America in context

Philanthropy in the U.S.

How did philanthropy come to play such a key role in providing essential elements of life in the United States? According to the Council on Foundations, charitable giving in the United States has strong roots in religious beliefs, in the history of mutual assistance, in the democratic principles of civic participation, in pluralistic approaches to problem solving, and in American traditions of individual autonomy and limited government.

Approaches to Giving
Robin L. Yeager

A list of U.S. foundations and major benefactors reads like a Whos Who of American history, society, and industry. Leaders in the fields of business and industry, entertainment, and sports use their fame and their personal wealth to create and underwrite projects throughout the world.

Robert H. Bremners American Philanthropy, was written as part of the Chicago History of American Civilization, remains the premier reference on the subject. In his introduction to the text, Bremner defines the goal of philanthropy as the "improvement in the quality of human life. … to promote the welfare, happiness, and culture of mankind." What role, then, does philanthropy play in U.S. society? Again, according to Bremner, "Voluntary benevolence has played a large role and performed important functions in American society. … It has been one of the principal methods of social advance. … The record of American philanthropy is so impressive that it would require several lengthy volumes to list its achievements. …"

While large foundations distribute thousands of millions of dollars for causes across the United States and the world, individual Americans regularly donate more than seven times as much through their personal gifts, bequests, and contributions to causes they, themselves, have chosen. Donations to charity can come from a variety of sources—from corporations, from individuals, and from communities of people. Many different organizations, including social groups, sports teams, service organizations, religious institutions, and groups of individuals with some shared concern, such as a love for animals or desire to address a particular social issue, can work together to support a specific charity or a variety of charitable causes. Clubs, teams, and other groups sell items or otherwise raise money to support philanthropic activities. This article highlights various approaches to philanthropy in the United States.

Corporate Philanthropy

Small and large businesses in the United States regularly support philanthropic projects, whether by donating snacks for a school event, allowing an employee to use work time or resources to help a good cause, or making a financial contribution to a charity. In the United States, such support is an expected part of being a good corporate citizen.

Businesses engage in philanthropy for a variety of reasons. A primary reason is that a business—really the leaders of the business—believe in a certain cause and are happy to direct resources toward it. There are other reasons as well. Helping the community allows a businesss employees to feel pride in their employer and a personal connection to the efforts of the company. This raises employee morale and engenders a sense of affiliation with the company. Another reason is appreciation from the recipients and the community at large: Helping is good public relations. Finally, with the system of tax incentives created by the U.S. government, the "sting" of any financial contribution is at least partially offset by a corresponding tax break. As in the Microsoft case study below, donations by corporations can be of funds, of volunteer or professional services, or of products or materials. Donations of goods and services are often called in-kind contributions.

Case Study—Microsoft: In 2005, Microsoft as a corporation gave charitable causes $61 million globally in donated funds, as well as $273 million in donated computer software. Of this amount, $19.4 million and $4.4 million in donated software went to charities in the Puget Sound region of Washington state, where Microsoft has its corporate headquarters. In all, Microsoft supported 9,201 different charities worldwide, including funding from the Microsoft matching-fund program, which matched $20.6 million in private donations made by Microsoft employees in 2005, thus doubling employees gifts to the charities of their choice.

Foundations

Corporations and the estates of corporate leaders or other wealthy individuals may establish a foundation—or an endowment to support a particular cause or a range of key interests. Individuals may also choose to create a foundation. While many wealthy people make direct, individual donations to causes that they particularly support, many, and especially those in the public eye, may also choose to establish a foundation to handle their contributions. This shields a prominent person from direct appeals for support and allows large funds and endowments to be professionally managed.

Case Study—The W. K. Kellogg Foundation: One goal of the W.K. Kellogg Foundation is to link poor and rich, informal and formal executives, and social activists and business leaders. Through programs sponsored by the foundation, communities address challenges caused by the imbalances between the "haves" and the "have-nots." According to the foundations Web site (http://www.wkkf.org), "WKKF creates social spaces where people from different sectors of society can come together and share their vitality and creativity. As philanthropists, we want the community to utilize knowledge and energy from all sectors."

I Gave at the Office—or the Religious Institution, or the Market, or…

Because making giving easy increases contributions, charitable organizations and others have adopted a number of practices to encourage philanthropy. While they operate in different ways, with different degrees of formality, the common elements of these practices are that they provide information to potential donors about possible charities to consider, they allow people to feel comfortable that their contributions will get to the intended recipient, and they assure people that by working together, the resulting donation will be large enough to make a measurable difference.

Through office-wide, community-wide, or other institution-wide campaigns, people can arrange to make automatic contributions to the charities of their choice. Contributions can be made at work by having part of ones salary sent directly to a nongovernmental organization, or at church, when the church designates a percentage of all donations to certain causes, or through one-time donations for special projects. In the credit card age, it is increasingly common to make donations this way, especially for major fund-raising efforts for which donors can arrange for regular, periodic payments to be charged against their accounts. Through these larger, combined gifts, donors can identify a particular accomplishment their donation has brought about or can exert some influence on how the donation will be used. And they can celebrate with others the progress that is being made.

