[Chapter 15, page 246]

Giving circles

Giving circles, a cross between book clubs and investment groups, are groups of individuals who pool their philanthropic funds, then decide in a democratic manner how group funds will be donated. They offer a philanthropy-focused, social environment for members and often help members learn about issues in a specific area of concern – from the needs of women in developing countries to particular populations in their own community. Giving circles expand philanthropy from a family activity into a social, community one.

“Marsha Wallace, a labor and delivery nurse in Greenville, SC, often volunteered at a health care clinic and donated to local charities, but she felt that she wasn’t doing enough. So three years ago she invited some friends to a potluck dinner. They were asked to bring an appetizer, a main course or a dessert—and their checkbooks.

More than 25 women attended, and they contributed $760 to Women for Women International, a nonprofit organization based in Washington that helps female war survivors. The dinner group gave itself a name, Dining for Women, and agreed to meet monthly, with each member donating the $30 she would have spent at a restaurant. (Eventually, Ms. Wallace scrapped the minimum donation because she worried that some women could not afford to attend.)

Now, every month, the donations, usually amounting to $400 to $500, are given to a variety of international nonprofit groups that help women and children. The club has grown to 115 members, with perhaps 15 or 20 showing up at each meeting. It has contributed a total of $19,000 to various charities, including the American Leprosy Missions and Habitat for Humanity. Donations have paid for two years of nursing school for an East African woman and started a $1,400 medical fund in Ethiopia.”

-Kristina Shevory, “Giving: When Charity Begins In a Circle of Friends,” New York Time, October 9, 2005, Sunday Money.

Giving circles vary widely in their size, administration, and activities. A recent study identified about 225 giving circles with 8,000 participants in the United States who have given a total of $32 million. Considering the grassroots nature of giving circles, the field may be even larger.[1] Because the level of giving varies widely from circle to circle, giving circles can be an option for many different donors. For instance, while members of the Daily Muses in Boston donate only one dollar per day, the Barnabus Fund in Indianapolis requires a yearly commitment of $20,000. Some circles have tiers of contributions, allowing people to give at a level appropriate to their personal finances. Many giving circles are “hosted” by donor-advised funds at community foundations; some have their own 501(c)3 status.[2]

Giving circles include a disproportionate number of women and young people.[3] Some aim for specific members; for example B’More and Change Funds in Baltimore, Maryland, target young professionals between the ages of 25 to 40.

In small circles, members often give equal, pre-determined annual amounts and everyone is involved in (or at least invited to be part of) the discussion and decision-making. Shared Giving in Durham, North Carolina is an example. The group’s sixteen members commit to giving at least $500 per year for three years, meeting on a bimonthly basis, and using a consensus system to decide on beneficiaries. They have given grants to support a family violence prevention center, a community tutoring program for Hispanic children and their parents, and an organization that helps seniors with medical prescription costs and management.[4]

Philanthropic Service Clubs

Philanthropic service clubs, like Rotary, Kiwanis, and Lions Clubs, exist in cities all over the world to provide individuals with a vehicle to give back to their community. They boast worldwide memberships of 1.2 million, 260,000 adults and 320,000 youth, and 1.3 million, respectively. Each of these clubs holds 501(c)(3) status and money is raised through a minimum annual contribution by club members, as well as through fundraisers. These clubs are principally responsive philanthropies: they donate money according to their interests or the local needs of their communities and club members volunteer their time and services on these projects. However, the international infrastructure of these clubs at times leads to more strategic giving.

Rotary International has led an international campaign to vaccinate all the world’s children against polio. Launched in 1979, PolioPlus has provided oral vaccinations to two billion children in 122 countries; its contributions will amount to over $850 million by the time the world is certified polio-free. Rotary International has collaborated with the World Health Organization (WHO), United Nations, and governments all over the world on the project. The incidence of polio has declined by more than 99 percent since the launch of the PolioPlus program. Former United Nations General Secretary Kofi Annan remarked, “Rotary’s PolioPlus program is a shining example of the achievements made possible by cooperation between the United Nations and non-governmental organizations.”

Sources: Rotary International, Kiwanis International, Lions Clubs International websites.

Some giving circles have chapters around the country. Bread for the Journey has twenty two chapters in the U.S. and Canada that support Christian-focused community nonprofits. Womanade, which started with a potluck dinner raise funds to allow Dr. Amy Kossoff to serve needy patients, has twenty five chapters that support a range of charitable causes.[5]

Social Venture Partners International (SVPI) is perhaps the best-known of the formally-organized giving circles with over 1,700 members in 24 groups.[6] Its groups require a minimum annual donation of $5,000, and provide educational and networking opportunities. SVPI members also donate time—in a professional or administrative capacity—to help manage the circle.[7] Like a private foundation, it solicits formal grant applications and engages in multi-year relationships. Some larger giving circles even hire professional staff to handle their administrative and programmatic concerns.

Giving circles like SVPI, Silicon Valley Social Venture Fund (SV2) and Full Circle Fund in the San Francisco Bay Area often take a venture philanthropy approach, engaging in long-term relationships with nonprofits, funding capacity building and scaling up projects, and providing their members’ professional expertise to the organizations they support.

Giving circles also increase members’ awareness of the organizations doing great nonprofit work and encourage them to develop more coherent, diverse giving plans. As Virginia Tech assistant professor of Public Administration and Policy Angela Eikenberry writes:

Through participation, members are more thoughtful, focused, and strategic in their giving inside and outside of the giving circle. Because they begin to see their giving in the context of issues and needs in the community, in which they want to have some impact, their donations are more targeted. For this reason, members say they have started giving fewer, but larger gifts. This is especially the case for small group and formal organization members.[8]

Thus, the most important impact of giving circles on American philanthropy may not be the money that they give away, but the education they provide to their members and the consequent impact those members have on the size of the philanthropic pie.[9] Giving circles are not the most efficient way to give away significant quantities, but they can be an outstanding medium to learn more about philanthropy, bounce ideas off of peers, and gain access to information about organizations. These activities can, in turn, help you, as a donor, engage more fully and strategically in another avenue of giving. Joining one is a social way to increase your knowledge of philanthropy.

In sum, giving circles are a strategic way to aggregate and focus individual philanthropists’ funds. In return for sharing control over the choice of grantees, you multiply the impact of your dollars and the impact on organizations doing good work.

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