What is Philanthropy?

Modern philanthropy, broadly defined, entails the voluntary giving of charitable donations in support of the common good. Today in the U.S., the term philanthropy refers not only to the act of giving, but also describes an extensive network of foundations, corporate donors, and individual givers who support numerous causes and interests in order to improve the quality of life in our communities.

Philanthropy Today
American philanthropy has traveled far from its beginnings as an aristocratic endeavor practiced by only the very wealthy. The last quarter century has seen a phenomenal growth in private sector giving. In 2006, "Giving USA", an annual research study published by the Giving Institute (formerly the AAFRC Trust for Philanthropy) estimated total giving for 2005 at over $260 billion. According to the Foundation Center, the number of active foundations has more than doubled since 1975 to over 68,000 in 2005, with their annual giving increasing well over ten-fold, to an estimated $33.6 billion. Gifts from individual donors are the largest single source of grant dollars, representing 75% of all giving.

This growth in giving was fueled in the 1990s, in particular, by an unprecedented period of economic prosperity, which has given rise to other significant developments such as the creation of charitable gift funds by commercial financial institutions, online giving or "e-philanthropy," giving circles, and the emergence of a venture capital approach to giving known as "venture philanthropy." Future prospects for giving are also optimistic. Of an expected $10-to-$20 trillion transfer of wealth from one generation to the next over the next 20 years, estimates indicate that about $2 trillion will be designated for charitable purposes.

Taken together, these factors suggest that more and more people are participating in philanthropy at a significant level, and many are establishing permanent charitable funds through which to channel their resources in order to make a positive difference in the lives of individuals, families, and communities.

How Philanthropy Works
While philanthropic organizations can vary greatly in size and type, most operate by providing needed resources to nonprofit organizations in the form of cash grants, technical assistance, in-kind donations, and volunteer time. These nonprofits in turn transform those charitable donations into programs and services that benefit our communities, such as:

•	providing food and shelter
•	strengthening educational programs
•	improving health and child care
•	protecting the environment
•	enhancing access to technology
•	supporting art, cultural and historic treasures

Beyond providing grant dollars, philanthropy can also provide leadership in bringing people and organizations together around a particular issue, need, or project. As part of what is often referred to as the "third sector," philanthropy can use its unique position to work fluidly with government and community leaders, businesses, and the general public to forge alliances that will mobilize and leverage resources toward common goals.

Public Sector Involvement
The government is also a partner in supporting these efforts through public funding, with recent figures estimating 30 percent of federal government spending is directed to nonprofit agencies for the delivery of services.

Delaware Valley Grantmakers is a partner in this process by providing information resources for givers and encouraging knowledge sharing and collaboration among regional funders. Whether you are just beginning to explore your charitable goals and options or are a more experienced grantmaker seeking greater impact, DVG can serve as a resource and a guide to help you maximize the effectiveness of your philanthropic efforts. For further information on how DVG can help you with your philanthropy, please visit How DVG Can Assist You or call us at 215-790-9700.