“It takes a giving circle,” says Linda Strup of Reston, Virginia.
Strup, one of the founders of the Giving Circle of HOPE, or Help Other People Everyday, is emblematic of the new type of giver and part of a growing trend in philanthropy –people coming together in grassroots, hands-on efforts to effect societal change.
A giving circle is a group of individuals who pool their money and decide, collectively, where to donate that money.
While the tradition of collective giving has been ongoing for generations, organized giving circles have taken off in the past three to five years.
“Our database has almost doubled in the last two years from 220 giving circles to 400,” says Daria Teutonica, director of New Ventures in Philanthropy, a program of the Forum of Regional Associations of Grantmakers in Washington, D.C., a nonprofit dedicated to growing philanthropy in the U.S.
The number of people involved in giving circles has also doubled, she says.
“This is not a flash in the pan,” says Teutonico. “More people are getting involved and making a difference in their communities and many are doing it through giving circles.”
Part of the appeal of giving circles is their accessibility.
Angela Eikenberry, an assistant professor at the Center for Public Administration and Policy at Virginia Polytechnic Institute and State University, and author of the report “Giving Circles and Fundraising in the New Philanthropy Environment,” has identified three basic types of giving circles.
Small circles are much like book clubs, she says, while loose networks gather around events like a potluck dinner to raise money for specific causes.
Formal organizations, which are more like voluntary associations with a board and committees, tend to be larger and more structured.
In effect, giving circles can be as structured or loose, as big or small as their individual members want.
The Giving Circle of HOPE, for example, now boasts 100-plus members who donate $1 a day or $365 a year and can choose to take part in organized volunteer activities.
AsiaNextGen Giving Circle in New York, on the other hand, limits its membership to 13 people who donate $1,000 a year and can choose to tap into their social networks to further help grantees.
Because giving circles are stepping up to fill in the ever-widening gaps left by government spending cuts, nonprofits appreciate this new avenue of funding in all its forms, but they can be frustrated by their dealings with giving circles, says Eikenberry.
One of the strengths of giving circles is they allow people who may have had limited knowledge about philanthropy to learn more and grow as philanthropists, says Eikenberry.
“As they grow, their interests change and so they move on to new causes, and for the nonprofits in need of multiyear funding, that’s tough,” she says.
Perhaps most problematic is the denial, in some cases, of value-added potential in the form of additional volunteers, in-kind resources and connections.
Giving circles bring money, but more important in some cases are the benefits that come from members’ networks and connections, says Eikenberry.
“Worst-case scenario is the giving circle that has a lot of demands and doesn’t want to share the connections,” she says. “Some nonprofit executives say it’s great we have this funding but at the end of the day it was a lot of work and it’s not clear what long lasting benefit there’ll be if any.”
This was not the case for the Asian Outreach Program of the Child Center of New York, recipient of AsiaNextGen’s first grant in 2006.
“We don’t miss any opportunity for funding,” says Dr. Agnelo Dias, clinic administrator. “This was my first experience working with a giving circle, and I was really impressed with the scope of their questions and commitment to giving back to their community.”
Thanks to AsiaNextGen’s $20,000 donation, the clinic was able to hire two Chinese-American social workers part-time to reduce the waiting list for services.
It also received free computers and a much-needed paint job for its offices.
For her part, Michelle Tong, co-founder of AsiaNextGen, is in it for the long haul.
“Part of our mission is to educate young Asian professionals about how they can get involved,” she says. “This has largely been an untapped area in philanthropy and many of us just don’t know where to start. We would like to help them structure their own personal philanthropy.”