Two new reports from the Women’s Philanthropy Institute point to the increasing influence and diversity of giving circle (GC) members, and the challenges present when established foundations serve as “hosts” for GCs.
The reports are authored by the Collective Giving Research Group (CGRG) which was formed in 2015 as a collaborative “to explore and understand the dynamics of giving circles and other forms of collective giving.” Its members include scholars and consultants in the areas of philanthropy, public affairs and public administration, and it has institutional support from the Women’s Philanthropy Institute (WPI), which is part of the Indiana University Lilly Family School of Philanthropy. Funding for the reports came from the Bill & Melinda Gates Foundation via the WPI, and the Charles Stewart Mott Foundation.
Giving circles typically comprise groups of individuals who donate collectively to an organization, cause or project of common interest. The difference between a GC and a typical philanthropic organization or non-profit is that donors themselves choose what to fund. Larger giving circles can have hundreds of voting members and a yearly membership fee (or required annual donation) of $1,000 or more. The Greater Indianapolis 100 is one such charitable women’s giving circle group; it makes gifts of $100,000 and membership costs $1,000 annually. Of course, a GC can also be quite modest and informal – a half-dozen people meeting in a member’s living room and deciding to pool their money for a charitable purpose, whether that be sending a needy local child to summer camp, protecting a slice of wetland, or supporting micro-loans for African women.
According to the CGRG, there are triple the number of US GCs now than a decade ago, and GCs are estimated to have given roughly $1.3 billion to charitable causes since their inception.
Women are Key to GC Growth
An earlier (2017) report from the CGRG on U.S. GCs noted “Women dominate giving circle membership, making 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.” A separate 2017 CGRG report stated that women’s GCs represented nearly half the groups in their database.
Giving circles have increasingly become the point of entry for women, and particularly women of color, in charitable giving. Giving circles are places where groups underrepresented in traditional philanthropy can organize as women, or as a subset of women (LGBT, Asian, Latinx, African American) and find ways to support their own communities. GCs often give to local initiatives, are less traditional in their giving than typical funders, and more likely to support women and ethnic and minority groups.
The new CGRG report on GC membership indicates that compared to non-members, GC donors “give more money and time, give more strategically, and are more engaged in civic and political activities.” Moreover, GC members take greater advantage of their social networks in obtaining advice about philanthropy, bring in a broader range of information, and consult a wider array of people for advice than do non-members. The GC movement is relatively new, but already there are differences between GC veterans and members who have joined within the last year. Newer members tend to be younger, more ethnically diverse, and have lower incomes. Longitudinal studies, the report suggests, will reveal to what extent participating in a GC changes donor attitudes and preferences over time, and whether the diversity among new GC members is sustained.
The “Dynamics of Hosting” report focuses on GC hosting, and notes that community foundations and similar organizations are promoting and adopting giving circles to cultivate a more diverse donor pool, strengthen and expand community engagement, and foster a philanthropic culture. The CGRG findings on hosting were obtained in the summer of 2017 from survey data that included responses from 86 community and public foundations in 33 states. Of the 86, two-thirds host one or more GC groups. Over 90 percent of hosts indicated that they wished to affiliate with a GC in order to promote a culture of philanthropy.
The most common reason for the host-GC relationship is for the host to act as a fiscal sponsor in which it provides 501(c)(3) status, and receives donations and disburses grants for the GC. Hosts may also help a GC reach a specific group of donors, and work with a group of donors in establishing a GC to address a shared priority. Hosts may also play a role in communications and outreach, event planning, and regulation oversight. Hosting a GC is labor intensive, and some hosts charge a flat fee, while others take a percentage of annual CG assets. Some foundations do the work gratis, often as part of a mission to reach underserved communities and promote philanthropy. Regardless, the report indicates that most hosts did not feel that fees met their expenses.
No doubt, community foundations and other such entities have taken notice of the steady growth of giving circles and realize that partnering with such groups is the wave of the future. As the CGRG hosting report concludes, “Giving circles and collective giving groups hold enormous potential for broad outreach, flexible and authentic engagement of donors, and a more democratic approach to building a culture of philanthropy.” As GCs evolve, some of the questions surrounding host vs GC costs and benefits will likely be better answered.
Full reports are here.