Giving circles growing in popularity among diverse groups

Andrea Pactor is the associate director of the Women’s Philanthropy Institute. In this post, she explores what giving circles are, who comprises them, and how they democratize philanthropy.

A new study, The Landscape of Giving Circles/Collective Giving Groups in the U.S., found about 1,600 giving circles in all 50 states, the District of Columbia, and online.

What is a giving circle?

Giving circles and collective giving groups are “highly flexible, democratic, do-it-yourself vehicles for giving,” according to the new report by the Collective Giving Research Group. They represent grassroots efforts to strengthen communities. As example, Impact 100 Pensacola Bay Area has allocated more than $8 million in grants of $100,000 or more to nonprofits in their region since 2004. Now with more than 1,000 members, this giving circle awarded more than $1 million earlier this year.

The new study, the first in 10 years on the scope and scale of giving circles, documents the exponential growth of this form of philanthropic engagement. Notably,

• The number of giving circles has tripled in the last 10 years with about half starting in 2010 or later.
• Giving circles resonate with more women than men. The study found that women comprise more than half of the membership in about 70 percent of all groups (a reason for the Women’s Philanthropy Institute’s interest in this mode of giving).

New developments since 2007 demonstrates the power of the movement.

• The giving circle model is attracting a more diverse range of donors by race/ethnicity/sexual identity and by income. Men-only, LGBTQ, and specific identity-based groups are populating the landscape. At the same time, the entry level, or participation fee, is more varied and the average amount given by individual participants is decreasing, potentially eliminating barriers to entry for more people. As example, the normal participation fee for one women’s giving circle is $2,000 per year. This year, the group is experimenting with a pop-up giving circle in which participants will contribute $500 for this unique event. By reducing the cost to participate, the goal is to engage more women who may wish to “test drive” the giving model.
• A significant development is the emergence of networks of giving circles such as Amplifier, the Women’s Collective Giving Network, and the Community Investment Network.

Why do giving circles/collective giving groups matter?

This form of giving is a valuable contribution to the philanthropic landscape.

1. Giving circles are often the first portal for individuals to be engaged in an organized way in philanthropy.
2. The grassroots aspect of the giving circle model and the democratic way in which they operate—one person, one vote in charitable decision-making—ensure that each voice counts.
3. The donor education component should not be underestimated. Giving circle members learn about pressing community issues, develop deeper understanding about how their communities work (most funding stays in the local community), learn about grantmaking, and engage in communal conversations about values.
4. By joining together and making collective grants, individual donors can leverage their giving.
5. They provide a safe space for powerful conversations about philanthropy.

According to the report, giving circles are “often described as a way of democratizing philanthropy.” In an era when gifts from mega donors such as Mark Zuckerberg and Priscilla Chan dominate the headlines, giving circles remind us that everyone can be a philanthropist.

***

The Landscape of Giving Circles/Collective Giving in the U.S. is the first of a three-part series of reports on giving circles today. The second part will examine the impact of participation in giving circles on donor giving and civic engagement. The final part will study the relationship between giving circles and their host organizations.

The Collective Giving Research Group includes Jessica Bearman of Bearman Consulting, Julia Carboni, Ph.D., of the Maxwell School at Syracuse University, Angela Eikenberry, Ph.D., of the University of Nebraska at Omaha, and Jason Franklin of the Dorothy A. Johnson Center for Philanthropy at Grand Valley State University. Follow them on Twitter:  @jbearwoman, @jlcarboni, @aeikenberry, @fundingchange.

The research was completed with funding from the Bill & Melinda Gates Foundation, via the Women’s Philanthropy Institute at the Indiana University Lilly Family School of Philanthropy, and from the Charles Stewart Mott Foundation.

By Andrea Pactor, associate director of the Women’s Philanthropy Institute. Follow WPI on Twitter @WPIinsights. The views in this post are the author’s and do not necessarily reflect the official positions or policies of the Bill & Melinda Gates Foundation or the Charles Stewart Mott Foundation.