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The complex notion of philanthropy

We might think that “philanthropy” and “charity” describe the same things, but there are subtle differences between them. While they both involve giving, charity tends to be a “one-off” immediate response to a short-term need (eg. sending a check, texting a donation, etc). Philanthropy is more long-term and strategic and often involves making multiple donations over a number of years (source).

A philanthropist is a person who donates time, money or skills to help create a better world. Anyone can be a philanthropist, regardless of status or net worth. Some philanthropists are known for their good works, such as Mother Teresa, and others for giving away substantial sums to aid society—people like Warren Buffett or Bill Gates (source).

Globally, there are at least 260,000 charitable foundations in 39 countries that hold an accumulated wealth of $1.5 trillion, according to a report by Harvard University.

In USA in 2021 the largest source of charitable giving came from individuals, who gave $326.87 billion, representing 67% of total givings. Corporate and foundations givings represented 22% of total givings (source).

This might seem surprising, as today philanthropy is most often associated with the super wealthy, foundations, and corporations. Most of the time, wealthy individuals channel their wealth through private foundations that carry tax benefits (source). Economist Robert Reichargues goes as far as saying that the foundations through which most wealthy people direct their donations are exquisite forms of tax evasion.

This kind of philanthropy is regularly criticized and presented as fundamentally flawed. The argument there is that if wealth were better distributed then there would be no need for philanthropy, no need for individuals to fund basic human rights like access to food and water.

Amitabh Behar, CEO of Oxfam India, argues that many philanthropic efforts prevent the systemic causes of poverty, inequities, and injustices from being addressed.

The philanthropic community has repeatedly challenged these criticisms. Phil Buchanan of the Center for Effective Philanthropy argues that philanthropy is an essential part of a healthy civil society. He says that philanthropy complements government work by helping non profit and local organizations and by funding activists who play an important role in the fight against poverty or for social justice.

Darren Walker of the Ford Foundation argues that, by directing philanthropy toward the general good of humanity, the need for philanthropy will ultimately disappear.

“‘Giving back’ is necessary, but not sufficient,” he wrote in a New York Times op-ed. “We should seek to bring about lasting, systemic change, even if that change might adversely affect us. We must bend each act of generosity toward justice.”

Whatever our views or opinions on the subject, philanthropy is definitely an interesting subject and often an absolute necessity for the survival of many organizations.


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