Philanthropy Basics

What is philanthropy?

The origin of the word “philanthropy” is Greek and means “love for mankind.” Today, philanthropy includes the concept of voluntary giving by an individual or group to promote the common good. Philanthropy also commonly refers to grants of money given by foundations and corporate giving programs to nonprofit organizations. Philanthropy addresses the contribution of an individual or group to other organizations that in turn work for the causes of poverty or social problems, improving the quality of life for all citizens. Philanthropic giving support a variety of activities, including research, health, education, arts and culture, as well as social services.
What is a foundation?

Grantmaking foundations are those organizations that use their resources primarily to grant funds to other entities in order to positively impact lives and the greater community through the organizations and programs they support, in areas such as education, health, scientific research, arts and culture, human services, religious organizations and the environment. Some funders also make grants to individuals, such as through scholarships or disaster relief.

Members of the Connecticut Council for Philanthropy include grantmaking institutions of every kind, and individuals. Go to CCP's Member Directory >>


Types of Grantmakers

Private independent and family foundations make grants based on charitable endowments. They generally do not actively raise funds or seek public financial support, since they have endowments from which to make grants.

Private family foundations are generally small, unstaffed organizations which strongly reflect the personal values and group dynamics of the donor's family and heirs. Identifying and articulating interests, finding time to administer an effective grantmaking program with volunteer trustees, supporting leadership in younger family members, and dealing with personal relationships in a business setting, are some of the issues which surface for these groups that are absent in other foundation settings.

Private independent foundations are distinct from private family foundations in that independent foundations are not controlled by the benefactor or the benefactor's family. Some of the largest private foundations in the United States are independent foundations, although they may have begun as family foundations.

Private operating foundations are private foundations that use the bulk of their resources to provide charitable services or run charitable programs of their own. They make few, if any, grants to outside organizations and, like private independent and private family foundations, they generally do not raise funds from the public.

Corporate (company-sponsored) foundations are private foundations that receive grantmaking funds primarily from the contributions of a profit-making business. Company-sponsored foundations often are closely connected to the donor company, but are separate, legal organizations, sometimes with their own endowment.  They are subject to the same rules and regulations as other private foundations.

Corporate giving programs are grantmaking programs established and administered within a profit-making business. Grants go directly to charitable organizations from the corporation. Corporate giving programs do not have a separate endowment. Their grants are planned as part of the company's annual budgeting process and usually are funded with pre-tax income.

Public foundations or grantmaking public charities, as defined by The Foundation Center, are nongovernmental, nonprofit organizations that:

  • receives funding from numerous sources and must continue to seek money from diverse sources in order to retain its public charity status;
  • is managed by its own trustees and directors;
  • operates grants programs benefiting unrelated organizations or individuals as one of its primary purposes'
  • makes grants, primarily to nonprofit organizations; and
  • is required to file a 990 form with the IRS.

There are several types of public foundations:

Community foundations seek support from the public and administer funds from a variety of donors in a defined geographic area (usually a city or town, but sometimes part or all of a state). They are governed by community representatives and, like private foundations, provide grants. Their grants primarily support the needs of a defined geographic community or region. Due to their broad public support, they are not considered to be private foundations. Go to Community Foundation Directory >>

Many women's funds are public foundations that create permanent endowments dedicated to programs that serve women and girls. They empower women to become philanthropists and participate in shaping the future of their communities. Go to Women & Girls Funds Directory >>

Donor Advised Funds are owned and controlled by a sponsoring organization and must be separately identified with reference to the contribution of a donor or donors. The donor or a person appointed by the donor is able to advise on the fund's investments or distributions, while the host institution takes care of the financial paperwork, including cutting the check and sending it to the charity or charities of the donor's choice.

Grantmaking Public Charities raise money each year to support groups of nonprofit organizations. Major grantmaking public charities in Connecticut include the United Ways, Connecticut Health Charities, the Arts Council of Greater Hartford and the Jewish Federations. Go to Grantmaking Public Charities Directory >>


Philanthropists:

Philanthropists are Individuals committed to independent philanthropic giving that promote the common good or improves human quality of life. The Connecticut Council for Philanthropy has recognized several philanthropists through the John H. Filer Award. View the list of John H. Filer Award recipients >>

 

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