Giving Circles Surge in Popularity: What It Means for Nonprofits

According to the Dorothy A. Johnson Center for Philanthropy, giving circles have tripled in number since 2007, to about 1,600 groups with more than 46,000 members in the United States. With almost $1.3 billion in grants already made by giving circles, your nonprofit should ensure it’s on the circles’ radar.

Small groups, big impact

Giving circles sometimes are confused with crowdsourcing, where the number of donors can run as high as thousands of people. Giving circles, on the other hand, generally gather small groups of people to make an impact by pooling their money to donate to a cause or organization — generally more than they could give individually. Members of a giving circle might donate their time, too, whether as volunteers or as activists, or both.

Circles can represent groups of friends, neighbors, family members, coworkers or people with no other connection outside of the group. Regardless of who’s involved, a hallmark of giving circles is that they conduct research on potential causes and grantees and make a collective decision about what and whom to support. Immediacy of action is another common characteristic. In contrast to donor-advised funds (another giving vehicle that has surged in recent years), giving circle funds are unlikely to sit undistributed for long periods of time.

Some giving circles also are supported by community foundations. The foundations offer services to donors who want to establish charitable funds without assuming the administrative and legal costs typically associated with launching independent foundations.

Potential benefits

Researchers have found that membership in giving circles tends to produce donors who give greater amounts and to a wider variety of organizations. They’ve also learned that giving circle members donate both to people like themselves and to those who aren’t like them. The breadth of giving means more nonprofits receive support. That includes organizations that usually don’t receive much, or any, government or foundation support. As noted, those members often will take on more active roles, which is invaluable for smaller organizations with limited resources.

In addition, giving circle funding can jumpstart a new project or program. Seeing immediate results provides a positive experience for the givers that encourages further activity. And getting more people into giving is always good, especially when they start at a younger age. These givers have the potential to become some of the most loyal supporters and passionate ambassadors that an organization has.

Signs of success

For confirmation that giving circles have become popular with donors, look no further than Charity Navigator. The popular nonprofit watchdog group is now hosting a directory of giving circles on its website. The Global Giving Circle Directory compiles information on more than 2,500 donor groups, supporting a wide range of causes. In partnership with Grapevine and Philanthropy Together, the aim is to expand the number of giving circle participants to 350,000 people and increase contributions by another $1 billion to causes worldwide.

The latest version of the searchable directory was released in April 2021. It includes each group’s size, location and areas of interest. The directory also reports the amount a circle collects, the amount members are expected to contribute and nonprofits that have received funds from the circle. Although the directory is intended for individuals looking for giving circles to join, your nonprofit can use the information to connect with groups that share its mission.

Check it out

Connecting with giving circles could provide your organization with substantial financial resources. Diversifying your revenues is always important, but never more so than now, when much of the nonprofit landscape is changing. 

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