Philanthropy Sector Overview

Philanthropic practice is part of the not-for-profit sector, which is sometimes also called the community sector or the third sector.

The not-for-profit sector consists of organisations whose purpose is something other than the generation of profit or gain for individual members or directors. Generally, government is not considered part of the non-profit sector, but some government-linked bodies such as schools, hospitals, universities and museums are.

There are over 700,000 not-for-profit organisations in Australia, including but not limited to the following:

Some not-for-profit organisations are charities. Charities are altruistic entities which the Australian Taxation Office has endorsed as legally charitable. Charities may care for people who are sick or disabled, provide relief after disasters, promote religion or provide educational scholarships, as well as many other purposes beneficial to the community.

Philanthropy is a desire to improve the welfare of humanity through the giving of money, time, information, goods and services, influence and voice for community good.

Philanthropy can be carried out by individuals, groups, families or companies. There are also organisations which have been created as legal vehicles for philanthropy; these are known as trusts or foundations. Trust is the legal term, but many trusts are referred to as foundations. Trusts and foundations are not-for-profit entities which hold money in trust for the public benefit and which make grants of money for charitable purposes. Generally a foundation will have an asset base known as a corpus, and the income from the corpus is given away in the form of grants.

Trusts and foundations are governed by trustees. Trustees are responsible for making decisions about investments and about grantmaking. Trustees must ensure that the trust continues to earn income, some of which they must re-invest in order to ensure that the corpus continues to keep up with economic growth. They must also ensure that the trust continues to operate for the charitable purposes for which it was established.

Some foundations in Australia employ staff, whose job it is to review the submissions for funding they receive as well as to provide research services to the trustees and to talk to people looking for funding. Other foundations do not have staff, and the trustees do all the research work. Still other foundations are governed by trustee companies, which are organisations authorised to act as professional trustees.

We can categorise foundations into several different types; these are not legal terms, but are categories we use to give a rough indication of where the foundation's initial funding comes from and what its purposes might be. They include family foundations, private foundations, corporate foundations and community foundations.


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