Tamar Snyder writing in The Jewish Week:

Rochelle Kleter never pictured herself as a philanthropist. The first-generation American, born to parents who grew up in the Ukraine, had a hard time finding her place in the Jewish community. “I was one of the only Jewish kids in the public school system” in East Hanover, N.J., she said. “I didn’t know what it meant to keep kosher for Passover. And when I took Rosh HaShanah and Yom Kippur off as personal days, I was made fun of.”

…Kleter is one of a growing number of Jews – men and women, both young and old, the über rich and those who do not consider themselves wealthy – who are joining giving circles, where like-minded individuals pool their money and other resources and decide together where these resources should be distributed. In this tough economic climate, giving circles are becoming even more popular as individuals desire more of a say in where their dwindling dollars are going.

And giving circles “offer a way for people to be philanthropic and make a bigger impact even if they don’t have a lot to give,” said Angela Eikenberry, an expert on giving circles who recently wrote a book on the subject entitled “Giving Circles: Philanthropy, Voluntary Association, and Democracy” (Indiana University Press).

Giving circles range from the informal, in which a group of friends make decisions over potluck dinner, to the very formal – like the Natan Fund- in which members are divided into subcommittees and meetings often feature an educational component, said Eikenberry. Although there are no statistics on how many Jewish giving circles exist, Eikenberry estimates that there are currently more than 500 in the United States, most of which formed after 2000. These giving circles are engaging more than 12,000 donors and giving more than $100 million, according to a 2007 study conducted by the Forum of Regional Associations of Grantmakers.

The growth and popularity of giving circles can be attributed to the overall trend of donors demanding a deeper engagement in philanthropic acts. “People want to be more entrepreneurial in their giving, and at the same time, more engaged in the giving process,” Eikenberry said. Then there’s the benefit of leverage. “People really believe they have more of an impact by combining those funds,” she said.

In surveying 341 current and past members of 26 giving circles nationwide, Eikenberry discovered that the longer members participate in a giving circle, the more likely they are to increase their giving, and give more strategically. Donors involved in a circle’s grant-making decision process give the most overall.

At the UJA-Federation of New York, giving circles (or venture philanthropy funds, as they call them) aren’t viewed as competition for a finite amount of dollars. For several years, the federation has provided staff and back-end resources, such as managing funds for a fee, to groups of active federation donors who wish to allocate specific dollars for specific areas, in addition to supporting the charity’s annual campaign.

The Solelim Fund (“pathfinders” in Hebrew), the oldest of the three venture philanthropy funds affiliated with the federation, brings together couples focused on “roll-up-your-sleeves” philanthropy. “This is one of the few things my husband and I do together philanthropically,” said Ruth Suzman, one of the founding members of Solelim and incoming chair of the federation’s Westchester Annual Campaign. “It’s been a really special way to connect with other like-minded donors, to learn from them, and to expand what we know together both within the UJA and in a broader sense, in the Jewish community in New York and worldwide.”

Bonim Atid (“builders of the future”), which is entering its fifth year, requires a minimum commitment of $50,000 a year for three years. The venture philanthropy fund focuses on initiatives for children in Israel.

Modeled in part on the successes of Solelim and Bonim Atid, a group of women based in Westchester started a new venture philanthropy fund three years ago, known as Neshamot (souls). Members of the women’s-only venture philanthropy fund meet monthly in federation offices and contribute a minimum of $25,000 to $500,000 each. The 20-odd members divided themselves into three groups, each researching projects and organizations focused on a different funding priority. These include alleviating poverty in their communities, helping children in need in the U.S. and Israel, and funding initiatives aimed at promoting Jewish continuity.

…The Natan Fund, the giving circle founded in 2002 by hedge fund managers Michael Steinberg, David Steinhardt, Evan Behrens, and Sender Cohen, has grown in recent years to 70 members and six grant committees, each functioning as its own giving circle. Giving collectively is “more fun” and “allows amateurs to give professionally,” said Felicia Herman, Natan’s executive director. Members of Natan contribute between $3,600 and $100,000 annually, and those serving on a grant committee are expected to donate a minimum of $18,000. Since the board pays Natan’s operating expenses, all donations go directly to grantees.

“The value of Natan is participating in the grant application process,” said Herman. “The interaction around the table encourages you to be more thoughtful than if you were giving on your own.”

With monthly talks by prominent philanthropists and family events including an annual Purim party, Natan has transformed from an innovative way to give to budding projects to a community all its own.

excerpted from The Power of the Circle; posted with permission