October 16th, 2015

Charity and Philanthropy: Different Sides of the Same Coin


Philanthropy means far more than simply having a large bank account, it means using your resources – whatever they may be – to the make the world a better place by tackling its problems at their roots. It is NOT limited to the wealthy.

Charity, describes operating with a “direct impact” or with a hands-on response to the immediate needs – food, shelter, health care and the like. It’s commendable and necessary.

Each of these methods of solving problems is not greater than the other; they are overlapping strategies that come from the same motivation and share the same goal.

The difference lies in the method that philanthropic entities and charitable entities use to reach that outcome. Charity refers to the direct relief of suffering and social problems. Philanthropy systematically seeks out root causes of these issues and endeavors to find a solution. As John Rockefeller said, “The best philanthropy is constantly in search of the finalities—a search for a cause, an attempt to cure evils at their source.”

The metaphor often used to illustrate this difference is that of giving a man a fish (charity), versus teaching him to fish (philanthropy).

Let’s look at this deeper through the issue of homelessness. A philanthropic organization dedicated to eliminating the problem of homelessness might take a multi-pronged approach, looking at:

• the reasons individuals lose their homes and

• working with organizations to try and come up with solutions.

Using that information they then may fund:

• substance abuse clinics,

• job training centers,

• veterans organizations or

• mental health advocacy programs, trying to keep people from being in a position where they could ever lose their home.

These philanthropic strategies, however, could take a long time to be effective and, meanwhile, there are people suffering on the street without a home. It is at this point that a charitable organization, such as a homeless shelter, can step in to address the immediate needs of the homeless.

That being said, a philanthropic entity might very well include some direct service agencies as part of a program to address the causes for individuals losing their homes. Likewise, employees at a homeless shelter might work with residents on job applications or refer them to counseling programs to help the homeless individuals help themselves. So in reality, both kinds of organizations attempt to address both the immediate and long-term needs of those in need of assistance.

Proponents of philanthropy believe that permanent solutions to social problems come from strategic, large scale and collaborative efforts, but they should not discount the importance of the charitable organizations working on the ground to relieve dire and pressing human concerns.

Just as charities depend on funding from philanthropic entities to continue their work, philanthropic institutions look to charities to inform and direct their own efforts.

Your Community Foundation does the reading and research, the acquiring information and thinking critically about the needs of our community. Please think about how to use your professional advisor skills and resources to advocate with your clients for a charitable giving and/or a philanthropic strategy to solve larger social problems. We’d like to be your partner in making these charitable and philanthropic connections.