The History of Philanthropy

During the early days of philanthropic activity in the United States, the practice was primarily religious. Hebrews gave a portion of their income to the gods, and many Chinese families gave monetary allowances to the elderly. In the middle of the 19th century, philanthropy became more secular. Philanthropic endeavors focused on providing education and religion to the people of the United States.

During the first half of the 18th century, the American colonies experienced a social movement called the “Great Awakening,” which was fueled by religious revivals. Philanthropists such as Cotton Mather promoted philanthropy in the colonies. In addition to education, many philanthropists supported free higher education for poor children.

During the Civil War, philanthropy provided supplies to the troops. In addition, religious organizations attempted to supply spiritual care to troops. Philanthropic activities also helped provide care for mentally ill people. There was also a strong focus on improving the public school system.

During the early part of the 20th century, philanthropy started to focus more on scientific advancement. Many of the philanthropic projects were unpopular, and many people believed that the money philanthropists gave should not be accepted by institutions. However, the political leaders in the United States started to see the importance of philanthropic activity.

The first American philanthropists were Native Americans, and many of them were concerned with the common good. Native American cultures were deeply involved in helping others, and philanthropic activities were a way for the natives to improve their communities.

After the Great Depression, philanthropic activity was considered a political risk. The government feared that some philanthropists and foundations could fund anti-American activities. This fear resulted in a Congressional investigation into foundations. Although the investigation found no evidence to support the accusations, the philanthropic activity was still questioned by the public.

After World War II, philanthropic efforts became more important because the government was no longer able to provide social services to the needy. In addition, the economy declined, and individual giving declined. Several nonprofit organizations were forced to cut their budgets. The government hoped that private giving would make up for the decline in government funds.

The tax reform act of 1969 required foundations to spend six percent of their income for philanthropic purposes. This law also made it illegal to use foundation funds to influence legislation. In addition, the Internal Revenue Service expanded auditing of tax-exempt organizations. This helped discourage abuses of charitable giving. In the early 1980s, the federal government cut social welfare programs, and state and local governments bought services from private organizations.

In the 1960s, the focus of philanthropic efforts was on poverty and urban issues. In addition, 18 percent of foundation grants focused on race issues. However, the economic recession reduced the value of foundation assets.

By the end of the 1960s, many philanthropists were no longer dealing with the neo-anti-socialist paranoia that had plagued philanthropic activity during the 1950s. The public also no longer believed that only grand donations would make a difference.