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A charitable organization[1] or charity is an organization whose primary objectives are philanthropy and social well-being (e.g. educational, religious or other activities serving the public interest or common good).

The legal definition of a charitable organization (and of charity) varies between countries and in some instances regions of the country. The regulation, the tax treatment, and the way in which charity law affects charitable organizations also vary. Charitable organizations may not use any of their funds to profit individual persons or entities.[2] (However, some charitable organizations have come under scrutiny for spending a disproportionate amount of their income to pay the salaries of their leadership).

Financial figures (e.g. tax refund, revenue from fundraising, revenue from sale of goods and services or revenue from investment) are indicators to assess the financial sustainability of a charity, especially to charity evaluators. This information can impact a charity's reputation with donors and societies, and thus the charity's financial gains.

Charitable organizations often depend partly on donations from businesses. Such donations to charitable organizations represent a major form of corporate philanthropy.[3]

In order to meet the exempt organizational test requirements, a charity has to be exclusively organized and operated.[1] In order to receive and pass the exemption test, a charitable organization must follow the public interest and all exempt income should be for the public interest.[1] For example, in many countries of the Commonwealth, charitable organizations must demonstrate that they provide a public benefit.[4]

History

[2] (However, some charitable organizations have come under scrutiny for spending a disproportionate amount of their income to pay the salaries of their leadership).

Financial figures (e.g. tax refund, revenue from fundraising, revenue from sale of goods and services or revenue from investment) are indicators to assess the financial sustainability of a charity, especially to charity evaluators. This information can impact a charity's reputation with donors and societies, and thus the charity's financial gains.

Charitable organizations often depend partly on donations from businesses. Such donations to charitable organizations represent a major form of corporate philanthropy.[3]

In order to meet the exempt organizational test requirements, a charity has to be exclusively organized and operated.[1] In order to receive and pass the exemption test, a charitable organization must follow the public interest and all exempt income should be for the public interest.[1] For example, in many countries of the Commonwealth, charitable organizations must demonstrate that they provide a public benefit.[4]

Until the mid-18th century, charity was mainly distributed through religious structures (such as the English Poor Laws of 1601), almshouses and bequests from the rich. Christianity, Judaism and Islam incorporated significant charitable elements from their very beginnings[5] and dāna (alms-giving) has a long tradition in Hinduism, Jainism, Buddhism and Sikhism. Charities provided education, health, housing and even prisons. Almshouses were established throughout Europe in the Early Middle Ages to provide a place of residence for poor, old and distressed people; King Athelstan of England (reigned 924-939) founded the first recorded almshouse in York in the 10th century.[6]

Enlightenment charity

The Foundling Hospital. The building has been demolished.

In the Enlightenment era charitable and philanthropic activity among voluntary associations and rich benefactors became a widespread cultural practice. Societies, gentleman's clubs, and mutual associations began to flourish in England, and the upper-classes increasingly adopted a philanthropic attitude toward the disadvantaged. In England this new social activism was channeled into the establishment of charitable organizations; these proliferated from the middle of the 18th century.[7]

This emerging upper-class fashion for benevolence resulted in the incorporation of the first charitable organizations. Captain Thomas Coram, appalled by the number of abandoned children living on the streets of London, set up the Foundling Hospital in 1741 to look after these unwanted orphans in Lamb's Conduit Fields, Bloomsbury. This, the first such charity in the world,[8] served as the precedent for incorporated associational charities in general.[9]

Jonas Hanway, another notable philanthropist of the Enlightenment era, established The Marine Society in 1756 as the first seafarer's charity, in a bid to aid the recruitment of men to the navy.[10] By 1763 the Society had recruited over 10,000 men; an Act of Parliament incorporated it in 1772. Hanway was also instrumental in establishing the Magdalen Hospital to rehabilitate prostitutes. These organizations were funded by subscription and run as voluntary associations. They raised public awareness of their activities through the emerging popular press and were generally held[by whom?] in high social regard - some charities received state recognition in the form of the royal charter.

Charities also began to adopt campaigning roles, where they would champion a cause and lobby the government for legislative change. This included organized campaigns against the ill treatment of animals and children and the campaign that eventually succeeded at the turn of the 19th century in ending the slave trade throughout the British Empire and within its considerable sphere of influence. (This process was however a lengthy one, which finally concluded when Saudi Arabia abolished slavery in 1962.)

The Enlightenment also saw growing philosophical debate between those who championed state intervention and those who believed that private charities should provide welfare. The Reverend Thomas Malthus (1766-1834), the political economist, criticized poor relief for paupers on economic and moral grounds and proposed leaving charity entirely to the private sector.[11] His views became very influential and informed the Victorian laissez-faire attitude toward state intervention for the poor.

