American Philanthropy—Not Just a Handout, It’s Also an Investment

Ongoing charitable giving in the United States has always contributed to economic growth in society. Besides sustaining upward mobility and supporting diversity in our democracy, philanthropy throughout the centuries has been an investment in people, ideas, and facilities, all for the benefit of the greater good. Although most Americans do give to charity—nearly 90% in recent years—most people don’t begin to understand that the real function of philanthropy is not to help individuals, but to help society as a whole.

The numbers of people who give to charity are higher than the percentage of the population who watch the Super Bowl, and even higher than the number of people who vote during each election. Americans of all income levels, races, ethnicities, and education levels give, and 75% of the U.S. total comes directly from individuals, not corporations. Just over a third of all charitable giving goes to religious institutions, with the remainder going toward improving society. Voluntary contributions by American citizens help to advance the economic growth of our society by providing a third source of funds whenever government money and corporate investments are not available. This additional source of financing has resulted in a more energetic and innovative economy than most of the world’s other nations do not have access to.

For hundreds of years, philanthropists of all kinds have been responsible for important things happening in American society. For example, philanthropic donations supported the development of aviation, radar, and rocketry. We have also taken up the slack for funding important discoveries when other countries fell short. The Scottish doctor who discovered penicillin couldn’t secure funding from his government or private industry, he knocked on the door of John D. Rockefeller, and the rest is history. The young German scientists who designed the electron microscope were also failed by their own government and private support, so they also turned to Rockefeller. Their device completely transformed the field of medical research, leading to advances in life science and pharmaceutical developments that have revolutionized healthcare around the globe.

American generosity and a sense of civic duty and pride has effected profound change in American society, from citizens collecting funds to halt the spraying of DDT on Long Island to raising money to criminalize drunk driving. Some of the earliest stories of American philanthropy are hallmarks of history, such as the first colonists gathering together their moneys to buy slaves and free them, and set up the Underground Railroad. Many economists have written that for economic growth to happen, not only are natural resources or funds necessary, even more important are ideas. And ideas that fuel economic growth are readily born in a country where free men and women know they will be supported in pursuing their dreams and ideas. Philanthropy develops human capital, nurtures intellectual capital, and urges people onward to use more of their potential.

Many organized philanthropic efforts in America have achieved permanent placement in society. Habitat for Humanity, for example, has built and sold over 60,000 homes to low-income families at prices they can afford. The March of Dimes has collected billions of dollars that helped to triumph over polio and educate the first generation of Ph.D. microbiologists. Donations to the nation’s museums, hospitals, libraries, theaters, and private colleges not only provide numerous jobs, they also bring in revenue to local economies while providing education, entertainment, and enlightenment.

Many people believe that the United States has strayed from the original ideals envisioned by our Founding Fathers two centuries ago. Headlines every day trumpet stories of turmoil in government, strife in urban areas, shocking developments and economic woes, both temporary and long-term. But despite the constant change and upheavals that are part of society everywhere, Americans still have deep pockets and are more than willing to dig in and contribute to causes they consider worthy and noble. Despite the numerous changes that have taken place in America over the past two centuries, the philanthropic heart of Americans has not changed and never will. The ideals envisioned by the Founding Fathers of our country are still alive and well.