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Why Nonprofits Exist: The Origins and Evolution of Philanthropy
June 6, 2025
Nonprofits are deeply ingrained in the fabric of American life, and we often overlook the history of nonprofits and how their origin story began. Whether it’s a community health clinic, an after-school arts program, or a food rescue organization, these institutions do more than just provide services, they reflect a unique sense of humanity. Understanding why nonprofits exist requires a look at how the nonprofit model has evolved over time. From religious organizations to the rise of government aid and welfare systems, tracing the history of nonprofits and philanthropy reveals just how deeply this spirit of giving is embedded in human culture, and how it continues to grow and adapt today.
The origins of Philanthropy:
Giving back is not a new phenomenon. Philanthropy originates from Ancient Greece, literally translating to the “love of humanity”. In ancient civilizations, the Greeks and Romans would come together to support the less fortunate, fund public works, and promote education. As societies progressed through the Middle Ages and into the Renaissance, the role of charitable organizations began to formalize. Religious institutions played a pivotal role in this evolution, as churches and monasteries provided care for the sick, education for the young, and support for the poor. Now, 9.9% of all private sector jobs are held by nonprofit organizations, with 1 in 10 working adults working in the sector.
In tracing the history of nonprofits in the United States, the first widely recognized modern example is the Peabody Education Fund. Its mission was to improve education in the post-Civil War South, particularly for poor white communities and formerly enslaved individuals. While the Emancipation Proclamation had legally ended slavery, deep racial and economic inequalities remained, especially in access to education.
Industry, Inequality, and the Rise of Organized Giving:
Understanding the history of nonprofits helps us see how social challenges have long driven innovation in the nonprofit sector. In the late 19th century, many wealthy men began forming voluntary associations to promote causes like public education and civic development. These efforts helped lay the groundwork for the nonprofit model we know today. Some of the earliest American universities, such as Harvard and Cornell, were established through such philanthropic endeavors. At the time, higher education was tuition-free, exclusively for white men, and operated independently of government involvement.
As America recovered from the Civil War, it began to reshape itself through the rise of the Industrial Revolution. Cities swelled with people seeking opportunity in the booming factory economy, but this rapid growth came at a cost. The wealth gap between industrial capitalists and the working class widened dramatically. Factory conditions were often dangerous and inhumane; long hours, low wages, and child labor were common.
The influx of people into urban centers also brought severe social challenges: overcrowded housing, widespread poverty, and unsafe work environments. In response, a new wave of nonprofit organizations began to emerge, driven by a mission to address these urgent needs. These early efforts laid the foundation for modern social services, offering aid and advocacy for the most vulnerable in a rapidly changing America.
Andrew Carnegie rose to immense wealth through the steel industry during the Industrial Revolution. Like many industrialists of the time, Carnegie profited from grueling labor practices; his mills were notorious for demanding twelve-hour shifts, seven days a week, under hazardous conditions. Yet, despite his labor record, Carnegie is often recognized as one of the first modern philanthropists.
Believing that wealth should be used to uplift society, Carnegie devoted much of his fortune to expanding access to knowledge and opportunity. His primary focus was education, particularly through the establishment of free public libraries. At a time when public libraries were rare, Carnegie championed the idea that everyone, regardless of class, should have access to books and learning. Starting in 1881, he and the Carnegie Corporation invested more than $56 million to fund the construction of 2,509 libraries across the English-speaking world, fundamentally transforming access to education for generations to come.
Carnegie was also one of the first capitalists to publish and promote the idea that the rich have an obligation to promote public good. In his book, The Gospel of Wealth, Carnegie emphasizes that wealth should be used to improve the lives of others, and that “The man who dies thus rich, dies disgraced.”
While philanthropic efforts during this era were undoubtedly impactful, they often came with problematic caveats. Many wealthy donors believed in supporting lower-income and vulnerable populations, but not all agreed on who was worthy of that support. As Carnegie famously wrote in The Gospel of Wealth, “It were better for mankind that the millions of the rich were thrown into the sea than so spent as to encourage the slothful, the drunken, the unworthy.”
This mindset continues to raise concerns among today’s nonprofit leaders and charitable organizations. It gives wealthy donors disproportionate control over where resources go, allowing them to define who is “deserving” of help based on their own values rather than the actual needs of communities. As a result, it can reinforce harmful stereotypes about poverty and take away the power of communities to advocate for themselves or influence the kind of support they receive.
Still, Carnegie played a key role in shaping the culture of giving that underpins modern philanthropy. Despite their flaws, the foundations built by industrial titans had a lasting impact on fields like education, science, public health, and the arts. Over time, their collaborative efforts helped push philanthropy toward more structured and inclusive models. These developments paved the way for future reforms, such as the Revenue Act of 1909, which officially recognized tax-exempt status for charitable, religious, and educational organizations and introduced the “no private inurement” rule to prevent personal profit from nonprofit funds.
From Government Support to Social Movements:
While early philanthropy was largely driven by wealthy individuals and private foundations, the Great Depression marked a major turning point in the history of nonprofits, shifting the responsibility of social welfare more directly onto the federal government. In response, President Franklin D. Roosevelt launched the New Deal, a sweeping set of programs aimed at providing relief to working-class and low-income Americans. Throughout his first presidency, FDR passed a multitude of bills designed to lift the country out of crisis. From the Civilian Conservation Corps, an initiative employing young men in rural and park development, to the National Labor Relations Act and the creation of Social Security, these policies significantly reshaped the landscape of nonprofit and philanthropic work in America.
As the New Deal redefined the government’s role in social welfare, the global crises that followed further expanded the scope and significance of nonprofit organizations. Both world wars had profound impacts on the sector, shifting its focus and scale. During these periods, nonprofit efforts centered around medical care, food distribution, and psychological support. In particular, World War II highlighted the global importance of nonprofit work, as millions were displaced and entire economies destabilized. These challenges transformed public perception, positioning nonprofits not just as charitable actors, but as critical partners in addressing complex political and humanitarian crises.
Nonprofits Today: Collective Action for a Better Future:
The shifting in class consciousness seen in the 1950s and the latter half of the 20th century brought about a new type of nonprofit work, one more dedicated to fighting for the social justice of marginalized communities. As the civil rights movement began to take hold across America, many nonprofit organizations began to build advocacy into their work. Organizations such as the NAACP and Amnesty International emerged as powerful voices advocating for marginalized communities and human rights. The growing awareness of racial discrimination, gender inequality, and environmental degradation sparked a cultural movement not just within the nonprofit sector but throughout America. Nonprofits began to engage in lobbying efforts, public education campaigns, and grassroots mobilization to raise awareness and influence policy decisions.
As we reflect on the history of nonprofits and their role in shaping social change, We Don’t Waste remains committed to carrying that legacy forward. Presently, nonprofits across America fight, advocate, and work to create a more equitable, fair, and inclusive world. Innovation and digital technologies have made connection and communication easier than ever before, strengthening the power of community support and activism. As more and more people need food access across America, We Don’t Waste recognizes that we cannot do it alone. Creating strong partnerships with other local nonprofits and businesses, as well as advocating for better food access policy across the state, will help ensure we are creating as much change as possible.
Meaningful change has always been driven by the power of people. We’re honored to stand alongside our communities, listening, learning, and working together to build a better future for all. But we know we can’t do it alone. Help us make a difference in our Denver communities and put a dent in the 40% of food waste.
Make an impact: Volunteer with us or donate today, our communities need us more than ever.