Philanthropy can be defined in many ways. The word comes from the Greek, meaning "love for mankind." Modern definitions include the concept of voluntary giving by an individual or group to promote the common good and improve the quality of life. In the United States, the term "philanthropy" is also used to describe the granting of money to nonprofit organizations by foundations and corporations.

Giving satisfies a basic human purpose of lending resources to improve the condition of mankind. By giving to community, arts, educational, religious, and civic organizations we exercise our support for the goals, the people, and the purposes we believe in.

Philanthropy takes on many forms. It is caring and serving. It is our individual response to human needs; an opportunity to be involved.

Creating Your Own Philanthropy

There are a number of options to choose from if you would like to create your own philanthropy, such as setting up a private foundation or establishing a fund within a community foundation. These options provide for different ways to meet your charitable goals and have differing tax consequences.

Follow this link to explore which options may be right for you. It will open a new browser window, simply close the window to return to this site.

Types of Funders

Private Foundations are the most common type of foundation. They are generally endowed, usually from a single individual or family. Private foundations frequently are also considered family foundations if relatives of the original donor are still active on the board of trustees or in the operation of the foundation. Grant decisions may be made by the original donor, by members of the donor's family, by an appointed board of directors or by a bank trust officer acting on the donor's behalf. The geographic and interest areas of these foundations are often limited by trustee decision or the will of the donor. Private foundations with no connection to the donor family are informally known as independent foundations.

Corporate Foundations are also private foundations. They are independent grantmaking organizations whose originating donor is a corporation rather than a family or individual. They may have an actual endowment, or they may receive annual funding from the corporation. Grantmaking decisions are usually made by a board of directors consisting of top corporate management, local corporate officers, employee committees and sometimes outside community members. Geographical range is often limited to areas where there is a corporate presence.

Corporate Giving Programs are similar to corporate foundations, except that they are not legally foundations and therefore are not required by law to grant a certain percentage of assets or to publicly disclose their grantmaking activities. Many corporations run both a foundation and a giving program, coordinating the grantmaking activities of the two. A corporate grantmaking budget is usually determined by the company's economic health and is sometimes set by a formula related to profits. Often the giving program works closely with their company's marketing and public relations departments.

Public Foundations/Charities are publicly supported charitable organizations that receive much of their financial support in the form of contributions from the general public. There are many types of public foundations including community foundations. Public foundations support a variety of interest areas with or without geographic limitations as defined in their organizing charter and/or by their governing boards. The public foundations included in this directory primarily make grants to multiple beneficiaries and derive the majority of their funding revenues from a single source, usually an endowment built from charitable gifts.

Community Foundations are public foundations made up of a considerable number of individual endowments managed by a single administrative body with all the funds pooled for greater investment return. As their name implies, community foundations usually have a very distinct and limited geographical area. Some of the individual funds are general purpose and discretionary; others are quite narrowly focused and may offer funds only for a scholarships or a certain group of organizations. The trustees are chosen from the public for a specific term. The board typically has full discretionary responsibility over some funds while some funds may be donor-advised and others directed to a particular agency or organization.

Other Giving Vehicles
There are many other types of philanthropic entities, such as federated funds (United Way), giving circles (these can be formal or informal), and organizations that don't fit into any of these other categories, but make grants (Junior League, Comprehensive Health Education Foundation).

For a glossary of terms in grantmaking, visit the Council on Foundations.