Giving Circles

Keesha Walker and Dustin F. Williams, CFRE

Definition

Giving Circle: a collaborative philanthropic tool that leverages small amounts of money to make a more substantial cumulative impact. Related to investment clubs, frequently sponsored by charitable organizations (foundations), and are often democratic in their structure and practice.

“Giving circles are voluntary groups that enable individuals to pool their money (and sometimes their time as volunteers) to support organizations of mutual interest. They also provide opportunities for education and engagement among participants about philanthropy and social change, connecting them to charities, their communities, and each other” (Eikenberry 2016).

Historic Roots

Giving circles and have become increasingly popular in the last two decades, alongside the growth of related charitable vehicles such as venture philanthropy and donor-advised funds. However, the existence of giving circles is not entirely new- the concept has been in existence for years (Forum of Regional Associations of Grantmakers) and is a “resurgence of an old tradition of generosity and caring” (Brown 2017). Giving circles present a modern version of an old thought, joining those “throughout history... [who] have joined together to make life better in their communities” (Forum of Regional Associations of Grantmakers).

Although giving circles, or their precursors, have been in existence throughout history, groups fitting the concept’s modern definition are new but proliferating, with giving circles in the U.S. tripling from 2007-2018 (Bearman and Franklin 2018). This builds on the American tradition of voluntary associations, which expanded rapidly in the early 1800s when Alexis de Tocqueville noted the propensity in the U.S. to form associations for social and philanthropic purposes.

Importance

Giving circles increase the level of funding available to charitable causes and allow individual donors to have a more significant impact when giving (Forum of Regional Associations of Grantmaking). They also “provide an entry point for donors with lower income levels and a desire to become involved in charity work” (Brown 2017), widening the demographic span of those who wish to donate, regardless of limitations such as age, race, gender, and socioeconomic status.

“Giving circles enable people with less discretionary money to have a bigger impact on a particular issue, neighborhood or nonprofit” (Caumont 2005). This also “proves that the wealthy are not the only ones who can make a difference in their communities” (Baker-Hallett 2005).

Since their inception, giving circles have proven to be a useful tool in funding worthy causes. They have involved over 150,000 people in giving over $1.29 billion (Bearman and Franklin 2018). Another way in which giving circles prove to be of importance to society (albeit superficially) is that they tend to appeal to various types of donors (Forum of Regional Associations of Grantmakers). Because donors can join with others who possess similar interests and beliefs, and because they can participate in the decision-making processes, they are more likely to become involved in such charitable groups (Forum of Regional Associations of Grantmakers).

Another notable change surrounding the existence of giving circles is the fact that women are becoming more noticeable in terms of charitable forces. Baker-Hallett states that “the majority (57 percent) are women-only or majority female, and 42 percent involve an even mix of men and women (Baker-Hallett 2005).

Regardless of their causes, it appears that giving circles are becoming a preferred way to give for many people. This can be attributed to the fact that the focus is “all about the members” (Baker-Hallett 2005) and provides a “democratic, grassroots-based, bottom-up alternative to conventional top-down philanthropy” (Eikenberry 2016). The ability to be a part of the decision-making and collective impact is a crucial factor in what draws people to giving circles.

Ties to the Philanthropic Sector

Giving circles tie individuals to the nonprofit sector through relationships with staff and a level of access that would usually be reserved for larger donors (Eikenberry 2006). Giving circles often ask nonprofit directors to present about the issues they are tackling in their communities. Giving circles also frequently volunteer and provide logistical support to various organizations. These educational experiences, provided formally and informally to members, work to strengthen the bond with local causes, creating more civic-minded communities.

Giving circles also tie nonprofits to their communities, as they often “make grants to nonprofits that are too small for traditional philanthropy” (Suarez 2017). As most giving circle money goes to “small, local nonprofit organizations or to individuals in need or doing good works,” giving circles provide an opportunity to become familiar with the issues their communities face and the array of solutions available. They subsequently have the compelling opportunity to decide how they will respond.

This has a lasting effect on the individuals who participate, as a study found that “people who join giving circles give more, volunteer more, and are more engaged in their communities” (Suarez 2017).

Key Related Ideas

• Identity-Based Philanthropy: “a growing movement to democratize philanthropy from the grassroots up by activating and organizing its practice in marginalized communities, particularly communities of color. Simply described, it is the practice of raising and leveraging resources by and from a community on its own behalf, where ‘community’ is defined not by geography but by race, ethnicity, gender, or sexual orientation” (W.K. Kellogg Foundation).
• Venture philanthropy: application of certain business practices to a nonprofit context, similar to those used by investors in for-profit businesses. First practiced by the Peninsula Community Foundation in 1984, the term was developed in 1969 by John D. Rockefeller. Venture philanthropy takes a long-term approach to the use of organizational funds and uses a business-like process to acquire new funding, focused on ROI (return on investment). Synonym: Impact Investing.
• Donor-advised fund: a philanthropic vehicle that allows a donor to make charitable gifts to a holding fund and subsequently direct distributions to various nonprofits over time. Allows donors to receive tax benefits all at once, while potentially making a longer-term impact than they could have otherwise.
• Community Foundations: grantmaking public charities that are dedicated to improving the lives of people in a defined local geographic area. They bring together the financial resources of individuals, families, and businesses to support effective nonprofits in their communities. Community foundations vary widely in asset size, ranging from less than $100,000 to more than $1.7 billion (Council on Foundations).

