by Sean Stannard-Stockton; originally published in The Financial Times:

Social circles with a square deal for charity

Giving circles are a hot trend in philanthropy. Similar to the investment clubs of the 1990s that brought people together to talk about stock picking, giving circles are social groups where people pool resources and decide which non-profits to fund. If giving circles prove to be a hit, a few years from now cocktail party chatter might include: “I just got a hot tip on a non-profit you should consider!”

…But it is not only baby boomers who are becoming interested in philanthropy and giving circles; there is also increased interest from Generation Y….

The Young Philanthropist Committee of Birthright Israel NEXT NY is a group funded by Michael Steinhardt, the hedge fund legend turned philanthropist. The program has created a 20-person giving circle comprised of individuals in their 20s and 30s who have come together to support Jewish causes in the US. Rebecca Sugar, director of Birthright Israel NEXT NY, was inspired by Mr Steinhardt’s son David, a childhood friend of hers who had started his own giving circle. Each cycle, the 20 participants put up $500 each, which Birthright Israel NEXT NY matches. The young members of the group pitch each other on non-profits they think should receive the money. The finalist organizations present to the group and a winner is selected. After a strong showing by the 2007 group, the Young Philanthropist Committee has launched a second circle and assisted two of its members in starting their own separate circles.

Sean is a principal and director of tactical philanthropy at Ensemble Capital Management and author of the blog TacticalPhilanthropy.com. The complete column is available here.