What is a Giving Circle?
What does the Zawadi Circle in New Orleans have in common with the XX Fund in Los Angeles? They’re both giving circles. A giving circle is a community comprised of people who want to pool their charitable donations and make decisions about its distribution together.
The Zawadi circle is made up by 12 African American members who donated a total of $24,000 over two years to provide extra math tutoring for students in local schools. The XX Fund is a specifically women's giving circle that makes annual grants to non-profit organizations that empower women and girls.
Structurally, giving circles follow a model of participatory philanthropy. In other words, these circles unite a group of people with similar passions or concerns, and allow them to maximize their donations and resources by strategizing a long-term plan to support a cause. Decisions are voted on by every member of the circle, hence the participatory aspect of the model. Giving circles do more research about organizations and needs, and are more likely to consider issues of class, gender, race, and culture when making giving decisions.
Giving circles are not part of a new trend – they have historical roots that go hundreds of years back. Traditionally, giving circles were made up by women, but today that is not necessarily the case. Furthermore, giving circles are on the rise today. Studies find that the number of giving circles in the United States tripled between 2007 and 2016.
While many giving circles are very informal and simply act as a group of neighbors or citizens who decide where to send their checks together, others have a very formal structure. They require annual membership donations, and even channel their donations in and out through a foundation. Members pledge a certain amount annually, and then go to meetings to decide how the pool will be distributed to different organizations and causes.
Members of giving circles report that participating in a circle makes them feel less like an individual donor and more like a philanthropist. In other words, their perception of their donation is less like that of a drop in a bucket, and more like one that is making a real impact. Usually a giving circle has a specific mission or interest, and gives to a non-profit or organization that is closely aligned with them. For example, a group of LGBTQ-identifying people might come together and create a giving circle to give to organizations that promote LGBTQ wellbeing or provide shelter for homeless LGBTQ teens.
Though women’s giving circles are on the rise again, many giving circles identify by race and religion. They are also more easily found on the East Coast, though California is also a host to many circles. In their traceable history, giving circles have raised almost $1.3 billion for charity. Additionally, this seems to be a young person’s game – nearly 50 percent of giving circle members are under the age of 40.
Many giving circles also volunteer their time and skills to support the organizations they fund. They can be a great source of community and friendship for their members, and promote giving in ways that are not possible on an individual basis. Make sure to do some research into giving circles in your area, and see if you can talk to any members about getting your organization on their circle’s radar.
If you have more questions about nonprofit strategy you can always reach out to the DipJar fundraising experts for help. It's what we love to do!