Two new reports from Women’s Philanthropy Institute and the Collective Giving Research Group explore the dynamics of giving circle members and their host organisations.

giving circlesWith their democratic bent and inclusive appeal, giving circles that bring individuals together to collectively donate money (and sometimes unpaid time) to support organisations or projects of mutual interest, have made a big impact in Australia.

Research published in Australia in 2017 suggests that participating in collective giving has the potential to substantially grow philanthropy and build stronger communities in Australia.

In the United States, giving circles tripled in number from 2007 to 2017 and are now located in every state and are estimated to have given as much as US $1.29 billion to charitable causes since their inception.

Yet despite this rapid growth, and their increasing success, little systematic research exists about the range of experiences involved in hosting them and the evolving profiles of members. Until now.

With support from the Women’s Philanthropy Institute (WPI), the Collective Giving Research Group (CGRG) has released two new reports that explore giving circles in more depth: One focuses on the characteristics of giving circle members and differences of impact between new and established members, and the other on the key motivations and benefits that host organisations (typically community foundations) experience.

Both reports point to the power of giving circles to engage diverse donors and can help the philanthropic sector understand how to catalyse, support, and grow giving circles.

Let’s have a closer look.

Giving Circle Membership: How Collective Giving Impacts Donors

The findings affirm previous research suggesting that:

  • Giving circle members give more money and time than donors not in GCs.
  • Giving circle members are more motivated to give for proactive, community-oriented reasons compared to donors not in collective giving groups, who tend to give for more reactive reasons.
  • Giving circle members are more likely to use a variety of giving vehicles, such as a personal foundation, a community foundation or a donor advised fund (DAF).
  • Giving circle members are more engaged in civic and political activities.

New findings include:

  • Giving circle members leverage their social networks more strategically for philanthropic advice.
  • Giving circle members’ social networks are more diverse.

The report also found that new giving circle members (less than 1 year) tend to be more diverse in terms of age, income and race (compared to 1+ year members) and these differences are even more pronounced when comparing new members to 5+ year members.

Motivations also differ for established members and new members. Established members cite the ability to leverage gifts and ‘fun’ as primary reasons for participation, and new member value the opportunity to engage more deeply on a cause or issue(s).

The report challenges the conventional wisdom that ‘birds of a feather flock together’ and the concern that collective giving members – who form groups largely around identities like gender, race, and sexual orientation – may not bring new voices to the philanthropic table. While identity-based giving remains prominent in giving circles, the research shows that members rely on a wider set of people for advice about giving, and those people are more diverse and provide them with new information

Dynamic of Hosting Giving Circles and Collective Giving Groups

Survey data from 86 organisations, two-thirds (57) of which host one or more giving circles, found that despite the efforts and challenges involved, most foundations believe that hosting giving circles benefits them in numerous ways, including helping them build a stronger culture of philanthropy, reaching new and diverse donors, and increasing their visibility in the community.

The most consistent motivation – selected by more than 90% of surveyed hosts – was to contribute to a culture of philanthropy in the community.

Reaching new donors (81%) and a more diverse set of donors (74%) were also top-cited reasons to host a giving circle, followed by increasing community visibility for the foundation (70%). Increasing grantmaking capacity and  filling grantmaking gaps was cited by 43% of surveyed hosts, but many more (62%) said it was a benefit resulting from the relationship.

The research found that hosting relationships often emerge organically and without methodical or strategic forethought as to their design.

Challenges of hosting a giving circle included: staff time required (82%); clear expectations; covering their costs as hosts; technical and logistical challenges such as database management; lack of communication; and differences in mission alignment and priorities.

Surveyed and interviewed host organisations shared specific advice for other organisations considering hosting GC, and this advice can be distilled into a set of six specific recommended best practices:

  1. Clarify expectations and goals internally.
  2. Know the costs of the services and staffing you provide.
  3. Put it in writing.
  4. Allocate adequate staff and other resources.
  5. Empower and support GC leadership.
  6. Establish communication and engagement expectations.

To find out more about these reports and the power of giving circles to engage diverse donors and provide a deeper understanding of the dynamics of this model for giving, go here.

This research was conducted as a follow-up to a 2017 report focused on the scope and scale of giving circles in the United States, which is available here .

For more great research from Women’s Philanthropy Institute read out stories here and here.

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