Case Study—The United Way of America: The United Way is an umbrella organization that accepts monetary donations and distributes them to a wide range of member charities. In the 2004-2005 season, the United Way raised more than $3.6 billion.

The United Way conducts an annual campaign during which working people are able to select charities and enroll in an automatic payroll-deduction payment system that sends a certain number of dollars from their salaries to the charities on a regular basis. The United Way system publicizes charities with which an individual might otherwise not be familiar, provides a vehicle for transferring the funds, and allows an employer to see the combined impact of the employees contributions. Some corporations match their employees contributions, which creates a double benefit: When an employee donates $1, the company makes a matching donation, resulting in $2 going to a charity. Donors can designate their contributions for a specific charity, such as the local American Red Cross, or the donations can be undesignated, allowing United Way leaders to decide how to distribute the funds. Information about United Way of America is available at http://national.unitedway.org/, from which information on local United Ways can be accessed.

Power in Numbers

According to the Giving Forums New Ventures in Philanthropy, people increasingly are coming together in groups called giving circles. Members of a group, or circle, combine their charitable donations and decide collectively how to distribute the "pool" of money to worthy causes.

Working collectively encourages people to meet their pledged donation, to feel informed about the programs being supported, and to feel that they are making a big enough donation to make a difference or send a message. This collective empowerment appeals to many audiences, and it is especially popular with womens groups, ethnic groups, and those who fall into the "new donor" category. There are more than 200 circles in at least 40 U.S. states. Community foundations are examples of an older form of this collective charity.

Case Study—The Cleveland Foundation: The first community foundation, the Cleveland Foundation, was formed in 1914 when a Cleveland, Ohio, banker and attorney, Frederick Goff, had a revolutionary idea—an idea that changed the face of philanthropy in the United States and became the footprint for nearly 600 community foundations worldwide. His idea was to establish a foundation in which charitable individuals could contribute permanent funds that would be distributed in the form of grants for the betterment of their community. Some 90 years later, the Cleveland Foundation is one of Americas largest community foundations and continues to be a pioneer in the field of philanthropy, with assets of $1.6 billion. In 2004, the foundation distributed more than $86 million to nonprofit organizations, mainly in the greater Cleveland area, for projects in a variety of areas, including health care, education, economic development, conservation, and the arts.

Heroes and Role Models—Philanthropy by Celebrities

Entertainment and sports celebrities are increasingly vocal and visible in their support for charitable programs. Images of stars visiting poor or devastated places, helping raise funds for a humanitarian cause, or making some sick childs dream come true are so frequent that Time magazine dubbed 2005 "The Year of Charitainment." Celebrity names and faces, as well as their often considerable fortunes, bring attention and support to causes, while providing the stars with a way to tell their fans and critics that they are more than the characters they portray, the clothes they wear, or the publicity events they attend.

Searching the Internet for a celebritys name is likely to result in examples of that persons charitable activities. The Foundation Center lists famous current and historical philanthropists (http://youth.fdncenter.org/youth_celebrity.html), while Look to the Stars (http://www.looktothestars.org) tells of 160 celebrities activities in support of a variety of charities. The site is updated regularly. On one recent day, the top 10 featured celebrities included the international grouping of George Clooney, Bono, Jude Law, Oprah Winfrey, Elton John, Jackie Chan, Kate Moss, Ewan McGregor, Robbie Williams, and Bob Geldorf. Celebrities top 10 charities were identified as Make Poverty History, ONE Campaign, Clothes Off Our Back, UNICEF, Luke Neuhedel Foundation, RADD, Amnesty International, the American Red Cross, St. Jude Childrens Research Hospital, and Oxfam.

The Sports Philanthropy Project, which tracks and encourages philanthropy by all levels of the sports professions—leagues, teams, owners, and players—hosts an annual conference as part of its work. The Legacy League (http://www.thelegacyleague.com) works with individual players to establish foundations or charitable programs of particular interest to that individual. The Sports Philanthropy Project can be found athttp://www.sportsphilanthropyproject.com.

Case Study—NBA Cares: With a focus on addressing important social issues, especially programs supporting education, health-related causes, and youth and family development, NBA Cares is the U.S. National Basketball Associations global community outreach initiative. NBA Cares involves many programs and activities. Read to Achieve is just one example. This year-round program aims to help young people develop a love of learning and encourages adults to read regularly with children to support this goal. NBA Cares estimates that the program reaches 50 million children each year—the most extensive educational outreach in the history of professional sports.

Case Study—Oprah Winfrey: Media mogul, philanthropist, and television entertainer viewed daily by millions of Americans, Oprah Winfrey not only contributes extensively to charity through her own foundation, but helps causes in other ways through her television program.

