Giving Circles

Are you feeling alone in your giving?  Do you wish you had more resources to target strategically? Are you sometimes unsure you are funding for the most impact?

You should consider joining a Giving Circle if you are craving community, looking for ways to pool resources with peers, and want to accelerate your learning.

  • What are Giving Circles?

    When you are part of a Giving Circle, you pool the funds you have (or that you raise) with others to give collectively. You meet with your colleagues to jointly select grantees that will receive your pooled funds. Usually, one administrator collects all the contributions, and then disburses the funds.

  • Are all Giving Circles the same?

    Giving circles come in many flavors. A few of the changing variables:

    Who is part of the group. Sometimes Giving Circles are comprised only of funders. Sometimes they blend funders and non-funders. Other times Giving Circles are made up of individuals fundraising for the money to give away. Some Giving Circles are not diverse. Some may consist of one identity group–such as women or young inheritors of wealth. Yet others intentionally cross-pollinate, involving people of various incomes and backgrounds.

    What you do together. Your Giving Circle may simply choose grantees together, often true if you are an informal group of friends. If you are part of a more formal group, you are likely creating joint funding strategies, engaging in peer learning, and may even be training on how to be better funders together. If you are part of a diverse Giving Circle, you may also be exploring issues of money, race, class, gender and power.

    How much and what you contribute.  When giving, your group may want participants to give equally, by ability, or by some other agreed upon guideline.

    How you find grantees.  Some Giving Circles have a formal proposal process, others give to people they know or hear about through their networks or online.

    Who administers pooled funds. You can create an informal Giving Circle with friends by simply having one of your members open a bank account in their name to collect the donations, or you might be part of a formal group, in which case your pooled money will be managed by a public foundation or other nonprofit organization.

  • Why are Giving Circles important?

    Giving Circles foster collaboration, which can:

    Strengthen your impact. When you work together in a Giving Circle, you create common strategies and have greater numbers of allies to move the work forward. You also accelerate your learning by pooling knowledge and training resources. Whether you are a group of friends, or foundation colleagues, you extend your reach and expand the possibilities of who you can fund together.

    Save your grantees’ precious time. Grantees are often overstretched and underfunded. When funders work alone, they can add to grantee stress when they require specific proposal formats, have varied reporting guidelines and request individual meetings, as well as diverse outcomes. By pooling your funding resources, grantees could have access to more money, with less administrative burden, and use it as part of a coordinated strategy.

    Help you reach hard-to-find grantees. Often funders choose to support organizations with strong track records because the due diligence needed to vet a lesser known player is too time consuming. With Giving Circles, each member could research just one or two lesser-known prospects at a time through interviews, research or even site visits. Then return to your circle and share what you’ve learned with your cohort.

    Build community. Giving Circles are an opportunity for people with different backgrounds to build strong bonds. Traveling with a colleague to a grantee site, for example, builds trust. Creating common dreams and making them real deepens relationships. Changing people’s lives together creates life-long friendships.

  • What are the limitations and challenges of Giving Circles?

    Giving Circles also have limitations. They can:

    Close doors on innovation. Just as Giving Circles can open doors with time-saving ways to discover new prospects, they can also close them. Certain grantees can become ‘darlings’ of the Giving Circle, while those outside lose favor. Be watchful of the tendency to become a clique that keeps fresh ideas from coming in.

    Take time away from meeting with grantees. There are only so many hours in a day, and if you are spending them with your Giving Circle cohort, you aren’t in the field with grantees. Make sure meetings and administration are well organized, and that you have agreed to roles, accountabilities and processes in place. Otherwise, your Giving Circle may actually pull you away from the people and ideals you set out to serve.

    Limit your control.  While you may expand your influence by pooling funds, you may not always get your way. If you have a highly focused vision, you may feel that vision gets compromised by joining a group.

  • How can I start a Giving Circle?

    You can join an existing Giving Circle or giving community that is already established, or start a new chapter with a network that offers giving circles. See the resources below for how to get started.

    You can start a new Giving Circle. The Giving Circles Network offers a great step by step guide on how to get started.

    When starting a Giving Circle, you need to designate an administrator that can accept donations and/or grants from members of your giving circle. Administrators can be:

    • A public foundation (administrators are rarely private foundations, which have more restrictions with respect to receiving gifts);
    • A nonprofit, acting as a partner for the Giving Circle; or
    • An individual (if you use this option, be sure they open a separate checking account to keep accounting of funds transparent. Everyone should be able to see the bank statements, if needed.)

    Often your administrator will also be in charge of calling meetings and taking care of administrative tasks.

    If you are not ready to join or start a Giving Circle, but want to connect with other donors who share common values, identities or interests, consider joining a giving community. These peer networks range in size and scope, and can offer an opportunity for learning, inspiration and greater effectiveness. Visit www.givingcommunities.org to explore which networks are a fit for you!

Giving Circles are communities of funders and others pooling money and expertise to give collectively.

Read stories of other funders who have mastered this method

We remind ourselves that we are not trying to replace foundations or create institutions, but rather are trying to supplement the support to our community. Naysayers also think that by donating to a Giving Circle, people will give less to organizations they once funded. This actually tends to be the opposite. As individuals get involved in a Circle, they become more aware of community needs and issues.
-AAPIP