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Sunday, 10 December 2017 13:19

Impact of giving circles grows as donation model gains traction

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Impact of giving circles grows as donation model gains traction Infographic by Rachel Harper

Small groups of women in communities across the U.S. have collectively given more than $1.3 billion to charitable organizations since the early 2000s.

That’s according to results of a report released earlier this month by the Collective Giving Research Group (CGRG) on the impact of what are known as giving circles.

The study found women account for 70 percent of membership in giving circles, which have engaged at least 150,000 people in all 50 states and given as much as $1.29 billion since their inception. 

According to the study, Michigan has 65 active giving circles, second only to California. 

Although the average donation has decreased from $2,809 to $1,312, based on results of a similar study done in 2007, giving circles have become more inclusive of various income levels.

The Battle Creek-based Women of Impact giving group established a $100 minimum contribution per member when it was founded in 2012. That contribution was decreased to $50 as a way to open up the group to new members, said Teresa Durham, a founding member and executive director of the Kellogg Community College Foundation.

Like the majority of giving circles, the members of Women of Impact meet quarterly and give anywhere between $3,500 and $5,000 to a charitable organization selected by the group’s members. Since its founding, the organization’s more than 75 members have given more than $84,000 to recipients including the Charitable Union, Safe Place and the Food Bank of South-Central Michigan.

“This gives us an opportunity to provide unrestricted funding focusing in on programs for women and families,” Durham said. “That was really important for us, especially for single mothers in the community and the challenges they face.

“We are really taking a look at how can we as women and leaders leverage our dollars and really make a difference.”

Researchers working on the new study found the number of giving circles has tripled since the 2007 landscape study. Their research identified 1,087 independently run and active giving circles, along with 525 giving circle chapters that are part of collective giving networks and programs. 

According to estimates, about half of all current giving circles formed since 2010 and about 60 percent of these groups were created around a particular identity — based on gender, race, age or religion, for example.

AN ‘EFFICIENT’ MODEL

In the U.S., the giving circle movement first emerged among women, who continue to be the largest group of participants, said Angela Eikenberry, Ph.D., a professor in the School of Public Administration at the University of Nebraska Omaha

Eikenberry served as one of the four researchers in the study.

Some of the things the Women’s Philanthropy Institute found is that women want to be engaged in giving, and giving circles provide more of a hands-on aspect to it,” she said. “It makes it easier to be philanthropically engaged. It’s easier and fun because there are often social aspects to giving circles.”

Members of a giving circle established in Kalamazoo in 2013 meet quarterly at The Union, a downtown restaurant. This gives them an opportunity to have a drink or a bite to eat with other members, listen to presentations, and vote on the beneficiary of their funds, said Danielle Streed, a Kalamazoo attorney and founding member of the city’s Women Who Care chapter, which has about 175 members.

“It’s efficient,” Streed said. “In one hour, they can meet a friend for a drink, learn about what’s going on in specific charities, support their community and still be at their kid’s soccer game.”

Members of Women Who Care have given about $350,000 to various local charities, including the Kalamazoo Literacy Council and the First Day Shoe Fund, which provides new shoes at the start of each school year to students in need. Some contributions are matched by members who are employed by companies such as Pfizer or Stryker.

Streed said the majority of her group’s members are professionals ranging from their early 20s to 70s in age.

“At each meeting, the women who attend are given the opportunity to nominate a charity of their choice and at the beginning of each meeting, we have someone pick three ballots out of a blind ballot box,” Streed said. “Who gets picked out of ballot box is completely random.”

After brief presentations about each selection and a question-and-answer period, members vote on their choice of recipient. To date, 19 different charities have received funding and the executive director of the charity selected attends the next quarterly meeting to give members an update on how they used the contribution.

BROADER SCOPE

While the majority of giving circles are grassroots efforts focusing on specific areas of need in a community, Eikenberry said there are some such as Detroit SOUP and Dining for Women that are much larger in scope and membership.

Detroit SOUP is a microgranting dinner celebrating and supporting creative projects in the city. For a donation of $5, attendees receive soup, salad, bread and a vote. They hear four presentations from groups involved in art, urban agriculture, social justice, social entrepreneurs, education and technology, among others. Since its first gathering in 2010, the group, which includes women and men, has raised more than $132,000.

Eikenberry said Dining for Women is the best example of giving circles on a much larger scale. The organization has 400 chapters throughout the U.S. and focuses on giving to charities and other organizations overseas that work with women and children.

“The money these women would have spent on dinner goes to the charity,” Eikenberry said. “They do this once a month. It’s pretty amazing because it’s relatively small amounts, but they’ve got so many people. They donated more than $5 million between 2003 and 2015.

“Women tend to give more and smaller gifts and these giving circles tend to reflect those smaller gifts, which — when pooled — have a larger impact. It also gives them an opportunity to connect with the beneficiaries.”

ENGAGING NEW DONORS

The top three areas of focus for giving circles are women and girls, human services, and education, according to Eikenberry. While not officially aligned with other philanthropic institutions such as foundations, giving circles play an important role in giving and philanthropy, she added.

“The money is an important part of it, but another important aspect is that it helps organizations to get funding and support from new people and it connects them to new sources that they can use later on,” Eikenberry said. “It’s somewhat of a seal of approval when these giving circles sponsor certain organizations.”

More tangential benefits include cultivating new board members, educating new donors about community issues, taking a more strategic approach to philanthropy, and establishing a more giving and engaged community, Eikenberry said. Community foundations also are providing more intensive outreach and support to giving groups.

“There’s a long-term opportunity for a community foundation to engage with groups of people they don’t usually engage with,”  Eikenberry said. “People engaged in giving circles are people not necessarily engaged otherwise, such as women, people of color and young professionals.” 

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