Many people hear the terms charity and philanthropy and think they are essentially interchangeable. However, this is often not the case for those who spend their days working hard within the nonprofit sector.
The idea of giving back to our communities is not uncommon. People want to do good with their excess income, donating or supporting local charities and nonprofits. To help you increase your charitable giving this year, let’s look at the differences between charity and philanthropy.
Charity
Charity is most often defined by the need to do something good. It’s our emotional reaction to a tragedy or seeing someone in need. In other words, when you hear about the need in the world, you feel obligated to donate your time, funds, or items to help those causes.
Most often, charitable giving occurs on a short-term basis. For example, people donate food during a food drive or funds during a disaster relief program. There are exceptions to this rule, such as those who set up automatic and recurring donations to their favorite charities.
Most often, the term ‘charities’ is used interchangeably with ‘nonprofits.’ In both instances, they refer to an organization that has charitable, religious, educational, advocacy, welfare, or scientific goals to help. A nonprofit or charitable organization is also a 501(c).
Philanthropy
Where charity aims to provide aid through donations and volunteering, philanthropy seeks to make a longer-lasting change by targeting the causes of these issues. That isn’t to say that a philanthropist won’t volunteer or donate funds (the opposite, in fact), but they tend to be more careful in how their time and money are utilized.
For example, charity is donating funds in response to a natural disaster (as explained above). However, philanthropy is about taking a broader look at this natural disaster. Most philanthropists are working hard to create foundations that prepare for these events and do what they can to prevent them. It’s part of a longer-term goal to help people suffering.
Philanthropic donations usually come in the form of grants, which may or may not be part of a more extensive portfolio. In this way, philanthropists can maximize their contributions to ensure that they are best used.