Philanthropy is more than just fundraisers and awards dinners, and it's not just for the ultra wealthy. It is a vibrant, organized industry that includes generating and disseminating money, goods and services, and fills an important void in the welfare of the world and the economy.
The industry has its own professional organizations which provide advice to nonprofits on everything from fundraising techniques to selecting foundation board members. Umbrella organizations provide support to other nonprofits. For example, The Foundation Center offers training, industry research and a subscription database of available funding sources for nonprofits.
What Do Philanthropists Do?
Philanthropy allows people to help one another by helping the charitable organizations that meet needs not filled by government or other organizations. They raise money, manage assets, organize and disseminate funds and provide other services like supplying food, water and shelter after a natural disaster.
nonprofits are increasing their efforts at advocacy, and influencing political policy in favor of their causes has become a much larger focus. The Center for Lobbying in the Public Interest assists nonprofits in their efforts to effectively have their messages heard and persuade policy changes in their favor.
Where Does the Money Come From?
nonprofit revenue comes from the government, corporations, religious organizations and individual donors. According to the GivingUSA Foundation 2008 report, large national charities reported income of $1.4 trillion in 2007. Grants accounted for 67% of income, while individual contributions made up 22%.
What is the Impact of Philanthropy on the Economy?
There are almost 2 million nonprofit organizations in the United States, according to The Center for Charitable Statistics, and over $46 billion were distributed from nonprofit foundations in 2007.
In 2006, more than 8% of wages paid in the U.S. were from nonprofit organizations. The support services targeting nonprofits include consultants, auditors, software companies and investment management firms.
How has the Economy Impacted Charitable Giving?
GivingUSA Foundation reported a 3% decline in revenue from individual giving to nonprofit organizations. This matches the result found by the Barclays Wealth 2009 report, "Tomorrow's Philanthropist." Barclays states that, while traditional wealthy donors decreased gifts by 2.2%, new younger donors increased giving 2-3%. The foundation also found that wealthy individuals are more socially aware and take a more active role in their philanthropic endeavors.
Recent investment fraud cases and the downturn in the stock market have decimated endowment funds. nonprofits are persevering. The FoundationCenter's newsletter cited numerous employee lay-offs among nonprofit organizations in an effort to channel as much income as possible toward organization missions.
Still, the economy is dependent, to a large extent, on philanthropic giving in support of nonprofit organizations. While the sector is not as large or identified as the for-profit market is, it's a vital component in our economic strategy.