Programs aired this year showcased actor George Clooney and his activities to publicize the horrors faced daily in Darfur. Lisa Ling was featured discussing the plight of child soldiers in Uganda, and actress Meg Ryans trip to India for CARE was reported, as was the work of actress and goodwill ambassador for the United Nations High Commission on Refugees Angelina Jolie on behalf of Darfur. In May 2006, Oprah joined Bill and Melinda Gates as they toured U.S. high schools underwritten by their foundation. Celebrity attention to issues raises the attention of the public and encourages them to find out more, become involved, or make a contribution. Oprah regularly uses her show to provide such access.

Youth Programs: Instilling Habits, Passing Along Traditions

According to Council of Michigan Foundations and its collaborators in developing the Learning to Give curriculum, leaders from emerging democracies often come to the United States with a relatively surprising question. They want to know how they can create a third sector in their countries, how to teach democratic and philanthropic principles to their children, and how to pass on the tradition of private citizens working for the common good. These questions are difficult to answer because, in many cases, these concepts have mostly been taught informally. There has not been a formal curriculum for teaching the facts or inculcating the values of the nonprofit sector.

Despite this lack, instilling in the next generation a commitment to helping others has been an important goal of many who work with youth. Groups such as the Boy Scouts, the Girl Scouts, 4-H, the Boys and Girls Clubs of America, religious organizations, school civics or service curricula and extracurricular clubs, service organizations, sports teams, and others offer young people examples of volunteer service and giving, as well as opportunities to engage in these activities themselves. Community agencies, from hospitals to the American Red Cross to libraries and playgrounds, often have youth volunteer activities. Through all these programs, young people get to identify causes; choose, plan, and carry out projects; and see the results of their labors.

Case Study—Americas Promise—The Alliance for Youth: Americas Promise is an alliance that brings together communities, individuals, companies, and organizations from all sectors to improve the odds of a good life for children and youth.

Americas Promise—The Alliance for Youth was founded following the Presidents Summit for Americas Future in 1997, at which Presidents George H.W. Bush, Jimmy Carter, Bill Clinton, and Gerald Ford—with Nancy Reagan representing President Ronald Reagan—challenged the nation to make children and youth a national priority. President George W. Bush reaffirmed that commitment in 2001. Retired Army General Colin L. Powell became Americas Promise founding chairman, serving in that capacity from 1997 until 2001.

The mission of Americas Promise is to strengthen the character and competence of Americas youth. Americas Promise wants to see every child in America have the fundamental resources he or she needs to be ready for the future.

Individual Donations

While a tremendous amount of money is donated by foundations and corporations, much more—some years as much as seven times more—is donated by individuals. Individuals, like corporations or groups, can make direct monetary donations to a cause, or they can donate material and equipment, or they can serve as volunteers. Their gift may be making a charitable organization a benefactor of their estate. They may choose to frequent businesses that promise to support certain causes or that give "credit" to local schools or other groups based on purchases by local patrons. One individual may support a fund-raising effort for cancer research by volunteering to run in a race, while another individual supports that cause by agreeing to donate money for every mile the volunteer runner completes. Individuals volunteer for an unlimited number of projects and organizations, freely sharing themselves to support every segment of U.S. society.

Case Study—Jennifer Stobbe, Doctor of Veterinary Medicine: In the aftermath of Hurricane Katrina, volunteers rescued hundreds of animals, including a disreputable looking dog, from the dangerous and dirty floodwaters of New Orleans, Louisiana. Since the dog was suffering from heartworm and from skin and other infections, had lost lots of hair, and was nearly starved, the volunteers first named the animal "Mangy Dog." She was taken to a camp run by Arkansans for Animals, where she met Jennifer Stobbe, a veterinarian from Mississippi who had gone to Arkansas with her staff to help in the camp. Dealing with heat, humidity, and sick and scared animals, the staff did their work in tents at the makeshift camp. There, Mangy Dog and hundreds of other animals received food, medicine, and a safe place to sleep. Thanks to Stobbe, more than 50 of the dogs were transported to Mississippi, and eventually to groups in Virginia and Maryland who had offered the dogs homes. After her rescue and transport to a new home more than 1,600 kilometers away, Mangy Dog met others who addressed her health problems and, more importantly, gave her a new life and a family. Now settled in the home of one of this journals editors, Mangy Dog (renamed Katy, for Katrina) is happy, healthy, beautifully furry, and very grateful to all those who made her rescue possible.

Additional Readings:

Giving: U.S. Philanthropy, An Electronic Journal of the U.S. Department of State, May, 2007.

Index of Global Philanthropy. Hudson Institute Center for Global Prosperity. Washington, DC, 2006.

About the Author:

Robin L. Yeager is a staff writer with the U.S. Society and Values Team, Bureau of International Information Programs, U.S. Department of State. She is a former administrator and trainer for nonprofits.