by Felicia Herman

As the Executive Director of The Natan Fund, a Jewish giving circle, for almost a decade, I have long been positively evangelical (so to speak) about the power of giving circles for engaging new people in philanthropy and in the needs of their communities. Giving circles seem to be experiencing new momentum, perhaps due in part to high-profile conversations about collective giving inspired by Laura Andrillaga-Andersson’s work on the subject, Doris Buffett’s Learning by Giving Foundation (in which university students learn about and then practice collective strategic philanthropy), and new research on younger givers that highlights the important role that social networks, communal connections and innovative philanthropic platforms play in inspiring younger people to give.

My work at Natan has been broadened tremendously by some recent cross-cultural conversations about giving circles at Stanford’s Center for Philanthropy and Civil Society, at a Philanthropy New York panel on collective giving, and as part of Natan’s explorations into the needs of the Jewish giving circle field. These conversations have inspired me to think more deeply about the similarities and differences in the roles that giving circles are playing in different communities. I’m very much looking forward to a forthcoming report in the Connected to Give series on Jewish giving that will compare Jewish and other giving circles in considerable depth, but I want to share some ways in which these recent conversations have been shaping my thinking about this powerful philanthropic mechanism.

In all of these conversations, I have been struck first by the strong similarities in the impact that giving circles have on their members, no matter who they are, how much they give or what they choose to support. Aligning closely with research on giving circles produced in the early 2000s (much of which is referenced here), giving circle members and professionals in all of these conversations have confirmed that giving circles successfully engage new people in a thoughtful, strategic and social experience of philanthropy: first generation wealth holders, young people, women, people without significant wealth who nevertheless want a thoughtful and strategic experience of giving, and ethnic, religious and racial minorities.

By banding together and formalizing – even professionalizing – their giving, people new to philanthropy can use giving circles to leverage each other’s financial contributions for greater impact, access the “wisdom of the crowd” to strengthen their decision-making, and uncover new and innovative grantees through a process of strategic and proactive philanthropy that is often difficult for the individual giver to access. For example, since our inception, Natan has focused on funding Jewish and Israeli social entrepreneurs and nonprofit startups. By joining together, identifying “funding innovation” as a goal, and leveraging members’ and philanthropic colleagues’ extensive networks to send the word out about Natan’s funding interests, individual Natan members have access to a host of philanthropic investment opportunities that most individual givers – especially young ones new to philanthropy – would struggle to find, thereby immeasurably expanding their philanthropic investment opportunities.

For Hali Lee, a co-panelist at the Philanthropy New York event, creating the Asian Women Giving Circle offered a similar opportunity to bring individual Asian women into an expanded, “Americanized” form of philanthropy – one that intentionally builds on specific traditions of giving in Asian cultures. Lee based her own giving circle on the model of the traditional Korean geh, a shared savings circle. The people in the geh each contribute a particular amount to the collective pot, and then they take turns taking the pot home, to use however they wish. Lee added an external, philanthropic twist to this established model, turning the geh into a giving circle. “Rather than giving informally to family members, churches or alumni associations,” Hali explains,

giving circle members can give to nonprofit groups that serve local communities. Because it’s shared giving, the gifts can be larger and hopefully, more impactful. Giving circles are a grassroots way of bringing people into a form of civic engagement – philanthropy – from which many have felt excluded.

Taking this a step further, Kashif Shaikh, Executive Director of the Pillars Fund and a participant in the Stanford PACS workshop, shared his aspiration that the Pillars Fund, an American Muslim giving circle housed at the Chicago Community Trust, will lead the way toward the expansion of American Muslim giving. His ultimate aspiration is to create a Muslim communal philanthropic platform similar to the United Way or the Jewish Federations. As a step toward that goal, he says,

we have approached Pillars as its own foundation. We set up a board, we designated a chairman, we have an operational budget and we have professional application procedures set into place – but we are still a giving circle. The idea that a foundation exists solely to strengthen American Muslim nonprofits (which in turn I would argue are strengthening the fabric of American philanthropy) is one that is exciting but also something that does not currently exist.

As all of these examples demonstrate, the impact and power of giving circles far exceeds just the dollars (and sometimes the volunteer time and expertise) that giving circles allocate to grant recipients. Indeed, giving circles demonstrate that philanthropy itself can be a vehicle for identity building, community building and “civic” engagement – organized around any type of community.

