Hailed in his lifetime as "the most liberal philanthropist of ancient or modern time," Peabody is recognized today as the founder of modern philanthropy. To be sure, his benefactions have been overshadowed by the much larger contributions of later donors, but it was he who set the example for and established the pattern followed by Andrew Carnegie, John D. Rockefeller, and the other great philanthropists of the nineteenth century. The Peabody Donation Fund, which provided housing for London's poor and the Peabody Education Fund, which helped to heal the wounded South, were the prototypes for the modern philanthropic foundation, but it was not until the twentieth century that these models were widely emulated.

In 1815, George Peabody persuaded his partner Elisha Riggs to move their firm, Peabody & Riggs, to Baltimore. They settled into larger quarters in Old Congress Hall and added banking services to the firm's business. Their banking ventures quickly became a source of great profit. By 1822, Peabody & Riggs branches were established in Philadelphia and New York. 

 George Peabody's $2 million gift establishing the Peabody Education Fund supported education at all levels in the eleven former Confederate states and West Virginia.  Many northerners and southerners alike believed this ambitious venture was the surest means of healing the wounds left in the wake of the Civil War.

The first meeting of the trustees of the Peabody Education Fund was held 
at Willard's Hotel in Washington, D.C., on February 8, 1867. There, former governors of northern and southern states mingled for the first time since the beginning of hostilities.  When the trustees gathered a month later in New York City the occasion was recorded by renowned Civil War photographer Matthew Brady. 

The Peabody Education Fund, which established a public education system for the states of the American South, was George Peabody's largest single benefaction.  Taking a position that was astonishing for that era, Peabody insisted on providing educational opportunities for all races. General Ulysses S. Grant, Admiral David G. Farragut, and the governors of New York, Massachusetts, Virginia, and South Carolina were among those chosen as trustees for the Fund.  Peabody was awarded a Congressional Medal for his benefaction. 

I feel most deeply, therefore, that it is the duty and privilege of the more favored and wealthy portions of our nation to assist those who are less fortunate; and, with the wish to discharge so far as I may be able my own responsibility in this matter, as well as to gratify my desire to aid those to whom I am bound by so many ties of attachment and regard, I give to you, gentlemen, most of whom have been my personal and especial friends, the sum of one million of dollars, to be by you and your successors held in trust, and the income therefore used and applied in your discretion for the promotion and encouragement of intellectual, moral, or industrial education among the young of the more destitute portions of the Southern and Southwestern States of our Union; my purpose being that the benefits intended shall be distributed among the entire population, without other distinction than their needs and the opportunities of usefulness to them.
-- George Peabody, February 7, 1867

President Millard Fillmore arranged for transportation of American wares to Britain for the Great Exhibition of 1851 but Congress, plagued with the slavery controversy and suspicious of the British, denied funding for actual U.S. participation in this "speculative venture."  The American exhibits languished on the English docks  as the British press heaped scorn on the former colony.  George Peabody, recognizing the importance of his country making a good showing, put up the £3,000 (about $15,000) needed to install the American exhibits in London's Crystal Palace. 

 During George Peabody's time in London there were acres of slums with tenements where basements were awash in sewage. Upstairs rooms were so crowded with humanity that the dead often lay packed amid the living for days.  Women stood by their infants and small children to protect them from rat bites. Dank rooms with piles of rags for furniture might hold as many as thirty humans sleeping on straw-filled bags.

There was no central water supply. Water, often brought in from sources not far from sewage outlets, was furnished by a variety of private companies. Cholera outbreaks were frequent and lethal. For a time George Peabody considered establishing a network of drinking fountains for the city.

The Peabody Donation Fund, which provided housing for London's poor, and the Peabody Education Fund, which helped the American South recover from the devastation of the Civil War, were prototypes for the modern philanthropic foundation, but it was not until the twentieth century that this method of directing money to good causes was widely emulated.

 Founded in 1857, Baltimore's Peabody Institute was the first major cultural center in an American city. It provided Baltimore with a research library, scholarly lectures in the humanities and sciences, an academy of music, and a gallery of art.  When The Johns Hopkins University was established in 1877 the Peabody Board of Trustees passed a resolution calling for the two institutions to affiliate at the earliest possible time. A century later, in 1977, the Peabody Institute affiliated with The Johns Hopkins University.