Growth during 19th century

During the 19th century a profusion of charitable organizations emerged to alleviate the awful conditions of the working class in the slums. The Labourer's Friend Society, chaired by Lord Shaftesbury in the United Kingdom in 1830, aimed to improve working-class conditions. It promoted, for example, the allotment of land to labourers for "cottage husbandry" that later became the allot

In the Enlightenment era charitable and philanthropic activity among voluntary associations and rich benefactors became a widespread cultural practice. Societies, gentleman's clubs, and mutual associations began to flourish in England, and the upper-classes increasingly adopted a philanthropic attitude toward the disadvantaged. In England this new social activism was channeled into the establishment of charitable organizations; these proliferated from the middle of the 18th century.[7]

This emerging upper-class fashion for benevolence resulted in the incorporation of the first charitable organizations. Captain Thomas Coram, appalled by the number of abandoned children living on the streets of London, set up the Foundling Hospital in 1741 to look after these unwanted orphans in Lamb's Conduit Fields, Bloomsbury. This, the first such charity in the world,[8] served as the precedent for incorporated associational charities in general.[9]

Jonas Hanway, another notable philanthropist of the Enlightenment era, established The Marine Society in 17

This emerging upper-class fashion for benevolence resulted in the incorporation of the first charitable organizations. Captain Thomas Coram, appalled by the number of abandoned children living on the streets of London, set up the Foundling Hospital in 1741 to look after these unwanted orphans in Lamb's Conduit Fields, Bloomsbury. This, the first such charity in the world,[8] served as the precedent for incorporated associational charities in general.[9]

Jonas Hanway, another notable philanthropist of the Enlightenment era, established The Marine Society in 1756 as the first seafarer's charity, in a bid to aid the recruitment of men to the navy.[10] By 1763 the Society had recruited over 10,000 men; an Act of Parliament incorporated it in 1772. Hanway was also instrumental in establishing the Magdalen Hospital to rehabilitate prostitutes. These organizations were funded by subscription and run as voluntary associations. They raised public awareness of their activities through the emerging popular press and were generally held[by whom?] in high social regard - some charities received state recognition in the form of the royal charter.

Charities also began to adopt campaigning roles, where they would champion a cause and lobby the government for legislative change. This included organized campaigns against the ill treatment of animals and children and the campaign that eventually succeeded at the turn of the 19th century in ending the slave trade throughout the British Empire and within its considerable sphere of influence. (This process was however a lengthy one, which finally concluded when Saudi Arabia abolished slavery in 1962.)

The Enlightenment also saw growing philosophical debate between those who championed state intervention and those who believed that private charities should provide welfare. The Reverend Thomas Malthus (1766-1834), the political economist, criticized poor relief for paupers on economic and moral grounds and proposed leaving charity entirely to the private sector.[11] His views became very influential and informed the Victorian laissez-faire attitude toward state intervention for the poor.

During the 19th century a profusion of charitable organizations emerged to alleviate the awful conditions of the working class in the slums. The Labourer's Friend Society, chaired by Lord Shaftesbury in the United Kingdom in 1830, aimed to improve working-class conditions. It promoted, for example, the allotment of land to labourers for "cottage husbandry" that later became the allotment movement. In 1844 it became the first Model Dwellings Company - one of a group of organizations that sought to improve the housing conditions of the working classes by building new homes for them, at the same time receiving a competitive rate of return on any investment. This was one of the first housing associations, a philanthropic endeavour that flourished in the second half of the nineteenth century brought about by the growth of the middle class. Later associations included the Peabody Trust (originating in 1862) and the Guinness Trust (founded in 1890). The principle of philanthropic intention with capitalist return was given[by whom?] the label "five per cent philanthropy".[12]

Municipal Corporations Act 1835, which reorganized multiple local charities by incorporating them into single entities under supervision from local government.

Charities at the time, including the Charity Organization Society (established in 1869) tended to discriminate between the "deserving poor" who would be provided with suitable relief and the "underserving" or "improvident poor" who were regarded[by whom?] as the cause of their own woes through their idleness. Charities tended to oppose the provision of welfare by the state, due to the perceived Charity Organization Society (established in 1869) tended to discriminate between the "deserving poor" who would be provided with suitable relief and the "underserving" or "improvident poor" who were regarded[by whom?] as the cause of their own woes through their idleness. Charities tended to oppose the provision of welfare by the state, due to the perceived demoralizing effect. Although minimal state involvement was the dominant philosophy of the period, there was still significant government involvement in the shape of statutory regulation and even limited funding.[13]

Philanthropy became a very fashionable activity among the expanding middle classes in Britain and America. Octavia Hill (1838-1912) and John Ruskin (1819-1900) were an important force behind the development of social housing, and Andrew Carnegie (1835-1919) exemplified the large-scale philanthropy of the newly rich in industrialized America. In Gospel of Wealth (1889), Carnegie wrote about the responsibilities of great wealth and the importance of social justice. He established public libraries throughout the English-speaking countries[14] as well as contributing large sums to schools and universities.[15] A little over ten years after his retirement, Carnegie had given away over 90% of his fortune.[16]

Towards the end of the 19th century, with the advent of the New Liberalism and the innovative work of Charles Booth on documenting working-class life in London, attitudes towards poverty began to change, which led to the first social liberalwelfare reforms, including the provision of old age pensions[17] and free school-meals.[18]

During the 20th century charitable organizations such as Oxfam (established in 1947), Care International and Amnesty International greatly expanded, becoming large, multinational, non-governmental organizations with very large budgets.

Since the 21st century