For example, at Natan and at the handful of other Jewish giving circles, especially those working with younger people (like the Slingshot Fund, Denver’s Roots & Branches Foundation and the many Jewish teen and youth foundations), participating in a giving circle clearly connects members both to a local Jewish community of peers and friends (within the giving circle itself) and to the Jewish People as a whole. Reading dozens, sometimes hundreds of grant applications from organizations and social entrepreneurs, and participating in the complementary calendar of educational and social events that many giving circles hold, provide an unparalleled experiential education about the Jewish community and an immediate opportunity to connect with and support Jewish communal needs. As one of Natan’s partners, philanthropist Lynn Schusterman, has written recently,

philanthropy has the potential to be as effective as many of the engagement and community-building interventions in which we and other funders have invested so deeply in recent years … Like many of the most powerful Jewish experiences we support, hands-on grantmaking can enable participants to struggle with questions of Jewish values and priorities, engage with Jewish texts and traditions, and wrestle with universal versus particular concerns.

Kashif Shaikh echoes Schusterman’s point about how empowering giving circles can be for members. In his community, as he puts it, “giving circles have the ability to put the power directly into the hands of American Muslims. We control our fate with giving circles. From the very beginning, I wanted to help build something that would not only help American Muslim nonprofits, but also American Muslim donors.”

And yet despite the strong similarities in the potential and power of giving circles, one of the most fascinating elements for me of these recent cross-cultural conversations has been learning about the very different roles that these vehicles play in different communities. In the Asian, Muslim and African American communities, for example, giving circles are clearly a way to create new philanthropic ecosystems that are both faith-inspired and faith-serving. “Asian Americans represent around 11 percent of the U.S. population,” says Hali Lee, “yet we receive less than 1 percent of its philanthropic dollars. So groups of Asian Americans are getting together in informal, creative and fun ways to do what they can to get more resources to those in our community who need it.”

So important are giving circles to the creation of an Asian American philanthropic system, in fact, that Asian American and Pacific Islanders in Philanthropy (AAPIP) created a National Giving Circle Campaign to start 50 giving circles engaging 5,000 people to promote giving, voluntarism and civic engagement among Asian Americans and Pacific Islanders, to strengthen and empower AAPI organizations, and to contribute to the field of philanthropy.

Likewise with the Gill Foundation’s work in the mid-2000s to catalyze the creation of giving circles within the LGBT community. The Denver-based foundation realized in the course of a strategic plan that that “the funding of the [LGBT] movement wasn’t adequate to do the work,” as former Vice President of Donor Resources Patricia Evert puts it – the philanthropic ecosystem did not yet exist. The foundation worked to broaden the base of support for the movement both by reaching out to major donors and by encouraging the development of giving circles, primarily among members of the LGBT community who had previously felt disenfranchised and for whom the giving circle could be an appealing, new way to support and connect to the LGBT community.

In the American Jewish community, however, which has spent a century building an extensive philanthropic infrastructure, charitable behaviors are already the norm. As the recent Connected to Give Key Findings report has demonstrated, 76 percent of American Jews report having made a charitable contribution (to any organization) in 2012. In this context, giving circles are serving as an important alternative mechanism to existing philanthropic institutions, especially for younger people. The younger an American Jew is, the Connected to Give report demonstrates, the less likely s/he is to have given to a Federation, and the more likely s/he is to have given through an innovative philanthropic vehicle like a giving circle. Within this established philanthropic ecosystem, giving circles provide a boutique mechanism that reflects and meets the needs of many contemporary givers. (Although it should be noted that, the last time anyone counted, 68 percent of giving circles were hosted within other institutions. Many Jewish giving circles are hosted within Federations, and the hosting relationship offers a tremendous – and complicated – opportunity to established institutions to bring younger/newer givers into their orbits.)

As Natan continues on its path of both operating a giving circle and thinking about how we might collaborate with our colleagues on strengthening and expanding the Jewish giving circle universe, these cross-cultural perspectives are proving invaluable. The power of the giving circle mechanism clearly cuts across so many different demographics – the infinite customizability of giving circles is part of the strength and power of the model to engage people in philanthropy. Yet we must also pay attention to the important cultural, historical and demographic differences present in different types of giving circles if we are to maximize their value for the philanthropic ecosystem as a whole.

Felicia Herman is Executive Director at The Natan Fund.

This post first appeared on “Smart Assets“, the Philanthropy New York blog, on Thursday, November 14 and is reprinted with permission.