Giving Circles in the U.S. Grow: What Does That Mean for Institutional Philanthropy?

May 31, 2017; Washington Post

Giving circles in the U.S. have doubled over the last eight years, according to an upcoming study led by Angela Eikenberry, a professor at the University of Nebraska. Based on preliminary study data, there are more than 1,300 active giving circles and, in addition, 525 chapters of giving circle federations in the U.S.

“These groups are emerging as traditional philanthropy becomes more bureaucratic,” said Eikenberry. “Over the last decade, they are forming to make things more personal, giving directly to organizations where people live.”

The national study, a collaboration between the University of Nebraska and the Women’s Philanthropy Institute at Indiana University-Purdue University, identified 1,314 giving circles and 525 chapters or affiliates of giving circle federations.

The nonprofit Dining for Women (DFW), which launched in 2003, is an example of a global giving circle. It has 8,000 members in 409 chapters in 45 states. According to its website, it is “dedicated to transforming lives and eradicating poverty among women and girls in the developing world…one woman, one girl, one dinner at a time.” Members host dinner parties, usually with food themed according to the country to which they are giving, and pledge to donate what they would have paid for the meal if they had dined out. Each month, the national DFW awards a grant between $35,000 to $50,000 to a nonprofit. Ten times a year, it also selects previously funded nonprofits to award $20,000 a year for three years of ongoing support. DFW has a goal to increase its membership to 20,000 by 2020.

Giving Together, a women’s circle focused on helping other women, gives to nonprofits in the Washington area serving low-income women and children. Each year, it focuses on a theme. In 2016, its 60 members gave a total of $63,000 three organizations addressing hunger—a food recovery and redistribution center, a food bank and pantry, and a community kitchen. Members also volunteer at organizations, which connects them to people they may otherwise not know and helps them better understand the issues in their community.

Black Benefactors is a Washington, D.C. circle that encourages giving and community service in the Black community and businesses of the metropolitan area. In 2015–2016, the group donated $10,000 to three nonprofits, including Chess Girl DC, a chess instructional program for girls started by D.C. resident Robin Floyd-Ramson, “who wanted her then 5-year-old daughter to have an opportunity to play chess with other girls.” She said, “These girls are learning critical life skills like managing tough decisions acting strategically and considering options.”

Lynn O’Connell, DFW’s grants chairwoman, belongs to four giving circles. She said, “No circle looks or acts like any other. Dues, size, structure, and mission are all a little different. It’s not just about writing a check, but the circles area a major force in helping people learn about philanthropy and about nonprofits.” Further, because giving circles have very little overhead, most of the money raised goes directly to grants.

Giving circles often make grants to nonprofits that are too small for traditional philanthropy. For members, they promote community engagement, grassroots philanthropy, and learning about issues important in their community of focus. A previous giving circle study by the University of Nebraska found that people who join giving circles give more, volunteer more, and are more engaged in their communities.

It’s also interesting to contrast the giving circle form as it relates to the trend away from “intermediated” giving, which has weakened general funds in United Ways and community foundations and boosted the use of donor-advised funds. Perhaps this tropism is less about greater individualism and more a “no confidence” vote on past intermediaries.—Cyndi Suarez