What is Philanthropy?

I’m on vacation this week. This post originally appeared on October 20, 2006. When I started Tactical Philanthropy, Phil Cubeta welcomed me to the blogosphere and immediately initiated a debate. No cutting slack for the newbie, huh Phil?

What is Philanthropy?

Thanks to Phil Cubeta for highlighting my new blog today.

In my earlier definition of Tactical Philanthropy I stated:

"Philanthropy is at its core a series of financial transactions."

Phil takes (polite) issue with my definition, saying instead:

"Let me say that to me philanthropy at its core is a personal, moral, and political (in the largest sense of serving the polis or community) act, virtue, or way of being in the world.  Sometimes philanthropy is financial. But giving can be of time, attention, talent, or even of one’s own blood, as in giving blood, or shedding blood in a good cause.  Philanthropy at its core is a civic virtue. That said, unacted virtue, or virtue that acts ineffectively, is imperfect. Financial giving is indeed a financial transaction, or set of tools. The tools are tactical. They should answer strategic ends, and the strategies should answer to vision. And the whole ensemble should create life, energy, and disproportinate results, as when a gift sparks a cultural movement, or inspires a whole community to come together around an issue.  Giving, indeed, "transforms reality."  Some of that is "results," in the sense of metrics. But reality also changes when a businesslike donor who is all about money, metrics and results, puts her glasses on the table, looks out the window, and says, "You know, I set out to set others straight, to fix others, to help them. And now after these last few months face to face with those in need I see how blind I was, how out of touch, and how arrogant.  I have learned more and gained more from those I help than they ever have from me.  I only wish I could do more. Can I?"

I think that Phil is right, that philanthropy is not simply a financial act and that any financial tactic must serve a strategic need. You may be able to execute a highly leveraged financial gift, but if it goes to an inefficient nonprofit, or one that does not support your world view, the tactic goes to waste.

The word Philanthropy is a word whose definition is somewhat vague. The Merriam-Webster dictionary defines it as:

"Active effort to promote human welfare"

The blog Giving Back posted a good discussion of the definition back in August that looked at both expansive and more limited definitions. I should probably be clear about my definition.

To me, philanthropy describes the practice of passionate giving of capital resources. When I use the word, I’m not referring to volunteer work. But don’t take that as any slight to volunteers. I’m an owner of a small business and so I know full well that success in any endeavor requires both capital and labor resources and neither is more valuable than the other since neither resource has any value at all without the input of the other.

When I think about my business, I don’t think of it as a "series of financial transactions". I’m not in business simply for financial reasons, and my goals are not simply financial goals. Too often when people analyze businesses they fail to fully understand that business is more than just financial transactions.

Philanthropy faces the opposite problem. Too often people fail to realize that giving is a financial transaction and instead focus on the greater purpose for which they give. When I state that philanthropy is at its core a series of financial transactions, I do so to remind people that no matter how much you care about a cause you can help them far more if you tactically approach the gifting process and recognize it as the financial transaction that it is.

However, let us not lose sight of the greater purpose of of philanthropy. It is not only a financial transaction. It is certainly not just a tax deduction. A philanthropic gift is a exercise in being human. It is a action whose most important purpose is to make the world a better place.

May we all leave the world a better place than we found it and may we all make use of the most effective techniques when we choose to give back so that our passion is not diluted by inefficient actions.


  1. M says:

    I know you are focused more on the financial side of philanthropy, but my preferred definition goes far beyond that.

    My favorite definition comes from Robert Payton. He was one of the founders of the Center on Philanthropy at Indiana University. He defines Philanthropy as “voluntary action for the public good.”

    I like this definition because it includes both formal philanthropy (things that are the archetypal western traditional forms of philanthropy such as charitable donations, formal volunteer programs, etc.) and informal philanthropy that is more common in other parts of the world.

  2. That’s a good definition. I needed to define the word as I use it on this blog, which is why my definition is rather narrow. When definitions are very broad, they begin to lose meaning.