Types of philanthropy

A wide spectrum of approaches may be applied to philanthropy. Some current trends have already been discussed in previous sections; other approaches are described below.

Social Entrepreneurship 

Some individuals use entrepreneurial principles to tackle particular challenges in society. These social entrepreneurs often take innovative approaches to solving particular societal problems. Organisations which support social entrepreneurship typically offer financial support and access to a support network.

Corporate philanthropy

Companies are increasingly aware of their responsibilities to the communities in which they work. Many are now engaging in corporate social responsibility programmes, including setting up stand-alone charitable foundations as an effective vehicle for corporate philanthropy.

Giving Circles

The concept is as simple as it is powerful. A Giving Circle is formed when individuals come together and pool their funds, decide together where to give the money (and perhaps volunteer time or expertise) and learn together about their community and philanthropy. No Giving Circle looks or acts exactly like another. Indeed, the opportunity to shape a group to meet the particular needs of a community and the particular interests and capabilities of donors remains one of the most appealing aspects of a Giving Circle.

Grant-making philanthropy

Philanthropic organisations that adopt this approach will typically have grant rounds in which organisations submit proposals for funding. Directors, trustees or an advisory group decide which proposals to fund, based on pre-defined criteria and the potential impact.

Social finance

Social finance involves lending money with the primary purpose of achieving positive social change. Money is lent to individuals or organisations where it is felt that the money will achieve positive social impact. The money is paid back, with affordable rates of interest.

Community Foundations

Community foundations are non-profit institutions that mobilize and invest technical and financial resources in a specific geographical area. Their goals are to improve the quality of life of a population, rallying people and organizations to promote community development.

Once-off philanthropic gifts

A visionary idea for change may not need ongoing support, but rather a single donation to help realise that vision. Although the benefits of a large-scale capital project will be felt for years to come, the primary need for funding may be at the start of that project.

Partnership-led philanthropy

Many philanthropic organisations choose to maximise impact by using their expertise in cooperating with other philanthropic organisations and/or the Government in achieving their aims.

 

Venture philanthropy

Venture philanthropy (VP) and social investment (SI) address the growing need for support and flexible funding. Its name comes from applying techniques more commonly associated with venture capital to the task of philanthropy. Venture philanthropists use a wide range of financing mechanisms (including grants, debt, equity hybrid financing, etc.) tailored to the specific needs of the supported organisation.