The terms charity and philanthropy are often used interchangeably. There’s no official rule. Certainly, the definitions intertwine in significant ways. But is there a difference? Does it really matter?
Well, fleshing this out offers clarity about where your funds are going, how they are being used and why if you give to one cause or another.
In general, one might say that a charity is a small local operation that gathers funds from within the community and helps the people who live there. A philanthropic organization, on the other hand, is a large corporate-like structure that is usually backed by millionaires, billionaires and corporate entities. It can have a national or global reach.
This can get complicated, however. For example, let’s say you live in a small town that has a food bank that provides groceries for food-insecure families in your town. They rely on local donations of cash and food products to operate. They may conduct local food drives. That sounds like a charity.
But now consider that your small-town food pantry may partner with an organization called Feeding America. This is the largest organization in the United States that supplies funding and food to local organizations in every state and thousands of towns.
Feeding America is a huge entity that’s more akin to an organization with a corporate structure. It relies on major donations from large corporations and philanthropic foundations to function.
Thus, Feeding America combines the structures of local charitable organizations with a national-level philanthropic model. It’s an example of how charity and philanthropy are aspects of one another.
It must also be said that philanthropy is a relatively new development in American society. It’s accurate to say that charities have always existed in western culture. For example, the most common form of charity was once offered by local churches. There were a few others kinds of charities as well, such as an orphanage.
However, the concept of charity on a huge scale developed in the late 19th Century and early 20th Century when super-rich industrialists emerged within our economic system. These would be people like John. D Rockefeller, Andrew Carnegie and Henry Ford. They made billions in oil, steel and cars respectively.
These industries made so much money, they literally didn’t know what to do with it so they created what might be called “super charities.” We recognize these today as philanthropic foundations.