Philanthropy as society currently understands it did not fully develop until the early twentieth century. The word philanthropy is derived from Greek, and its literal meaning is “love of humanity.” Ancient Greeks thought of philanthropy as an ideal to attain—one studied to become the best version of oneself in order to benefit all of humanity.
The modern understanding of philosophy began to take shape in England during the Age of Enlightenment. The ideas that developed from the Age of Enlightenment influenced wealthy and influential members of society. As individuals recognized the need for charity, the first charitable organizations were formed.
The Beginning of Philanthropy in America
One of the most important figures in American philanthropy is Andrew Carnegie. He was one of the first (and wealthiest) Americans to extol the virtues of philanthropy. Along with Margaret Olivia Slocum Sage and John D. Rockefeller, Carnegie created the blueprint for what modern philanthropy looks like. Carnegie believed that wealthy individuals should use their money to benefit society as a whole and ease tensions between the rich and the poor. (Read this post to learn more about Carnegie.)
In 1913 the Revenue Act established federal income tax. The act also exempted certain organizations from tax such as charitable or educational institutions. In 1935 a new revenue act raised taxes on wealthy individuals and corporations. However, the act also increased the number of deductions corporations could make for philanthropic contributions. At the moment the maximum deduction that corporations can make is 20 percent. It was only 5 percent in 1935.
Today many of America’s wealthiest individuals are also the country’s biggest philanthropists. For example, Bill Gates, Mark Zuckerberg, Larry Ellison, and Michael Bloomberg have either donated large sums to different philanthropic causes or have made commitments to do so over their lifetimes. It’s also common for sports stars and celebrities to routinely donate large sums of money to charities or create charitable organizations.
In general, modern philanthropy is viewed as a benevolent practice. However, there are some common criticisms that are worth mentioning. For example, some feel that the government should be in charge of dealing with social issues—not wealthy individuals or nonprofits. Others believe that philanthropists have too much power; they are able to influence society with their wealth in a way that regular individuals can’t. This article does a good job of refuting twelve of the most common criticisms, and it’s definitely worth reading.
If you are interested in learning more about the history of philanthropy in America, the following books are worth reading: