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Anyone can be a philanthropist and be more effective
at making a difference. Here’s how.
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.
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.
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: Nearly 36 million American households itemized their giving, according to the most recent data available from the National Center for Charitable Statistics. Additionally, many people volunteer instead of or in addition to what they contribute financially. According to this study on volunteerism, nearly 80 percent of Fidelity Charitable's donors had volunteered in the previous 12 months. Among those volunteers, more than two-thirds (67 percent) gave 50 hours or more of their time.
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:
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 like Boost Your Giving IQ provides worksheets and other tools for those interested in smarter giving. These tools can help you decide what’s important to you and then create an action plan that maximizes your resources.
Additionally, you may be able to give more to your charitable mission by using specific financial strategies, such as contributing long-term appreciated securities instead of cash or setting up a donor-advised fund. And some donors set up giving 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.
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 the future of philanthropy.
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: