Philanthropy is the spirit of active goodwill toward others, which is demonstrated in efforts to promote their welfare. The term is often used comparatively with charity. Every year vast sums of money are collected for invaluable philanthropic purposes, and an increasing number of people participate in the work of collecting money through highly organized campaigns, which is known as fund-raising.

In early times, charity was usually prompted by religious faith and helped to assure a reward in an afterlife, a notion found in Egypt, many centuries before the Christian era. A traditional philanthropic ideal of Christianity, that of the tithe, which holds that one tenth of a person's income should go to charity. In Islam 2.5% of every persons surplus wealth should be donated to Charity to help the poor and needy (Zakaat). Charity is also important in other religions.

A Foundation is a public or private Trust, which is not a charitable organization, but is established and operated for Charitable purposes. Many institutions have been set up to distribute private wealth for public purposes.

Today the organization and coordination of philanthropy has eliminated much of the spontaneity of giving. They have also brought about a more rational assessment of ability to give as well as the introduction of scientific methods of ascertaining community and national needs and of raising money. The focus has also shifted from the relief of immediate need to long-term planning to prevent future need.

In many countries philanthropy has been incorporated in government policy in the form of tax exemptions for contributions to charitable agencies. Many important institutions are partly or wholly dependent on it.