Philanthropy is the desire to promote the welfare of others and alleviate social problems, typically expressed with generous donations of money to great and worthy causes. Talent, time, and treasures comprise acts of philanthropy.
Philanthropic giving provides a sense of meaning and purpose that typically enhances a person’s happiness and life. It can also create a sense of optimism and social responsibility. Educational philanthropy represents the most significant amount of giving in America. Countless educational institutions, universities, schools, and colleges thrive on the charitable contributions of philanthropists. Charitable foundations focus on equity in education around the world.
Healthcare or medical philanthropy focuses on donating money, time, and resources to support healthcare causes that include, but are not limited to, research, hospital buildings and facilities, programs, technological advances, healthcare expense subsidies, and so much more. Institutional grant makers and high net worth donors contributed more than $20 billion to COVID-19 related efforts in 2020.
Environmental philanthropy focuses on sustainability, conservation, climate change mitigation, and other initiatives purposed to protect the environment. Philanthropy of the arts and culture is necessary to foster creativity, empower youth, and preserve culture. These efforts fund art exhibits, concert halls, creative arts programs, museums, and theatres.
Community philanthropy occurs when organized communities unite and combine resources to serve a cause.
The oldest form of philanthropy has been propelled by religious beliefs and convictions. For centuries, people of faith have offered their talent, time, and treasures to established and organized religious organizations.
The United States tax code encourages and rewards philanthropy. For the 2020 and 2021 tax years, taxpayers were allowed to deduct charitable contributions for up to 100% of the Adjusted Gross Income (“AGI”) for the respective tax years. Since tax year 2022, the allowable deduction for charitable contributions is 60% of a taxpayer’s Adjusted Gross Income (“AGI”). Deductions of charitable contributions provide significant tax savings to philanthropists and should be considered in the tax planning for each taxpayer who itemizes deductions.
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Nicole Michelle
Finance and Money Wiz
December 1, 2023
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