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A Note on the Economics of Philanthropy
The etymology of philanthropy is love of humanity. Philanthropy is normally associated with an altruistic behavior that takes the form of charitable gifts of money and assets by individuals, foundations, or corporations. Philanthropy is sometimes distinguished from charity because while charity aims to relieve the suffering associated with a particular social problem, the objective of philanthropy is to address the root cause of the problem.1 In many countries philanthropic activities are encouraged with tax subsidies. In the United States, which is the country for which we have better data, charitable gifts amount to approximately 2% of GDP (about USD 400 billion in 2016) with donations above USD 2, 200 for the average American household (Andreoni, 2015.
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