Why is this a thing? • Giving Circles

Some Background

The idea of giving circles dates back hundreds of years. In the United States, their precursors were “Fraternal Societies”, founded in the 18th century to fight poverty and teach values like self-reliance, leadership, and thrift. These societies peaked in the early 20th century when millions of Americans lived in impoverished conditions. 

Until the Great Depression and the New Deal, the nation was not awash with insurance companies, so many people invested the resources they had in building their own systems of mutual aid. Members pooled money and parsed out specific types of aid while working within a particular set of principles espoused by the fraternity. 

How It Works

Participants raise or donate money, then vote to disburse it to vetted or mission-aligned recipients who submit grant proposals and perhaps give presentations to voting members. Non-Profit Quarterly data shows, in 2017 alone, giving circles disbursed more than $410 billion.

Giving is especially important at the local level where non-profits can make their case directly and be a part of a grant process. For instance, the American Cancer Society doesn’t need to advertise, but a neighborhood group that provides cancer patients with transportation to chemo treatments is a perfect candidate for a small-town giving circle. 

Giving circles are attractive to life-long philanthropists and those new to giving. Those of more modest means are able to participate, and be rewarded in the satisfaction that their donations are magnified by the group, and the dollars they give go further. 

Around the World

The growth spike in giving circles began nationally in 2007, helping make giving more personal and allowing donors to give directly to organizations locally. 

A collaborative study by the University of Nebraska and the Women’s Philanthropy Institute at Indiana-Purdue University identified 1,314 giving circles and 525 chapters or affiliates of giving circle federations.

There are even global giving circles. Dining for Women has 8,000 members in 45 states “dedicated to transforming lives and eradicating poverty among women and girls in the developing world…one woman, one girl, one dinner at a time.” Members host dinner parties and pledge to donate what they would have paid for the meal if they had dined out.

Magnify Your Dollars

Groups of individuals recognized that, together, they could pool their money and have a much greater impact on their own communities. Many circle members are excited about participating because giving circles brought philanthropy from the purview of the mega-wealthy to every person with a desire to help. 

Smaller non-profits reap the benefits because giving circles add a crowd funding element to their revenues and they do not have to rely on being the choice of “big” donors.

In addition to the satisfaction of being true lovers of mankind, participants are also more aware of the needs and issues in their own communities and are likely introduced to many organizations they would not have known about otherwise. Studies also show that giving circles inspire members to not only give more, but give more strategically because they feel more engaged in their community.

Even if you are not able to give financially, circles not only donate money, but spend time and talent to help non-profits they support raise money on their own. 

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