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Defining Philanthropy

August 30, 2010

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Following up on my previous post on charity, and want to define philanthropy in hopes to highlight some of the important differences between the two forms of giving. Here you go:

Philanthropy:

Definition: Philanthropy is about the giving of time, talent, and treasure, but unlike charity, there is a possibility of return. Also unlike charity, philanthropy has more in-depth and partnership-based nature.

Attributes:

  • Where as charity focuses on treating more of the symptoms of a problem, philanthropy focuses more on the treating the problem or cause of the symptoms.
  • Philanthropy can be done both individually and through organizations.
  • While charity is more based in transactions, philanthropy is based in both transactions and setting up mutually beneficial partnerships between organizations and recipients.

Examples:

  • You: instead of giving to a theater or to a homeless shelter, in this case you might give money or time to an organization that looks to supports the arts at large or combat poverty in a variety of methods including the donation of money, but also setting up partnerships with organizations that can benefit from the improvement of these two aspects of society.
  • The Bill & Melinda Gates Foundation: The worlds largest philanthropic organization, looks to a four step process for its philanthropy (the following is quoted from their website: www.gatesfoundation.org):
  • Develop Strategy
    • Define the problem: Long before we make a single grant for any given issue, we listen and learn about problems that cause great inequity… As we learn about an issue, we ask whether we can make a difference with our money and our ability to bring partners together. We get involved only if we believe we can make a unique contribution.
    • Articulate the Strategy: For each opportunity, a program area considers its cost, the risk associated with it, its long-term viability, and, most important, its potential impact on people’s lives. Based on the answers to these criteria, and after extensive discussion, the program identifies a strategy, which includes a budget, the results they hope to achieve, and a plan to measure those results over the short and long term.
    • Develop an Execution Plan: Once we receive approval on a strategy, we develop an execution plan. To create this plan, we detail the “nuts and bolts” of how we will implement against our strategic goals. We develop a budget, identify grantees and likely grants, and set specific milestones and time frames.
  • Make Grants: Once we decide on a strategy, we consider grants that will support it. We look for partners who can carry out our strategy… Most of our grantmaking goes to large intermediary partners—organizations that in turn provide funding and support to those doing the work in the field. This lets us take advantage of expertise that others already have, and it builds up expertise among people in the field rather than simply on our staff.
  • Measure Progress: once we’ve made a grant, we expect the grantee to measure progress and report on the results.
  • Adjust Strategy: Measuring progress and impact is only useful if you’re willing to act on the results. Once we’ve gathered feedback, our program presidents and CEO decide whether to continue with the existing strategy or to make adjustments.
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