When it comes to engaging women and people of color, giving circles have been more successful than institutional philanthropy and are on the rise, a recent study has found. The Gates and Charles Mott foundations funded the research.
Giving circles have engaged at least 150,000 donors nationally, contributing up to $1.29 billion to philanthropy since they started, the report estimated. The number of circles tripled from 2007.
As giving circles grow, they engage more people often left out of institutional philanthropy—especially women and people of color. Of the giving circles surveyed, 60 percent were identity-based groups. Women made up more than half the group for 70 percent of the circles. In contrast, men were represented in 66 percent of the groups, but only dominant in 7.5 percent of groups.
Giving circles are still mostly white. White members made up the majority of nearly 85 percent of the groups surveyed. However, about 40 percent reported at least one African American or Latino member and 30 percent reported at least one Asian or Pacific Islander member. Racial and ethnic minorities made up the majority of members in 11.5 percent of groups.
Those numbers aren’t high, but represent more diversity than institutional philanthropy, the study’s authors said.
What makes giving circles more attractive to women and minorities? Hali Lee, the founder of the Asian Women Giving Circle, has some ideas. The circle started out as a Korean savings club, called a “geh.” She and a group of women would pool money, and every month, a different member would take it home and use it however she chose. Lee realized the club had the potential to be more.
“I realized that each of us was making charitable contributions to whatever, but none of us was being very strategic about it,” Lee said. “If we pooled our money, we could do a lot more with our small dollars if we put them together. And we would be more strategic about it because we would have to all argue about where the money would go and defend our choices.” Over the next 11 years, the giving circle donated $850,000.
Lee thinks that the low barrier to entry and welcoming attitude attract the sort of people who join giving circles. “It’s like joining a book club,” she said.
“There’s no pretense. There’s no snobbery,” she said. “It’s a lot of beginners, in a way, who are figuring things out.”
Women and people of color often don’t see themselves reflected in institutional philanthropy, Lee said. “Very few of us think of ourselves as philanthropists. You sort of have to be a rich white guy, or a dead white guy to really think of yourself as a philanthropist, but in reality, most of us are really engaged in philanthropy, right? Whether it’s giving up our time or ideas or volunteering or giving money.”
This isn’t Lee’s only experience with this problem. In addition to her involvement with the Asian Women’s Giving Circle, Lee is part of a group organizing high-net-worth people of color, so she’s familiar with the lack of diversity in institutional philanthropy.
It’s not only women and people of color who are attracted to giving circles. According to the study, they also showed promise in engaging donors outside of the top income brackets. A decrease in the average donation, even as the total amount donated by giving circles grows, suggests the collective giving arrangements are becoming increasingly inclusive of more income levels.
All this has caught the eye of a major player within institutional philanthropy, the Gates Foundation. As mentioned earlier, the study was funded by the foundation through the Women’s Philanthropy Institute at the Indiana University Lilly Family School of Philanthropy.
Gates is in the midst of a two-year exploration of charitable giving of everyday Americans called Giving By All. It’s a counterpart to the Giving Pledge, Gates’ work encouraging philanthropy among billionaires.
Earlier this fall, the foundation also supported a gathering of giving circle leaders in Grand Rapids organized by Amplifier, a network of circles inspired by Jewish values. “Because we know that giving circles are a great way to empower all kinds of Americans—regardless of wealth, age, location, identity or the causes they are passionate about—to give better (and more) by giving together, we pitched the Gates Foundation on the idea of convening leaders,” said Joelle Berman, an executive director at Amplifier and one of the event’s organizers.
The focus of the gathering was pooling ideas about scaling circles to make them accessible to more people and strengthening existing circles, Berman said.
“Our sense is that this gathering is only the beginning,” she said. “It's clear that there's a massive opportunity to more closely unite the giving circle networks for continued learning, collaboration and dreaming, and to elevate giving circles nationally so that even more people can give better by giving together.
So what comes next? For starters, this report was the first of a three-part inquiry. Next up, researchers will look for the relationship between giving circles and host organizations, and look for a link between giving circles and civic participation.
Lee thinks they may be on to something. She speculates that participation in giving circles is tied to the grassroots activism in progressive circles following the 2016 election.
“One of the silver linings is just this proliferation of activists, who are getting together to write postcards and make phone calls and march and plan things and march and show up at [congressional members'] offices,” Lee said. “A lot of those efforts are women. A lot of those same women are part of giving circles and giving clubs.”
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