2.1 Giving and philanthropy

At a glance

About 40 minutes, including a 15-minute reading. By the end of this lesson you will be able to

• explain why people give, using the idea of the gift

• distinguish charity from philanthropy and describe seven criteria of philanthropy

• describe the main types of foundations and the debate about philanthropic power

A neighbor gives time, a company donates money and a foundation funds policy reform. All three may be philanthropic, yet they use different resources and carry different kinds of power. To decide what makes a gift philanthropic, we will move from personal motives to social relationships, and then to the public influence of large foundations.

Why people give

Sociologists see the gift as a social institution. Giving creates obligations to receive and to give back, so gifts build and sustain relationships, and through them communities. Economists add another lens. Some giving is utilitarian, a way to gain reputation or the good feeling of having helped. Some is altruistic, focused on the needs of others. Most giving mixes the two.

Research links giving with awareness of need, personal values, religious practice, education and opportunities to give. Patterns by income, age, gender and household status vary across studies and countries, so they should not be treated as universal rules. Donors may also receive emotional satisfaction, social connection or recognition. These benefits do not make a gift insincere, but they remind us that motives are often mixed.

Charity and philanthropy

Mixed motives tell us why people give, but they do not yet tell us what kind of change a gift is meant to produce. The familiar distinction between charity and philanthropy offers a starting point.

Charity and philanthropy are often presented as opposites, but practice is better understood as a continuum. Emergency food and disaster aid meet immediate needs. Long-term work on education, livelihoods or policy may address causes. Many organizations do both, and immediate relief can be a necessary part of structural change. The distinction is useful when it clarifies purpose and time horizon, not when it ranks one form of giving above another.

Seven criteria of philanthropy

Figure. Jung's seven criteria treat philanthropy as a practice open to individuals, groups and organizations. Notice that resources include time, skills and relationships as well as money.

Tobias Jung, writing for the Japan NPO Center, sets out seven criteria that capture what philanthropy is. Two of them widen the usual picture. The resource criterion says philanthropy can use any private resource, summed up as the four Ts of time, treasure, talent and ties. The ecosystem criterion says anyone can do it, alone or with others. Together they suggest that philanthropy is open to everyone, whatever their wealth. Jung combines the seven criteria into one definition, in which philanthropy is the voluntary, strategic and intentional use of private resources, without expecting a material return, to improve the wellbeing of society.

Foundations

That broad definition includes everyday acts of giving. It also includes institutions that concentrate resources and can shape public priorities on a much larger scale.

A foundation manages donated assets and uses them for public purposes. Some give grants, some operate their own programs, corporate foundations are linked to businesses, and community foundations pool local resources. The type matters because it affects where the money comes from, who governs it and how closely the foundation is connected to a community, company or government.

The power of big philanthropy

Some wealthy donors and technology companies apply business methods to giving. This approach, often called philanthrocapitalism, emphasizes investment, measurement, scale and market-based solutions. Supporters argue that private funders can take risks and act faster than public bureaucracies.

Critics ask whether private wealth should carry such influence over public priorities. WHO reports that philanthropic foundations provide nearly 10% of its funds, predominantly through the Gates Foundation, while the Foundation was also among the largest voluntary contributors to WHO's 2024–2025 budget. Rob Reich argues that large foundations can shape policy without the accountability expected of elected institutions. The issue is not only how much they give, but who sets the agenda, who participates in decisions and how the public can question those choices.

Newer forms of giving include venture philanthropy, spend-down foundations that aim to use all their assets within a set time, donor-advised funds, giving circles that pool members' money, and online giving through crowdfunding platforms.

Example. Philanthropy in Japan

Jung wrote his criteria for a Japanese audience. In Japan, philanthropy is often associated with the very rich and with large companies. His broader view, in which anyone can give time, money, skills or connections, suggests philanthropy could help with challenges such as caring for an ageing population, reviving rural areas and protecting the environment.

Read

• Jung, T. (2024, October 21). To unlock philanthropy's potential for Japan, we need to understand its meaning. Japan NPO Center. https://www.jnpoc.ne.jp/en/insights/to-unlock-philanthropys-potential-for-japan/

The article is free to read and takes about 15 minutes. As you read, note which of the seven criteria surprises you most, and whether giving in your own community meets them.

Go further, with library access. Reich, R. (2018). Just giving. Why philanthropy is failing democracy and how it can do better. Princeton University Press.

Try it

Now bring the two parts of the discussion together. For each case, decide whether it is closer to immediate relief or long-term change, which of the four Ts it uses and whether the giver expects a material return. Then open the answers.

1. A company matches its employees' donations to an earthquake relief fund.

2. A retired teacher tutors children from low-income families every Saturday for several years.

3. A foundation funds a ten-year program to change how rural schools train teachers.

4. Neighbors share their contacts to help a young person from the area find a first job.

5. A department store gives a share of sales to a charity in exchange for promoting its brand.

Key takeaway

A gift becomes easier to understand when we ask what resource is given, what change is intended, what return is expected and who gains influence. Philanthropy is therefore open to anyone, while very large gifts still require scrutiny because generosity and public power can grow together.