Benefactor

Reviewed by Annapoorna | Updated on Aug 27, 2020

Introduction

We would have often heard about well wishers or good samaritans contributing money for a specific cause. Benefactors are exactly the same sponsoring for a particular purpose, with or without expecting anything in return.

What is Benefactor?

A benefactor is an individual who provides money or any other resources to another individual, a group, or an organisation. A benefactor ideally is someone who gives financial gifts to any entity being the beneficiary. Accordingly, a female benefactor is called a benefactress.

They have several reasons to give away their money, time, or any other resources. They are found to help specific individuals and organisations that they care about socially. The resources so provided are referred to as the patronage. One should note that an individual need not be wealthy to be known as a benefactor. However, the term is generally associated with large financial gifts to charities and university endowments. The benefactor can prompt for financial support. For example, a benefactor may send a fixed sum of money to a religious organisation or a local school every year.

Parenting involves some reference to benefactors. Parents who financially support their children are also considered benefactors. For instance, parents may aid their children for college expenses or may help them by paying for the rent of a recent college graduate. In both cases, the parent is assisting by giving financial gifts, even though the child is not considered a charity.

The goal of the benefactor could be to claim donations and gifts on his or her taxes. It results in a reduction in the overall tax outflow. Donations in the form of charity, endowment, or any other not-for-profit activity are some of the most commonly associated means adopted by the benefactors. Such donations would not have been made when the benefactor has died. Because the donations to third-parties can be adjusted against ones taxes are considered for the benefactors financial and estate planning.