Giving Circles - Structure and Function

Structure and Function

Giving circles as they currently manifest themselves are a new trend, but they are built on old traditions dating back hundreds of years to mutual aid societies and other forms of giving for the community. Several years ago, giving circles were predominantly composed of women. Giving circles are now more diverse in race, age and gender, although women continue to make up the majority of members.

The structure of the circles can be informal or formal. On the informal side, circles may vote and choose an organization to support and each member writes an individual check. Formal circles may have their money housed at a local community foundation and have staff that support the work of the circle. Giving circles can range in size from a handful of members to several hundred.

Individual donors who join or form a giving circle typically seek to build community within their circle through social events, in addition to the economic impacts of the groups.

In a 2007 study, the Forum of Regional Associations of Grantmakers' New Ventures in Philanthropy initiative identified approximately 400 giving circles in the United States, more than double the number from two years earlier.

A survey of 160 circles published in 2008 found that they had leveraged nearly $100 million, $13 million of this in 2006 alone. Nearly 12,000 people took part in the 160 giving circles surveyed; nearly half of circles now have male participants, and the popularity of giving circles is also growing among racial, ethnic and tribal communities as well as in the gay and lesbian community.

Another study conducted in 2005 by Angela M. Eikenberry, an assistant professor at the University of Nebraska at Omaha, found that giving circles generally bring both long-time and new philanthropists to organized philanthropy. For both groups, participation seems to increase levels of giving while bringing “new money” to the nonprofit sector; especially to small and locally based organizations. Members also seem to learn about and give to organizations and individuals, and in areas of interest, they most likely would not have given to otherwise. In addition, members are more thoughtful, focused and strategic in their personal giving because of educational experiences in the giving circle. These findings are based on 30 interviews with giving circle participants, staff, and philanthropic professionals working with giving circles, document analysis, and secondary data.