giving:
1) Giving makes you feel good.
There’s no doubt about it – giving feels good. When you help someone else, you can’t help but feel good yourself. In fact, studies have shown that giving can actually increase levels of happiness and satisfaction with life.
2) Giving is good for your health.
Giving can also have positive effects on your health. Studies have shown that people who give regularly have lower blood pressure and longer lifespans than those who don’t give. And while we all know that stress is bad for our health, did you know that giving can actually help reduce stress? It’s true! So if you’re looking for a way to improve your health and well-being, look no further than philanthropy.
3) Giving strengthens relationships.
Whether you’re volunteering with a group of friends or colleagues or making donations as part of a family foundation, giving can help strengthen the bonds between you and the people you care about most. Working together for a common cause can increase communication and collaboration, and ultimately make your relationships even stronger.
4) Giving builds social capital.
Social capital is the glue that holds communities together. It’s what makes us trust strangers and cooperate with others even when there’s no immediate benefit to ourselves. When we give back to our communities, we build social capital and make our communities better places to live for everyone.
How to Give
When most people think of philanthropy, they think of wealthy individuals writing checks to support causes they care about. While philanthropy certainly can take the form of major gifts, the reality is that anyone can be a philanthropist. You don’t need to be wealthy to make a difference. In fact, many people who give regularly to charity are of modest means.
Determining Your Giving Goals
As you begin to establish your philanthropic goals, it is important to first consider your overall financial goals. Giving back should be incorporated into your financial planning in order to maximize the impact of your philanthropic dollars. Once you have considered your financial goals, you can begin to think about the causes that are most important to you.
It is helpful to think about your philanthropic goals in terms of three different types of giving: immediate, intermediate, and long-term. Immediate giving is typically in response to a specific need or crisis, such as a natural disaster or medical emergency. Intermediate giving usually supports causes that are important to you on a regular basis, such as an annual donation to your alma mater or a monthly gift to a local charity. Long-term giving typically takes the form of endowments or planned gifts, which are designed to support a cause over the long term.
Once you have determined the types of causes you would like to support, you can begin to set more specific goals for your philanthropy. Some questions to consider include:
-How much money do I want to give each year?
-What percentage of my overall income do I want to give?
-What types of organizations do I want to support?
-What causes do I want to focus on?
-What impact do I want my philanthropy to have?
Finding the Right Charity
When you’re ready to give back, it’s important to find a cause that speaks to you. Whether you’re passionate about animal welfare, the environment, or helping those in need, there are endless opportunities to make a difference. To get started, here are a few questions to ask yourself:
-What are my interests and passions?
-What are the causes that I care about?
-What are the issues that I want to help solve?
-What type of organizations do I want to support?
Once you’ve identified the causes you care about, it’s time to start researching charities. Here are a few things to look for:
A charity should be:
-Registered with the IRS as a 501(c)(3) organization. This means that they are tax-exempt and can receive tax-deductible donations.
-Transparent about their finances and how they use donations. Reputable charities will make this information easily available on their website or upon request.
-Able to clearly articulate their mission and what they hope to achieve with donations.
-Run by a Board of Directors or similar governing body. This ensures that there is accountability and responsibility within the organization.
Making the Most of Your Giving
There are many ways to give, and each has its own advantages. Here are some common methods of giving, along with the pros and cons of each:
-Writing a check: This is the simplest way to give, and it’s also the most flexible. You can write a check for any amount, and you can give it to almost any organization. The downside is that it can be easy to forget about your gift or lose track of it if you don’t keep good records.
-Giving appreciated securities: If you have stocks or other securities that have gone up in value, you can avoid paying capital gains tax by giving them to a charity. The charity will sell the securities and use the proceeds for its programs. The downside is that you won’t be able to take a deduction for the full value of the securities — just for the cost of them when you originally bought them.
-Donating property: You can donate land, buildings, or other property to a charity. The charity can either use the property itself or sell it and use the proceeds. The advantage of this method is that you can take a deduction for the full market value of the property. The downside is that it can be difficult to find a charity that is willing to accept property donations.
-Creating a charitable trust: With this method, you transfer assets into a trust that pays income to a charity on an ongoing basis. You get an immediate tax deduction when you create the trust, and you may also be able to avoid capital gains taxes on appreciated assets. The downside is that trusts can be complex and expensive to set up and administer.
Giving Trends
According to Giving USA 2019: The Annual Report on Philanthropy for the Year 2018, total charitable giving in the United States reached an estimated $428.02 billion in 2018, 4.4 percent more than in 2017 in current dollars.
The Growth of Charitable Giving
For many years, Americans have been among the most generous people in the world when it comes to charitable giving. In recent years, however, there has been a slight decrease in the overall amount of money that Americans donate to charity each year.
There are a number of possible explanations for this decrease. One is that the economic downturn that began in 2008 has led to less disposable income for many people. Another possibility is that the growth of online giving has made it easier for people to donate to causes they care about without necessarily writing a check or donating money in person.
Whatever the reason for the decrease, it is clear that philanthropy remains an important part of American culture. In 2015, Americans donated more than $373 billion to charity, and this number is expected to grow in the coming years.
The Impact of the Economic Downturn on Giving
The 2007-2009 economic downturn had a profound impact on American philanthropy. Individual giving declined sharply, while foundations and corporations slashed their grantmaking budgets. The effects of the downturn were felt across the nonprofit sector, with many organizations experiencing sharp declines in revenue.
Giving by individuals fell by more than 3 percent in 2008, the first time giving had declined since 1972. The biggest drop was among households earning $200,000 or more, whose giving fell by nearly 8 percent. foundation grantmaking also declined in 2008, falling by more than 5 percent.
The economic crisis had a ripple effect on the nonprofit sector, as demand for services increased at a time when many organizations were seeing substantial declines in revenue. A 2009 survey of nonprofit executive directors found that nearly 60 percent had seen an increase in demand for their services, while more than one-third had experienced a decrease in funding.
The downturn also led to a change in the way many donors gave. In 2009, nearly half of all donors said they would be giving less to charity over the next five years than they had in the past. At the same time, however, there was a significant increase in the number of donors who said they were interested in giving to charities that provided direct services to those in need.
The economic crisis has had a lasting impact on American philanthropy. In the years since the recession began, individual giving has steadily increased, but it has not yet returned to its pre-recession levels. Foundations and corporations have also increased their grantmaking, but many remain cautious about committing too much money to any one organization or cause.
The Increasing Importance of Online Giving
In recent years, online giving has become an increasingly important part of philanthropy.
There are a number of reasons for this trend. First, the internet provides a convenient way for donors to give to their favorite causes. second, online giving allows donors to easily compare different charities and make sure their donations are going to effective organizations. Finally, online giving makes it easy for donors to see the impact of their donations and track their giving over time.
Despite these advantages, there are still some challenges with online giving. For example, it can be difficult to know if a charity is legitimate, and it can be hard to make sure your donation is used effectively.
Overall, online giving is a convenient and efficient way to support the causes you care about. With a little research, you can make sure your donation has a real impact.
