Higher Education and Nonprofits

Giving circles raised $1.29B, study finds

Groups allow people to pool their resources for causes they care about.

December 22, 2017
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A study conducted by the Collective Giving Research Group found giving circles raised $1.29 billion since inception and engaged at least 150,000 people in all 50 states.

There is no formal definition of a giving circle, also known by names such as collective giving group, collaborative group, giving fund and giving project. The study defines it as a group of “individuals who collectively donate money and sometimes unpaid time to support organizations or projects of mutual interest,” describing the practice as a way of “democratizing philanthropy.”

One of the four researchers on the project was Jason Franklin, the W.K. Kellogg Community Philanthropy chair at Grand Valley State University’s Johnson Center for Philanthropy.

“The idea that you can come together with people who are like you or people who care about an issue like you do is a really galvanizing force,” Franklin said.

The study focused on the current scope and scale of giving circles to better understand their impact on donor giving and civic engagement.

It found 1,087 independently run and currently active circles, along with 525 chapters associated with different giving circle networks and programs. The number has more than tripled since the last study, conducted in 2007.

Networks of giving circles have emerged since 2007, with 25 networks now in existence. Today, 45 percent of identified giving circles participate in a network or alliance group. Community foundations, corporate partners and other outside donors view these collective giving groups as an effective way to give, with 52 percent of giving circles receiving additional funds or grants from these sources.

Franklin said giving circles can be a small, independent group of people, but he said the majority of them are housed within larger organizations, such as foundations.

Giving circles attract many types of people, including those who may not typically engage in institutional philanthropy. The study found identity-based groups — including groups based on gender, race, age and religion — make up 60 percent of giving circles and drive much of the growth in collaborative giving.

This collective model of giving is particularly popular among women, who make up 70 percent of all members. While men have a presence in 66 percent of giving circles, they are only the majority of members in 7.5 percent of groups.

The study said giving circles always have been useful for people with low incomes because it allows them to pool their money for a cause, but there now seems to be more participation from people with a wider range of incomes. Today, minimum dollar amounts required for participation range from less than $20 to $2 million, and the average donation amount was found to be $1,312, compared to $2,809 in 2007.

Franklin said this collective giving can be seen as empowering for women and minority groups because it allows them to make decisions about giving, which they historically have not always had the ability to do.

An example of a local giving circle is Power of 100 Women, which seeks to “harness the energies and resources” of women to foster women’s economic empowerment. The group is housed within the Michigan Women’s Foundation, acting as a fundraising arm. The group of women, and some men, has funded and supported the foundation’s programs, including the startup of 100 businesses. A minimum pledge of $3,000 over three years is required to join.

“They are women that have really dedicated their lives to giving back,” said Judy Welch, executive director for the foundation’s West Michigan branch. “The foundation was built upon women understanding philanthropy. And this is another great opportunity for women to give back.”

Franklin said donating money in this way can be more challenging because of the group nature, “but the potential impact for both the giver and the receiver is that much bigger.”

Co-authors of the study include Jessica Bearman from Bearman Consulting, Julia Carboni from Syracuse University and Angela Eikenberry from the University of Nebraska at Omaha.

The study was funded by the Bill & Melinda Gates Foundation, via the Women's Philanthropy Institute at the Indiana University Lilly Family School of Philanthropy, and by the Charles Stewart Mott Foundation.

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