Giving Circles Growing in Strength and Diversity, According to New Study

Since around 2000, the percentage of American households that give to charity has declined. This shift has many causes, but one is that people often don’t know where to give for impact or results. A way to combat that uncertainty is through shared approaches to philanthropy. Giving circles collect contributions from each participant and determine collaboratively how to give the money away.Giving circles have become one way to spread the “joy of giving.”

And it works! People who participate in giving circles (GCs) become more confident in their giving and engage in additional ways in their communities, as shown by work by Angie Eikenberry and others with whom I’ve had the privilege of working.

This year, two reports continue and augment our knowledge of how giving circles engage donors and can function within a host organization, such as a community foundation. The Collective Giving Research Group and the Women’s Philanthropy Institute find that giving circles help people become more confident donors and while not costless, provide meaningful benefits to the community.

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The first new report, Giving Circle Membership: How Collective Giving Impacts Donors identified that the number of GC’s has tripled in the past decade (2007-2017). In fact, GC’s have given an estimated $1.29 billion to charitable causes.

While GC’s date back a century or more, before 2000 or so, they were generally comprised of older, white women. New GC members are more diverse in terms of age, income, gender and race. For their members, GC’s allow for more focused giving, higher levels of giving and more diverse giving.

Overall, GC members:

  • GC members give more money than peers not in GC’s

  • Give significantly more in volunteer time

  • Become more engaged in their communities than non-GC members

  • Have more diverse social networks

For newer members of GC’s, the motivation to join a GC is to promote social change or find help in giving more strategically, whereas more established members use GC’s to leverage their giving or as a social outlet. Both find value in their experiences with GC’s.

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The second report, The Dynamics of Hosting: Giving Circles and Collective Giving Groups, surveyed eighty-six community foundations to better understand the hosting relationship, as well as the cost and benefits of hosting. Services included by host organizations include tax-deductible contributions, managing donations, communications/PR support, educational opportunities, administrative support, grant solicitations, and recruiting GC members, among other services.

Nearly half (44%) of these host organizations charge a fee based on a percentage of the GC assets, while others charge a flat fee (21%), no fee (16%), or a fee based on percentage of GC grantmaking (8%). However, more than half (55%) of host organizations state that these fees, if charged, cover less than half of the costs associated with hosting.

Host organizations overwhelmingly state that “to contribute to a culture of philanthropy in the community” is a top reason or benefit for hosting a GC, followed by new donor outreach, increasing donor diversity, increasing community visibility and more.

People learn philanthropy as they do everything else and one approach is by giving money away with friends, such as through a giving circle. Other research shows that family discussions matter for how children learn about giving. What will you do this holiday season to continue (or maybe start?) a tradition of giving among your family and friends?



Boards that Work - Lessons from a Webinar

Barbara O’Reilly, CFRE, Principal of Windmill Hill Consulting recently hosted a webinar titled “How to Leverage the Critical Roles of Your Nonprofit’s Board.”  Her message is important for any charitable organization. If you don’t have time to view the free webinar, here is a summary of key points. Barbara and I are both proud to be members of the Association of Philanthropic Counsel.

A strong board with a clear vision of the organization’s mission is critical to the growth and sustainability of any nonprofit. In this webinar, my friend Barbara O’Reilly explored the various aspects of building and maintaining a strong board specifically for nonprofit organizations.

She outlined four tips for success in a nonprofit board:

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Recruitment

It’s critical to get the right people on the board, and not just to fill seats. To get the right people, the organization (CEO, etc.) should look at the current board, and evaluate for gaps in skills and networks that need to be filled. Is there an untapped market for the nonprofit? If so, seek to fill a board seat with someone with knowledge and contacts in that market. O’Reilly suggests creating a grid to map out coverage - both current and desired - to identify gaps for more strategic recruitment.

Additionally, O’Reilly highlighted the point that board recruitment is like hiring: it’s critical to have a clear job description, outline expectations, and have multiple candidates for each board seat.

O’Reilly suggests that finding new board members should be the job of all staff and current board members, looking at current donors, committee members and tapping into personal networks.

Of note, O’Reilly reports that only 36% of nonprofit CEOs say that they have right board to effectively govern their organizations. Recruitment is key.

Orientation

A great board is set up for success from the beginning, which involves a process of setting and aligning expectations on an ongoing basis.

O’Reilly stated that board members should be provided with the organization’s mission, vision, financial statements and/or strategic plan. As O’Reilly stated, “They should see your work in action and meet your program leaders.”

As fundraising is a large part of being on a nonprofit board, members should be given a clear roadmap in terms of fundraising goals, personal expectations and networking.


Empowering Your Board

An effective board knows its mission, has clear expectations of its performance and feels empowered to be a part of delivering on the mission of the organization.

O’Reilly outlined the importance of utilizing your board as additional branches of the nonprofit, allowing them to help deliver the mission of the organization. By keeping board members active, informed and involved, it will empower them to be ambassadors for the nonprofit in the community.


Measurement

Any organization needs to use metrics to measure its performance, and a nonprofit board is no different. O’Reilly suggests using a “Board Report Card” to evaluate its performance. This includes both evaluation of the board as a whole, as well as board members’ self-evaluations.

Going back to orientation, having clear expectations (both measurable and subjective) will allow your board the ability to measure its performance. Aspects of this report card could include attendance, fundraising, financial oversight, support of chief executive, strategic thinking, community building and more.

O’Reilly states that when thinking of fundraising for a nonprofit, it’s about creating a culture of giving. And in this culture, boards are right at the center, focusing on hospitality, integrity, community and gratitude.

Fundraising is much more than transactional: there are people contributing to those numbers. Therefore, board members’ actions in regards to fundraising should “inspire and engage and celebrate those who are supporting you.”

In fundraising, board members play many different roles, including ambassador, closer, donor, cultivator and/or steward.

Overall, creating effective, powerful boards is critical to the growth and sustainability of any nonprofit. O’Reilly outlined some key factors for success in this informative webinar.

To find out more, contact Barbara O’Reilly at Windmill Hill Consulting.