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.

twitter / investopediacom

Related Articles
  1. Entrepreneurship

    3 Entrepreneurs Who Became Successful After 40

    Read about four influential entrepreneurs who didn't achieve fame and success until after their 40th birthdays, including the founder of Walmart.
  2. Credit & Loans

    Walmart MoneyCard Vs. Walmart Credit Card

    Discover how the Walmart MoneyCard and the Walmart credit card have different benefits that may influence your decision on which one to choose.
  3. Taxes

    10 Money-Saving Year-End Tax Tips

    Getting organized well before the deadline will curb your frustration and your tax liability.
  4. Savings

    These 10 Habits Will Help You Reach Financial Freedom

    Learn 10 key habits for achieving financial freedom, including smart budgeting, staying abreast of new tax deductions and the importance of proper maintenance.
  5. Credit & Loans

    Have Bad Credit? 6 Ways to a Personal Loan Anyway

    It'll cost you more, but borrowing is definitely doable. Here's how to proceed.
  6. Credit & Loans

    How To Minimize Holiday Debt Before It Happens

    Holiday expenses can drown you in debt. Find out how to avoid this festive spending hangover.
  7. Credit & Loans

    These Are The Best Credit Cards For Making Balance Transfers

    Handled correctly – and very carefully – a promotional credit card balance transfer offer can save you money. Here are some of the best deals around now.
  8. Investing

    How to Raise Your Credit Score Quickly

    Here are the best tips for raising your credit score quickly.
  9. Credit & Loans

    Getting Your Name Off A Cosigned Loan

    If you want to remove your name from someone else’s loan, there are four key ways to do it.
  10. Credit & Loans

    How Credit Card Delinquency Works

    When you pay less than the minimum monthly payment on your credit cards, you become delinquent.
  1. Is Apple Pay safe and free?

    Apple Pay is a mobile payment system created by Apple to reducing the number of times shoppers and buyers have to pay for ... Read Full Answer >>
  2. Can you use your Walmart credit card at Sam's Club?

    Consumers can use their Walmart credit cards to shop at Sam's Club. However, they cannot use their Walmart credit cards when ... Read Full Answer >>
  3. How can you cancel your Walmart credit card?

    Walmart offers two types of credit cards: the Walmart MasterCard and the Walmart credit card. How to Close Your Walmart Credit ... Read Full Answer >>
  4. Does the Walmart credit card have an annual fee?

    The Walmart credit card does not charge annual fees to its cardholders. It does, however, have other fees associated with ... Read Full Answer >>
  5. How do NetSpend cards work?

    NetSpend prepaid MasterCard and Visa cards are popular prepaid debit cards requiring no minimum balance and no credit check. ... Read Full Answer >>
  6. Can the Best Buy credit card be used anywhere?

    The Best Buy credit card can only be used in Best Buy stores and when making purchases online through the Best Buy website. ... Read Full Answer >>

You May Also Like

Trading Center