A philanthropist is a person who donates time, money, experience, skills or talent to help create a better world. Anyone can be a philanthropist, regardless of status or net worth.
What is philanthropy?
Greek playwright Aeschylus coined the term philanthropy in the 5th century BCE. It meant “love of humanity.” Today, philanthropy means generosity in all its forms and is often defined as giving gifts of “time, talent and treasure” to help make life better for other people.
You can practice philanthropy by making a monetary gift, such as a donation to a cause you believe in. You can also practice philanthropy by giving your time—serving in a soup kitchen, tutoring a teen or engaging in any other volunteer activity that aims to improve lives. So the answer to “what is a philanthropist” is a person who exhibits these behaviors, regardless of how many resources (or how few) that person has.
Who are famous philanthropists?
Some philanthropists are known for giving away substantial sums to aid society—people like John D. Rockefeller and Warren Buffett. Others are known for their good works, such as Mother Teresa and Paul Farmer.
But the vast majority of philanthropists aren’t famous—and many people volunteer instead of or in addition to what they contribute financially. According to this study on volunteerism, more than 60 percent of charitable donors are also recent volunteers.
What are the benefits of being a philanthropist?
Many philanthropists are driven by a deep desire to solve social problems and help others. In addition, the U.S. federal tax code incentivizes giving in a variety of ways, providing donors with deductions against income, capital gains and estate taxes for charitable contributions.
A growing body of scientific evidence also shows that philanthropy benefits the giver as well as the receiver in terms of well-being. Researchers have found that philanthropy contributes to the following positive effects:
- Greater overall happiness
- Lower stress levels
- Better physical health
- Heightened sense of connection to others
How can I become a philanthropist?
You don’t need millions of dollars to be a philanthropist. You can simply donate “time, talent or treasure” toward doing good, but you can increase the impact of your giving by thinking strategically. Educational resources likeBoost Your Giving IQprovides worksheets and other tools for those interested in smarter giving. These tools can help you decidewhat’s important to youand then create anaction planthat maximizes your resources.
Additionally, you may be able to give more to your charitable mission by using specific financial strategies, such as contributinglong-term appreciated securitiesinstead of cash or setting up adonor-advised fund.And some donors set upgiving circles, which bring individuals together to pool their resources around a common cause to have a greater impact. There are many alternatives, each with its own requirements and benefits.
What is philanthropy like in the 21st century?
Increasing transparency into nonprofit operations, advances in technology and changing attitudes toward wealth continue to shape the way individuals approach their giving, according to a study of more than 3,000 donors on the2016 future of philanthropy.
- Transparency: Many donors have increased their focus on results. According to the report, 41 percent of donors say they have changed their giving because of what they learned about nonprofit effectiveness.
- Technology: More than a quarter (27 percent) of donors say that they have changed their approach to giving because technology has provided tools for researching and funding charitable projects and organizations.
- Changing attitudes: Some donors say that they have changed their giving because of trends such as donating wealth to charity rather than passing it on to family.
In addition to changes in overall approaches to giving, donors are also changing how they finance their giving. The following strategies are becoming more popular and common:
- Impact investing: Investing that aims to achieve specific social or environmental benefits in addition to a financial return. Also called social impact investing, it puts markets to work for profit and global good.
- Donations of non-cash assets:Converting stocks and securities, limited partnership interests, real estate and other non-cash assets into funds for charitable giving. In 2023, 63 percent of contributions to Fidelity Charitable were non-cash assets.
- Donor-advised funds: A philanthropic account that allows donors to make a contribution to a charity, qualify for an immediate tax deduction and then recommend grants over time. It’s the fastest-growing charitable giving vehicle in the United States because it’s a simple, flexible and tax-efficient way to give to charity.
