Though charitable foundations are well intentioned and seek to alleviate poverty, many of them are not very effective despite receiving sizable endowments. One of the reasons is that these foundations only seek to create jobs and often to do not result in increases in productivity.
On the other hand, entrepreneurship tries to fulfill a need which exists. An entrepreneur can only flourish if he or she can provide a product or service which is in demand at reasonable cost. By encouraging entrepreneurs, not only is there an increase in the GDP, it also boosts the local economy.
Though young people are most likely to be able to take risks, one of the major impediments to young entrepreneurship is the lack of funds, especially if the business is capital intensive. Charitable foundations like the Kauffman Foundation allow a young entrepreneur to pursue his or her idea by providing grants for feasible projects.