Why have a Philanthropic Fund?

Despite moving very slowly, philanthropy is gaining more and more notoriety in Brazil. According to Research Donation Brazil, in 2022, 84% of Brazilians over the age of 18 and with a family income greater than the minimum wage made at least one type of donation, be it money, goods or time, in the form of volunteering.

To keep up with this growing movement, it was necessary for philanthropy to structured and follow more paths strategic, which would guarantee the impact at the end, and contribute to the development and strengthening of civil society. In this sense, some biodiversity and face climate challenges focused on philanthropy, such as Philanthropic Funds.

Philanthropic Funds: what are they?

Philanthropic Funds are financial mechanisms created by philanthropic organizations or people, with the intention of supporting a specific cause or project. In them, donations are intended for positive impact and can come from a single donor or be open to third parties? natural or legal persons, national or international? donate too. Its objective is to act directly on the route between the donated capital and the entity or cause that will receive it, creating solutions to increase effectiveness and transparency and guarantee delivery in accordance with the initiative's objectives.

Advantages of a Philanthropic Fund

The Fund is attractive because it is scalable and brings convenience, efficiency and transparency to all parties included, such as beneficiaries, donors and settlors. Through this tool, it is possible to gather donations from Brazil or abroad, from organizations, sponsorships, collective financing (crowdfunding), combined financing (matchfunding) and much more.

Furthermore, it allows an organization to carry out the financial management of the fund's resources, so that the allocation of capital is more efficient, allowing founders to focus their time and effort on programmatic management. This way, it is possible to strengthen the cause for which the fund was allocated, without necessarily dealing with the managerial and financial parts. It is important to remember that it is essential that all financial movement processes of funds guarantee transparency and comply with Brazilian legislation.

Another very advantageous feature of a fund is its flexibility. Capital can be disbursed in different ways, such as donations to civil society organizations or individuals, payments of expenses related to the provision of services, research, awards, among other various purposes.

Finally, each fund has its objective and supported cause(s) very well defined. This allows its management to be more accurate and strategic, in order to effectively contribute to the positive impact and the solution of certain problems. This allows philanthropy to fulfill its role of complementing the State's actions to minimize latent problems in our society.

know more

To stay up to date with everything about the financial mechanisms that guarantee more effectiveness and transparency for philanthropy, download our Guide to Philanthropic Funds.

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