From peer-to-peer events to crowdfunding, nonprofits are enjoying the fruits of donors’ independent initiative like never before. The next up-and-coming trend might be giving circles, with tens of millions of dollars per year potentially in play.
Giving circles, at their most basic, are groups of friends, neighbors, and individuals of like concerns that gather to learn about issues that interest them and pool money to fund greater impact, according to Jason Franklin, W.K. Kellogg Community Philanthropy Chair at the Johnson Center for Philanthropy at Grand Valley State University and co-author of The Landscape of Giving Circles/Collective Giving Groups in the U.S.
The study, conducted with funding from the Charles Stewart Mott Foundation and Bill & Melinda Gates Foundation by way of the Women’s Philanthropy Institute at Indiana University, is based on accumulated data of more than 1,000 giving circles, as well as survey responses from representatives of 358 circles.
The data show that that giving circles are becoming increasingly popular with 46.1 percent launched since 2010 as compared to just 5.8 percent prior to 2000. Member donations tend also to be on the higher side. The right to vote on funding recipients requires anything from a $4 donation in some circles to a $2 million donation in others. The average donation amount is $1,312 with the median donation level being $400, per the report.
Survey respondents, representing 33 percent of giving circles identified in the study, reported raising $30.1 million in 2016, of which $27.7 million was granted out. The study’s database showed since-inception payouts of $375.25 million based on information from 37 percent of the study’s dataset. Extrapolated, studied giving circles have granted $1.29 billion since their inceptions.
Giving circles are also notable in that they are women-dominated. Of the 706 circles to describe a common gender identity, 640 were led by women as compared to 42 for men and 24 for members of the LGBTQ community. Overall, 76 percent of participating giving circles indicated that women made up more than half of members. Just 12 percent of groups reported that men made up the majority.
This gender dynamic seems to impact common causes supported by giving circles. Of circle representatives surveyed, 196 (55 percent) reported support of human services causes, while women and girls (191 overall, 53 percent) and education (187 overall, 52 percent) were other causes to draw more than half of circles’ support.
Franklin attributed the large number of women in giving circles to the current dynamics in fundraising and the distribution of wealth in the United States. White males tend to have concentrated power and wealth and nonprofits tend to focus attentions on them. In response, women — and other traditional minorities such as Asian and Jewish Americans — have turned to giving circles as a means of aggregating impact. They have also served as a means of developing nonprofit leaders among minority groups, Franklin said.
Giving circles might be coming down the pike at a similar time as other non-traditional fundraising methods such as crowdfunding, but the notable difference is that giving circles seek coordinated efforts and group education as opposed to individualized giving, Franklin said. Circles are also often focused on local issues as opposed to national initiatives. Nonprofits active in causes supported by giving circles might be well served in simply Googling for local giving circles or reaching out to local community foundations, which house about half of giving circles, though Franklin suggests seeking out more than financial backing.
“It’s not just the check they’ll write, but the engagement that community circles represent,” Franklin said, adding that giving circles might be a strong place to find future board members.
Other key findings from the study included:
* Giving circles also identify by race and religion. Among 117 circles identified by race or ethnic identity, Asian Americans and Pacific Islanders (52) led the way followed by African Americans (38) and Latinos (16). Members of the Jewish faith were far and away the most common religious affiliation among circles, making up 88 of 118 religiously identified circles. Christians were a distant second with seven total circles;
* The study estimates that giving circles have engaged at least 150,000 individuals. The average number of people per circle is 116, while the median is 50 individuals, and the most common number is 100 members; and,
* Giving circles are condensed to the east, with California representing the only state to have more than 50 circles west of the Mississippi River. Other states with at least 50 giving circles are Florida, Indiana, Illinois, Michigan, New York, and Virginia.