The Power of Giving Circles

by Kristen L. Berchtold
Central Illinois Association of Fundraising Professionals

Giving together for greater impact… giving circles bring collective power to the grassroots.

The concept is simple, but so very powerful: small groups of people with a common interest pool their resources to support a cause they all believe in. Collective giving groups, or giving circles, are a growing trend in philanthropy and have become a very popular way for people to focus and maximize the impact of their charitable giving.

Giving circle members contribute individually to a common charitable fund, then get together to learn about issues and collectively decide how funding will be dispersed and which projects or organizations will benefit. In the United States, giving circles have tripled in number since 2007, with over 1,000 independent groups and more than 500 chapters that are part of larger regional or nationwide giving networks or programs. Giving circles have engaged more than 150,000 individual donors in all 50 states and collectively contributed nearly $1.3 billion to date.

Changing the Landscape
Giving circles can vary widely in size, structure and scope. They can be small and informal—a few coworkers or neighbors pooling their resources to support a charity—or larger and much more structured, with hundreds of members, a governing body and an organized, formal granting process. They may place emphasis on a particular issue, such as afterschool programming, healthcare or the arts. They may support a sole charity or have a much broader purpose, such as improving the quality of life in a particular community. What all giving circles have in common, however, is a focus on the interests of its members and a belief in the power of collective giving.

No matter how they are organized, giving circles are changing the landscape of philanthropy in our country by engaging diverse groups of donors. According to a recent report by the Women’s Philanthropy Institute at the Indiana University Lilly Family School of Philanthropy, 60 percent of the giving circles identified were formed around a particular identity, such as gender, race, age or religious affiliation. Women’s giving circles account for nearly half of the total, followed by Jewish, Asian-American, Pacific Islander and African-American groups.

The study also found women made up a majority of the members of nearly 70 percent of all giving circles. In addition, the number of men’s and LGBTQ giving circles has also grown substantially over the last decade. Another study found that giving circles are effective at engaging younger people in philanthropy—nearly half of all members are under the age of 40.

Grassroots Philanthropy
Giving circles are vehicles for empowered, grassroots philanthropy—they can profoundly affect not only the causes they support, but also the lives of the individual members. Philanthropic causes benefit from increased community visibility and a more diverse pool of engaged and educated donors. By empowering individual donors with the collective impact of their giving, giving circles can increase the level of funding available to support charitable endeavors.

Giving circles provide a forum for donors to interact with others who share their interests and beliefs. Because donors take an active role in the decision-making process, they are more likely to get involved and engage with the supported cause in other ways. Giving circles attract donors of all income levels and enable those with less discretionary income to leverage their resources.

Giving circles also build civic engagement and social capital. They can assist in building future leaders in philanthropy by providing a “training ground” where members can network, learn about the grant-making process, and be educated about issues affecting the community. Giving circles are inclusive. They create flexibility in giving and broaden the demographic scope of philanthropy by helping overcome historical barriers to giving, such as age, race, gender and socioeconomic status.

Cause and Commitment
Finally, charitable giving, like so many things in life, is more fun when you are part of a group. Starting a new giving circle is fairly simple—all you need is a willing cause and members willing to make a financial commitment. Here are three key steps to creating a successful giving circle:

  1. Choose your cause and mission. What are your charitable objectives, and what cause or causes would you like to impact?
  2. Determine your structure. Make some basic decisions about where and when you’ll meet, the size of your group, how new members will be recruited, how often and how much each person will give, and how the funds will be managed.
  3. Decide how to invest your charitable donations. Will members submit projects for funding? Will you invite local not-for-profits to submit proposals, or will you seek out giving opportunities at specific organizations based on your circle’s goals? How often will funds be dispersed?

Giving circles can be powerful tools for change and have an important role to play in civic engagement and philanthropy. No matter what causes they support, whether they give away hundreds of dollars or millions, giving circles empower everyday citizens, leverage charitable dollars and magnify impact to make our community a better place. iBi

Kristen L. Berchtold, CFRE, is a Certified Fund Raising Executive and member of the Central Illinois Association of Fundraising Professionals.

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