By Avrum Lapin

Nonprofits are always “on the hunt” for new donors and new sources of support. In recent years, Giving Circles have grown in prominence and significance in the philanthropic landscape. Currently, there are about 1,087 independent giving circles in the US, triple the numbers of these groups in 2007. The rise can be attributed, at least partially, to donors’ strategic shift from broad based giving to more strategic thinking to address specific issues or problems facing their communities, or society in general.

Giving Circles allow the donors to pool their resources and to make a bigger impact together as a group than what they could accomplish separately. Circles are formed when individuals join together to decide where to give their dollars collectively by learning together about their community’s needs and what their philanthropic support can do to help.

Giving Circles can represent a few thousand dollars and a handful of individuals, or larger organizations that make six figure grants and may have their own professional staff. Giving Circles are often started by individuals keen on making a bigger impact than they could on their own. Together they pool their donations and select one or a number of nonprofits, or a particular area of interest or concern, to support.

The rise of Giving Circles in many ways reflects the natural progression of philanthropy today. Giving Circles have engaged at least 150,000 donors nationally, and, as estimated by a recent report, The State of Giving Circles Today by Collective Giving Research Group, contributing up to $1.29 billion to philanthropy since 2007. Giving Circles represent a collective passion for using philanthropy to achieve results and make a real impact. One person may only be able to give $1000, but 20 people giving $20,000 can make a real difference. Giving Circles fund a wide range of project areas to and their funding priorities are specific to each Giving Circle.

In fact, several foundations have dedicated resources to help grow the number of Giving Circles. The Schusterman Family Foundation sees Giving Circles as a powerful way that educated, engaged and entrepreneurial philanthropy can transform both givers and nonprofit organizations. The Foundation supports Giving Circle Incubator, a signature program of Amplifier, that helps individuals and organizations start Giving Circles and think strategically about direction, results and impact. Now in its fifth year, the Giving Circle Incubator will include a learning retreat in New York City, monthly webinars, support from expert coaches, and micro-grants to enrich each giving circle’s experience. The Schusterman Foundation, and others, are dedicated to the notion that Giving Circles are transforming philanthropy to make it more accessible to all and amplify impact on nonprofits and communities.

The preponderance of Giving Circle members are women, with 70% of groups having women as the majority, according to the study. Women play an increasingly important role in philanthropy, and Giving Circles are one expression of this trend. We have explored this trend in a recent post and believe that women are increasingly assertive and play an important role in the philanthropic process. Giving Circles are a fit in many ways for women’s philanthropy as their giving tends to be at least partially if not largely driven by the impetus to give back to their community.

Nonprofits can engage Giving Circles in thoughtful and meaningful ways that will help to attract new revenue streams into their organizations.

1. Focus on Results

There has been a cultural shift in the way in which philanthropy is viewed and done in recent years. Gone is the time that checks are written without delving into financials, and at least a working knowledge of the organization’s capacity to look forward and to fulfill its mission. Peter Buffett, Warren Buffett’s son, wrote in an op-ed piece in The New York Times in 2013, “And with more business-minded folks getting into the act, business principles are trumpeted as an important element to add to the philanthropic sector. I now hear people ask, “what’s the R.O.I.?” when it comes to alleviating human suffering, as if return on investment were the only measure of success.” Buffett explains that the goal of philanthropy should be an impact on the communities that the organization serves. This impact should be measured in a variety of ways, but the most important is if the mission does what it sets out to do.

To best present a clear case for giving when approaching a Giving Circle, focus on the results, on what your organization does to address a need, and how well it achieves its purpose. Showing a clear path from a gift to results and direct impact will help Giving Circles to choose to support your nonprofit’s programs. Success does not need to be defined in terms of dollars alone, but also in terms of impact of those funds.

2. Look for Synergies

Most Giving Circles have dedicated areas of support, and have decided what type of nonprofits that they would like to apply for a grant. For example, Impact 100 in Philadelphia states that they would like nonprofits that apply for a grant to have annual operating budgets above $300,000 and below $5,000,000, target under-served populations, highlight unmet needs in the region and have a high impact on beneficiaries or communities. They also specify that they are looking to target the areas of arts and culture, education, the environment, family programs and those that promote health & and wellness. When applying to a Giving Circle, the key is to make sure that it is looking to fund the kinds of programs and initiatives that are currently a focus of your nonprofit.

3. Engage Members

As with foundations, including family foundations, it is often important to actually know someone who is an active participant and contributor to the Giving Circle if you are to secure funding. Larger Giving Circles may name their donors/members or leaders on their website. There may be information from a recent meeting or event that will list attendees who are members of the Giving Circle. With a bit a detective work, one can connect the dots and discover a connection or a relationship between an existing donor to your organization and a member of the Giving Circle. Asking for an introduction or a chance to present is always a good idea to open the door.

4. Apply for Grants

The majority of Giving Circles have a grant application process that is similar to Foundation Grants. It may sound obvious, but to be funded by a Giving Circle, an “ask” must be made. For those giving circles that grant larger awards the process can be just as difficult as applying to a foundation. For example, Impact 100 Philadelphia members combine $1,000 annual donations to fund multiple large grants of $100,000 and more. The application process mirrors the standard process of submitting a letter of intent, then a full request, including a site visit. The application has firm dates for each step of the process that must be followed.

However, smaller Giving Circles usually have a less formal process. There are some that may simply require a presentation or a letter. These smaller Giving Circles will most likely make less significant grants, but might be more accessible for smaller nonprofits.

To find Giving Circles, it may be as simple as an internet search of Giving Circles in the immediate area. The recent report by Collective Giving Research Group found that 84% of Giving Circles made grants to their local geographic area. Another way to find Giving Circles is to ask a regional community foundation. Additionally, given how broad that the reach of Giving Circles has become, we would recommend that nonprofits engage board members and donors to see if they are a part of any Giving Circles that might be interested in the mission or have a strong connection with someone who is.

Giving Circles seek to grow a culture of philanthropy. By including a large number of people with a relatively low entry threshold, Giving Circles allow a greater number of people to be involved in the philanthropic process and decision making. Donors have the opportunity to experience the power of their gift and the difference it can make for an organization or a community at large. Forward thinking nonprofits can not only apply for gifts and find new sources of funding, but also build relationships with the individual members. By simultaneously engaging both the Giving Circle and its members, nonprofits can expand their donor base. This engagement is an opportunity to create new cohorts of donors who are passionate about the mission and understand firsthand the power of philanthropy.

Avrum Lapin is President at The Lapin Group, LLC, based in Jenkintown, Pennsylvania, a full-service fundraising and management consulting firm for leading nonprofits. The Lapin Group inspires and leads US-based and international nonprofits seeking fund, organizational, leadership, and business development solutions, offering contemporary and leading-edge approaches and strategies. A Board member of the Giving Institute and a member of the Editorial Review Board of Giving USA, Avrum is a frequent contributor to eJewishPhilanthropy.com and speaker in the US and in Israel on opportunities and challenges in today’s nonprofit marketplace.
Visit our website: www.thelapingroup.com
All rights reserved.