Philanthropy is defined as selfless acts of kindness that are intended to help others and it plays an important role in global development, according to international organizations. Between 2016 and 2019, the combined efforts of private philanthropy directed towards the development of the 205 foundations analyzed in the latest OECD report amounted to US$42.5 billion. However, despite the majority of people welcoming philanthropy, one in three still believe that rich people – the core of philanthropic donations – are not necessarily good for society. This article defines philanthropy, highlights certain facts and statistics related to it, and reflects on the ‘philanthropic’ paradox.
What is philanthropy?
Philanthropy is the individual or collective charitable efforts undertaken to help those in need or to contribute to the socio-economic development of a community. Philanthropic initiatives may include donating capital, technology, or know-how or may involve volunteering personal time, effort, or knowledge to a good cause. During the last few decades, an increasing number of wealthy individuals and organizations have established numerous philanthropic foundations that carry out altruistic missions around the globe.
As of 2018, there were approximately 260,000 foundations globally, the majority of which were focused on improving education.
Private philanthropy and international development
In the context of the international development and cooperation sector, private philanthropy refers to the transactions initiated by the private or non-profit sectors that aim to promote research, education, and the economic growth of developing countries with the funds dedicated for philanthropic contribution usually originating from foundations. It is important to note that many international donor organizations, such as the United Nations and the Organization for Economic Co-operation and Development (OECD), recognize the important role that private philanthropy is playing on the route to fulfilling the 2030 Agenda for Sustainable Development.
In December 2021, the OECD released the second edition of the ‘Private Philanthropy for Development’ report that provides new data and updated analyses of private philanthropic flows to developing countries. For this publication, the OECD invited more than 400 philanthropic organizations to participate, out of which 205 foundations agreed to contribute and therefore feature in the resulting database. Some of the key facts and statistics highlighted in the report include:
Fig.1. ODA flows vs Private Philanthropy flows (billion US$, total for the 2016-2019 period)
The ‘philanthropic’ paradox
While philanthropy is supposed to represent selfless acts of kindness that are intended to help others and make the world a better place, when taking into account specific trends relating to the distribution of global wealth, others may have certain different opinions when reflecting on philanthropy. Thus, the ‘philanthropic paradox’ emerges whereby people agree that overall philanthropy is a positive phenomenon and improves society but, at the same time, it should be considered that those who do donate are not necessarily good for society as a whole.
Take for instance the fact that the number of billionaires in 2021 was 2,755, or 660 more than in 2020, while the overall wealth managed by those rose to US$13.1 trillion or US$8 trillion more than a year before. In the United States, for example, the current tax legislation allows individuals and organizations to deduct their charitable contributions from their tax obligations. Nevertheless, it seems that charitable tax deduction is set up in such a way that does not allow lower-income Americans to take advantage of it. Moreover, when digging deeper it becomes clear that philanthropy does not necessarily involve the transfer of capital from the rich to the poor as the largest donations often go towards supporting the elite universities and schools that the rich themselves had previously attended or to support the arts.
See also: Global inequality – facts and statistics
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