philanthropic foundation

philanthropic foundation, a nongovernmental, nonprofit organization, with assets provided by donors and managed by its own officials and with income expended for socially useful purposes. Foundation, endowment, and charitable trust are other terms used interchangeably to designate these organizations, which can be traced far back in history. They existed in the ancient civilizations of the Middle East, Greece, and Rome. Plato’s Academy (c. 387 bce), for example, was established with an endowment that helped to sustain its existence for some 900 years. The medieval Christian church set up and administered trusts for benevolent purposes. The Islamic world developed an equivalent of the foundation, the waqf, as early as the 7th century ce. Western European merchants in the 17th and 18th centuries founded similar organizations for worthy causes.

Those early philanthropic forms were usually small and for local and palliative purposes. Although there are still many small foundations, the late 19th and the 20th centuries witnessed the creation of distinctive large ones that usually originated in the fortunes of wealthy industrialists. Having broad purposes and great freedom of action, including the ability by many to conduct programs worldwide, such foundations are variously categorized as: community, which have support from many donors and are located in a specific community or region; corporation-sponsored, which have increased dramatically in number, size, scope, and importance since World War II; operating, which carry out projects with their own staff; and independent, which are established by wealthy individuals and families. Most of the larger and best-known foundations in the United States and other countries have been of the last type.

James Smithson and George Peabody provided funds for the establishment in the United States of the Smithsonian Institution (1846) and the Peabody Education Fund (1867), respectively. At the turn of the century, Andrew Carnegie and John D. Rockefeller inaugurated the first of their many philanthropies. Carnegie’s giving exceeded $350 million, with much of it used for the establishment of such foundations as the Carnegie Foundation for the Advancement of Teaching (1905) and the Carnegie Corporation of New York (1911). Rockefeller established the General Education Board (1902) and the Rockefeller Foundation (1913).

Other American foundations of considerable size and impact were the Russell Sage Foundation (1907), the Commonwealth Fund (1918), the John Simon Guggenheim Memorial Foundation (1925), the Ford Foundation (1936), the W.K. Kellogg Foundation (1930), the Robert Wood Johnson Foundation (1936), the Lilly Endowment, Inc. (1937), the Pew Memorial Trust (1948), the J. Paul Getty Trust (1953), the William and Flora Hewlett Foundation (1966), the Andrew W. Mellon Foundation (1969), the John D. and Catherine T. MacArthur Foundation (1970), and the Gordon and Betty Moore Foundation (2000). The Bill and Melinda Gates Foundation, established in 2000, was the largest philanthropic foundation in the world in the early 21st century.

Outside the United States some of the wealthiest foundations include the Wellcome Trust (1936), in the United Kingdom; the Robert Bosch Foundation (1964), Germany; the Li Ka Shing Foundation (1980), Hong Kong; Stichting INGKA Foundation (1982), Netherlands; the MasterCard Foundation (2006), Canada; and the Mohammed Bin Rashid Al Maktoum Foundation (2007), United Arab Emirates.

The large modern foundations have expended most of their funds for activities in the fields of education, social welfare, science, health, religion, conservation, international relations, and public policy. Whereas some foundations have been reluctant to publicize their activities, others, especially the larger ones, provide regular reports on their operations.