Important Related People

• Dr. Angela M. Eikenberry: David C. Scott Diamond Alumni Professor of Public Affairs and Professor of Public Administration at the University of Nebraska Omaha. Dr. Eikenberry is a leader in research on giving circles and has published several papers detailing their proliferation in the U.S. and abroad.
• Colleen S. Willoughby: an early pioneer in the giving circle movement. She co-founded the Washington Women’s Foundation in 1995 with four other women. “Together, they gathered over a hundred smart, talented, and motivated women, who agreed to combine resources to tackle the most complex issues facing [their] communities. The result was a then-new model of women-powered philanthropy rooted in community” (WA Women’s Foundation).
• Nausheena Hussain: social justice activist and founder of Reviving the Islamic Sisterhood for Empowerment. Hussain created the organization’s first giving circle in a collaborative process that examined cultural traditions in relation to philanthropy to increase their impact. She told GivingTuesday.org, “if we make a more conscious effort in giving where we can see the most impact, perhaps we can make a bigger change in our communities on issues that directly affect us” (GivingTuesday).

Related Nonprofit Organizations

• Catalist: empowers women by supporting the creation, development, and expansion of collective giving through informed grantmaking. They give a national voice to the high-impact collective giving movement and accelerate the power of independent affiliate organizations. (www.catalistwomen.org) See also: Womenade organizations (ex: www.womenadeboston.org)
• Giving Circle of Hope: an organization that seeks to make a difference in the community with monetary grants and gifts of time. Associated with the North Virginia Community Foundation, the organization allows its members to contribute as little as a dollar a day. (www.cfnova.org/our-programs/giving-circle-of-hope)
• Jewish United Fund of Metropolitan Chicago: provides information on several methods in which funds are raised for charitable purposes. The organization’s web site defines giving circles, how they function, and the benefits of such organizations and attempts to reveal information regarding giving circles that are currently in existence. (www.juf.org)
• Universal Giving: an organization that provides those who are currently involved or wish to become involved in giving circles a medium of donating towards deserving charitable sources. With many of its resources online, it allows individuals to work with others who have shared values and provides links to other sources geared towards charity. (www.universalgiving.org/about_us/services-universal.jsp;jsessionid=85F05D1CBB1A08A0AF1E8DA4A5BEE083)
• Social Venture Partners: an organization that “helps those out to do good, do better – bringing together donors, nonprofits, and social enterprises so we can make a greater collective impact.” SVP has over 40 affiliate partners and “cultivates effective philanthropists, strengthens nonprofits, and invests in collaborative solutions.” (www.socialventurepartners.org/what-we-do)

Reflection Questions

Would you join a giving circle if given the chance? Why or why not? If so, what organization or cause would you want the giving circle to fund?

Related Learning to Give Resources

• www.learningtogive.org/resources/donor-advised-funds
• www.learningtogive.org/resources/community-philanthropy
• www.learningtogive.org/resources/cooperatives-and-philanthropy
• www.learningtogive.org/units/character-education-caring-grade-6/circle-caring

Bibliography and Internet Sources

• Baker-Hallett, Sonya. “Giving Circles’ Offer a Way to Make a Change.” IndyStar.com.indystar.newspapers.com/image/127411904/?terms=%27Giving%2Bcircles%27%2Boffer%2Ba%2Bway%2Bto%2Bmake%2Ba%2Bchange
• Bearman, Jessica, and Jason Franklin. 2018. “DYNAMICS OF HOSTING Giving Circles and Collective Giving Groups.” Collective Giving Research Group. November. https://scholarworks.iupui.edu/bitstream/handle/1805/17744/giving-circle-hosting18.pdf.
• Brown, Carolyn M. 2017. “How To Join or Create A Giving Circle.” Black Enterprise. Black Enterprise. September 28. www.blackenterprise.com/join-create-giving-circle/.
• Caumont, Andrea. “Giving Funds Provides Flexibility.” WashingtonPost.com. www.washingtonpost.com/wp-dyn/content/article/2005/11/05/AR2005110500289.html.
• “Community Foundations.” 2019. Council on Foundations. https://www.cof.org/foundation-type/community-foundations-taxonomy.
• “Cultures of Giving, Energizing and Expanding Philanthropy by and for Communities of Color.” 2012. W.K. Kellogg Foundation. http://www.philanthropy.org/seminars/documents/CulturesofGiving_WKKellogg_ExecutiveSummary_January2012.pdf
• Eikenberry, Angela M. “Giving Circles: Growing Grassroots Philanthropy.” Nonprofit and Voluntary Sector Quarterly 35, no. 3 (September 2006): 517–32. doi:10.1177/0899764006287482.
• Eikenberry, Angela. 2016. “Could Giving Circles Rebuild Philanthropy from the Bottom Up?” Nonprofit Quarterly. February 4. nonprofitquarterly.org/could-giving-circles-rebuild-philanthropy-from-the-bottom-up/.
• Forum of Regional Associations of Grantmakers. www.givingforum.org/givingcircles/allabout.html.
• “Giving Circles: A New Name for a Very Old Model of Philanthropy.” 2019. GivingTuesday. https://www.givingtuesday.org/blog/2019/05/giving-circles-new-name-very-old-model-philanthropy.
• Suarez, Cyndi. 2017. “Giving Circles in the U.S. Grow: What Does That Mean for Institutional Philanthropy?” Non Profit News | Nonprofit Quarterly. June 2. https://nonprofitquarterly.org/giving-circles-u-s-grow-mean-institutional-philanthropy/.
• U.S. Securities and Exchange Commission. Investment Clubs. www.sec.gov/answers/clubs.htm.
• “Who We Are.” 2019. WA Women's Foundation. 

This briefing paper was edited by a student taking a philanthropic studies course in 2019 at The Lilly Family School of Philanthropy.