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?