Giving Compass' Take:

• Cyndi Suarez, writing for Nonprofit Quarterly, discusses the prominence of giving circles in the United States and their ability to fill funding gaps for traditional foundations.

• How will giving circles help advance grassroots organizations? What are the potential challenges for donors with the growth of giving circles? 

• Read about the benefits and opportunities of hosting a giving circle. 

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.”

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.

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.

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

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.

Read the full article about giving circles by Cyndi Suarez at Nonprofit Quarterly