What is philanthropy?
Thanks to media coverage of large donors such as Bill Gates and Warren Buffet, most people are familiar with the concept of modern philanthropy, which generally refers to the act of providing grant dollars in order to achieve a desired outcome or impact for people and communities. Organized philanthropy has grown dramatically over the past few decades. According to the Foundation Center, in 1975, almost 22,000 foundations accounted for $1.94 billion in annual giving; in 2011 there were well over 81,000 foundations that contributed nearly $49 billion. Foundation assets have also swelled—growing from $30 billion in 1975 to more than $660 billion in 2011.
As the number of private foundations increases, the diversification of the ways and means through which people give is also on the rise. Significant developments include the creation of charitable gift funds operated by large financial institutions; the rapid growth of donor-advised funds at community foundations; the popularity of online giving and use of social media to support causes; and the expansion of pooled funds such as giving circles.
While organized philanthropy continues to grow and adapt to ever-changing social and economic trends, it is important to note that contributions by individuals remain by far the single largest source of charitable dollars in the United States, accounting for more than 75 percent of total giving each year.
- Read a complete chronological History of Philanthropy compiled by the National Philanthropic Trust
- Get the most recent data about foundation philanthropy from the Foundation Center and about overall charitable giving from Giving USA
Or view Know Your Sector, a short video intended to help donors, volunteers, nonprofit workers and others better understand the impact of the nonprofit sector
Some recent trends in giving...
Crowd funding has its origins in the concept of crowdsourcing, where ideas are solicited from a large group of people, often via an online community. Crowdfunding is the application of this concept to the collection of funds through small contributions from many parties in order to finance a particular project. One of the most popular crowdfunding sites is Kickstarter, which focuses primarily on creative/artistic ventures. Other examples of crowd funding sites are Indiegogo, GoFundMe, and Crowdrise.
* * *
An article by FSG's John Kania and Mark Kramer published in the Winter 2011 edition of the Stanford Social Innovation Review spurred a sector-wide conversation about Collective Impact - the idea that no organization acting alone can solve large-scale issues. Beyond mere collaboration, collective impact is a rigorous approach with five conditions that, together, are a lever for deep and lasting social change. FSG continues to conduct research on this strategy and has created an online knowledge exchange to share tools and stories of collective impact in action.
>> To learn more, visit FSG's Collective Impact Blog, or read the latest article by John Kania about collective impact: Embracing Emergence: How Collective Impact Addresses
Complexity (Stanford Social Innovation Review, January 2013)
* * *
Over the past decade, giving circles have emerged as a new and growing trend in hands-on philanthropy. Giving circles are formed when individuals come together - often friends, neighbors, or co-workers - around a common cause and pool their charitable dollars to have greater impact. Visit the website of DVG member Impact100 Philadelphia for an example of a giving circle in action.
>> To find out more about giving circles, click on the graphic to the right/above to visit the Forum of Regional Associations of Grantmakers' Giving Circles Knowledge Center.
* * *
"Giving While Living"
Giving While Living is a philosophy whereby individuals and families choose to devote their funds - and often their skills and time as well - to charitable causes during their lifetime rather than bequeathing funds to a foundation or charity after their death. Many donors find this approach yields enormous benefits and satisfaction, allowing them to experience first-hand the impact of their gifts.
>> Published by The Atlantic Philanthropies, the report "Turning Passion Into Action: Giving While Living" contains the inspiring stories of 11 philanthropists who have embraced the "giving while living" philosophy, including Atlantic's founder Charles A. Feeney.
* * *
Recent years have seen an unprecedented number of disasters that have garnered the world's attention -- as well as their dollars. Starting in 2001 with the terrorist attacks of September 11, followed by the Asian Tsunami and Hurricane Katrina, and more recently the devastating earthquake in Haiti and Hurricane Sandy, both individuals and institutions worldwide have made unprecedented donations for relief and recovery efforts. Because of the immediacy of the need created by disasters, some people have dubbed this phenomenon flash giving.
>> To learn more about best practices for disaster grantmaking, download
Disaster Grantmaking: A Practical Guide for Foundations and Corporations (PDF)
or visit the Center for Disaster Philanthropy
* * *
Groups like the Growth Philanthropy Network have pioneered efforts to find and finance projects that have a proven track record of success; GPN's Social Impact Exchange is building a "philanthropic capital marketplace" that seeks to provide reliable funding for scaling high-impact nonprofit initiatives. The federal government is also embracing the concept of scaling, as evidenced by the creation of the Social Innovation Fund in 2009 to mobilize public and private resources to grow promising, innovative community-based solutions. In conjunction with the SIF initiative, Grantmakers for Effective Organizations (GEO) launched the Scaling What Works web portal to share information about the fund's activities.
* * *
Technology and Social Networking
As the world becomes increasingly dependent on technology, people are finding new and creative ways to both raise and donate funds through web-based tools. Online charity search sites and giving portals, mobile devices as a new "channel" for giving, and peer-to-peer fundraising through social networking sites are just a few examples of how technology is transforming how we give.
>> Nonprofits have begun to partner with "deal of the day" websites like CauseOn, Deals for Deeds, LivingSocial and others that offer discounts to local businesses and give a portion of their coupon sales to charitable organizations.
Check out these blogs to keep up on the hot topics and latest trends in philanthropy:
Deep Social Impact
The Intrepid Philanthropist Blog
White Courtesy Telephone