Circles, A New Angle

eJewish Philanthropy welcomes London journalist Celina Ribeiro with this post on donor circles:

In a world where reinventions of the wheel are announced with startling regularity, a new kind of circle has emerged as a new and potentially valuable fundraising mechanism.

Donor circles, practiced successfully in the US for more than a decade, are beginning to gain interest from British charities, but remain, by and large, unheard of or misinterpreted.

Across the proverbial pond, the donor circle is often confused with the more established ‘giving circle’, however, assuming that the co-use of the word ‘circle’ means that circles ‘giving’ and ‘donor’ are in some way related is an understandable – but wrong – conclusion. Where giving circles are self-organized groups of donors acting independently of charities, donor circles offer supporters – and charities – something very different.

While no two circles are the same, in essence the donor circle works thus: an organization identifies a project or causal area it wants to attract funding for; it asks a number of individuals for a minimum, substantial gift and to join a group focused on the topic; and then those who join the group (typically consisting of less than 25 members) meet regularly with each other and get high levels of information from members of the charity – both senior and on the ground – about the project, the issues and the impact of their philanthropy.

Nicky McIntyre, executive director at Mama Cash, a Netherlands-based international women’s fund, was part of the donor circle pioneering organization the Global Fund for Women, in the US. The Global Fund and fellow American women’s organization the Ms Foundation were the key leaders in the field of donor circles.

“The goal is that there is both a commitment from the donor to make a major gift and also that the donor is being educated in such a way that it will increase their commitment in both giving and activism,” says McIntyre.

The very first donor circle established by the Global Fund for Women in the early nineties selected the topic of trafficking of women and girls and sought donors to make a large donation earmarked for the specific area of interest. Twelve donors were invited to form the group; as a group they then traveled extensively to projects and ended up giving more than $200,000 (US) over a period of between two-and-a-half to three years.

“They did not dictate how the funds were used other than that it needed to go to combating trafficking women and girls,” says McIntyre. “Those donors became so engaged and knowledgeable about the issue, about which there was very little knowledge at the time, that they actually held the first ever conference about the topic in the US. They made a documentary film about trafficking that is still an important resource.

“Many of those women who were part of that circle moved on to define themselves as donor-activists – these are mostly women of inherited wealth. They really began their journey into being donor-activists and getting other donors involved, particularly in social change philanthropy.”

Eight years after the first circle, the Global Fund for Women looked at what had happened to the members of the original trafficking group. Most circle members remained major donors to the organization, most had become major donors to other organizations and many had written the Global Fund for Women into their will.

“These became almost like ambassadors who could go and talk confidently about the work of the organization because they were brought right into it.”

The circles, however, are far from a straightforward way of cultivating major donors en-masse. Like the heralding of the new philanthropist years ago, the donor circle philanthropist is a unique, engaged, valuable and potentially long-term supporter to a cause.

“It won’t appeal to everybody, but there’s an element of donors that do want to be involved in these kind of groups,” says McIntyre.

Hearts and minds

For many of those that sign up for donor circles, philanthropy is secondary to community as a motivating force. The ability to build a different kind of social network can be a major draw for circle members.

In McIntyre’s experience, particularly with donors of inherited wealth, this can sometimes detract from the focus on the charitable work. “Sometimes in the three-day meetings it gets more into people’s personal lives, their hang-ups about money and the challenges of being a very wealthy person. Sometimes that worked for groups and sometimes it didn’t.”

For many, however, it is simply about connecting with a group of people like them, who care about an issue and believe in a particular approach to solving it.
McIntyre says that donor circle participants are enticed by the level of education about issues and engagement with projects, but that more than anything it is a desire to understand the world that motivates them.

“They like to have someone else say ‘what does this all mean’, to have someone help them understand the world,” she says. “It’s not just about understanding a particular issue or getting to know a particular group, but making sense of a hugely changing political, socio-economic landscape in this world.

“I think that’s what some people are looking to organizations for – to make sense of what is happening out there.”

In this respect, while conceding that she has worked primarily for women’s organizations, McIntyre says donor circles typically have worked best with female donors across the board. “I think it’s particularly attractive to women donors, but it needn’t be solely attractive to women donors,” she says.

“We know that women donors are more likely to want to seek that sense of community than male donors. They think about their philanthropy in a different way. They tend to have a closer feeling about an organization, more of an instinctual feeling about what’s going on. So it’s less about reading reports and more about ‘what’s my gut telling me about what this organization is doing?’

“A desire to be in community with other people and around like-minded people is important for women donors, broadly speaking.”

Sizing up the circle

Regardless of the gender of participants, however, McIntyre warns that charities embarking on donor circles should be wary of how intense such a scheme can become.

In the Global Fund for Women’s first donor circle, the charity flew participants to project sites across the world and regular meetings on the US West Coast. The effort proved not only a drain on charity resources and time, but was extremely time-consuming for the donors involved – limiting the group to people of inherited wealth.

As more donors who had worked for their wealth became interested in donor circles, the Global Fund for Women modified the donor circle program to make the system less staff-intensive and accommodate a breed of donors who are time-starved, but hungry for engagement.

Instead of ferrying donors around different locations, the new members of what the charity dubbed ‘donor circles lite’ relied more heavily on communications technologies. In a group concerned with women’s rights within Islamic traditions and religion, the charity set up regular 90-minute conference calls to which all donors were invited. In one instance, an adviser from Lebanon was brought in on the call to talk to the donors about what was being done at ground level, with the donors being able to put questions directly to staff working on their projects.

Getting it rolling

By its nature, a donor circle is earmarked funding. But the decision on whether to allow the donors to choose how to restrict the funding is in the hands of the charity.

Allowing donors total choice, McIntyre suggests, could lead to more popular projects which have had greater media coverage being selected by the circle as opposed to the greatest need or best program.

She says that her charities had stringent application processes for project funding and so did not offer their donor circles a choice of project. “We explained [our system of vetting] to the donors and on more occasions than not they would say ‘yeah, I get that and I’m comfortable with that. Just let me know how you are spending that money and tell me the challenges of these groups. Keep me engaged’.”

McIntyre argues that the desire of circle members to pick a group is actually about feeling connected to the program, and by providing high levels of information and access to program staff, the charity can provide that connection without relegating power to the whim of donors.

Underestimating the amount of effort it will take to deliver this connection effectively is an easy trap to fall into, McIntyre warns. Returns may be immediate or they could be longer-term, and a charity could end up pitching an entirely inappropriate level of engagement to donors. “Take time to really map it out and talk to people and determine what level of ambition, time, energy and money you’re going to put into it,” she says.

And, once strategy is bottled up, another can of worms is opened. In donor circles personality has the power to derail. “If you have ten people brought together to engage and learn and there are two people who can’t stand each other, it’s just going to be totally disruptive,” says McIntyre.

It might not be just that ‘people give to people’, but as donor circles recognize, people also give around people.

Originally posted on Civil Society Fundraising; reprinted with permission.