What is philanthropy?

“Philanthropy is…” (YouTube video)

Philanthropy is the voluntary donation of goods, money, resources, or knowledge to a cause or organization working to increase the well-being of humankind. Philanthropy reflects a diversity of donors in terms of race, ethnicity, gender, age, and income. Philanthropy takes many forms, from volunteering at a local women’s shelter to a multi-million dollar investment to eradicate disease in a third-world country. Anyone can participate and everyone can benefit from the results.

What is a grantmaker?

Grantmaking refers to giving money or resources. Grantmakers are people, organizations, or government agencies that give out monetary awards (grants) to nonprofits.

What is a nonprofit?

An NPO (nonprofit organization) is a tax-exempt entity designated a 501(c)(3) by the tax code. They can be a church, charity, service organization, or grantmaking foundation. When a surplus is created, the nonprofit must invest it to achieve their organizational mission, instead of distributing it as profit or dividends. Although they are called nonprofits, they must make a profit to be sustainable and remain viable in the community, especially during tough economic times.

Nonprofits provide 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

What is a foundation?

A foundation is a 501(c)(3) nonprofit organization that donates funds, technical assistance, in-kind donations, and volunteer time to other organizations. Foundations may also provide funding for their own programs to serve the public good. Foundations are often created with endowments which are money given by individuals, families, or corporations. They generally make grants or operate programs with the income earned from investing the endowments.

The IRS also has a definition of foundations. The IRS categorizes most nonprofit organizations into two broad categories:

  • private foundations
  • public charity

Both categories are nonprofit organizations under Section 501(c)(3) of the tax code. A public charity receives funds from a variety of donors, including the general public, while a private foundation is generally controlled by a single donor. These two types or organizations are regulated differently by the law. Private foundations operate under more restrictions than a public charity.

What is a regional association of grantmakers?

Arizona Grantmakers Forum is a regional association of grantmakers. RA’s promote the growth of effective philanthropy to serve their communities. They accomplish this by:

  • Supporting and strengthening all types of philanthropy in a specific region
  • Providing educational opportunities and resources to grantmakers
  • Providing networking opportunities among grantmakers and between grantmakers and grantseekers
  • Serve as a resource to members and the broader community on issues affecting philanthropy
  • Communicating the value of philanthropy to local, state and national policymakers and the media

More information

The Foundation Center: “Foundations and Their Role in Philanthropy”
Foundation Center: “Foundations Today Tutorial”