Chapter 7: Giving collectives Alexandra Williamson

Definitions, demographics and characteristics

Definitions and characteristics

Today’s giving circles therefore follow an age-old formula with origins in worldwide traditions of mutual aid and collective social action. In 1835 de Tocqueville admired the vitality of citizen engagement as the base of American democracy. He noted that democracy worked most efficiently when the forces that drove it came up through society, rather than flowing down from government or elites (Lester and Lindsay 2009, 8). This echoes the concept of giving collectives as a form of philanthropy growing or emerging from a community, rather than from the wealthiest in society as do most philanthropic foundations. One of the key aspects of giving circles within the current philanthropic environment is their independent spirit and collaborative operations. In the United States (US), giving circles seem to share an ethos of ‘anti-big, anti-bureaucratic and anti-impersonality’ (Eikenberry and Breeze 2015, 43), emphasising community, local neighbourhood, values and self-reliance (Eikenberry 2010).

Giving collectives, frequently also called giving circles, are groups of people who pool their donations and jointly decide how to allocate them. Sometimes described as a cross between a book club and an investment group (Eikenberry 2007, 859), giving circles sit somewhere between individual or household giving and established foundation grantmaking.

The concept of sharing resources, brainpower and connections for greater impact seems simple. This focus on increased impact or benefit has analogies in the financial investment world: ‘It’s the same reason anyone invests in a mutual fund’ (Shoemaker, quoted in Arrillaga-Andreessen 2012, 33). By pooling money donors can have a bigger impact on a nonprofit.

There are potential issues, however, with definitions that exclude activities, structures or groups. Designating certain structures or groups as philanthropic and others not may lead to excluding, impeding access and creating structural barriers to giving.

Within these basic parameters, giving circles and shared giving take a myriad of forms, and no giving circle is a faithful replica of another. The prospect of developing a group to meet the needs of a community and the particular interests and capabilities of donors is one of the most attractive features of a giving circle (Bearman 2007, 1). Giving circles promote philanthropy in their inclusiveness and flexibility, creating a giving framework that is unpressured and sociable so that new donors will want to join.

It is worth noting that giving circles, although rooted in other forms of mutual giving throughout time and across the globe, are relatively new phenomena in contemporary philanthropy, with the majority formed in 2000 or later.

There are many forms of collective philanthropy that might satisfy a broad definition of a giving circle. The following criteria from Rutnik and Bearman (2005, 5) are adopted for the Giving Australia 2016 study:

• 
  donors pool their resources in some manner
  
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  the donors collectively decide how and where the funds are distributed, and
  
• 
  there is an educational and/or community-building component to the collective.
  

What giving circles do

Giving circles include social, educational and engagement activities that connect participants to each other and their community, perhaps to a greater extent than other forms or structures of philanthropy. Giving circles vary in structure, size, membership profile and areas of interest; however, six activities are identified (Eikenberry 2006) that are common to most giving circles:

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  they pool donated funds often, but not always, in equal amounts from each member
  
• 
  they give away or grant resources, including money, in-kind gifts, and in some cases members’ time and talents; mostly to small, local nonprofit organisations (NPOs) or individuals. Decisions are made through a joint or coordinated decision-making process, and funding tends to go to fewer organisations for (relatively) larger amounts
  
• 
  they educate their members about philanthropy and issues in the community both informally, through the running of the giving circle, researching potential beneficiaries, the grantmaking process and going on site visits, and formally through educational sessions such as workshops, seminars and presentations by guest speakers
  
• 
  they provide a social element. For some giving circles this is an important focus, whereas for others it is incidental to giving and volunteering
  
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  they engage members in volunteering. Nearly all giving circles are run by volunteers, though some have staff or receive administrative support from hosts. Some giving circles also encourage direct volunteer engagement with nonprofit beneficiaries, often at a professional or administrative level, and
  
• 
  they maintain their independence. Giving circles are rarely linked to any one charity and it is the members who decide how funds should be distributed.
  

The social activities of giving circles include the personal, professional and philanthropic roles that giving collectives play in the lives of their participants. Giving collectives provide individual donors with a group of like-minded people who offer support and shared experience in philanthropy. Circles capitalise on the community-building appeal by providing opportunities for members to socialise, network and learn together. Food and drink figure prominently: grants lunches, cocktail parties and dinners.

Giving circles share the philosophy that by working together donors can do more with less and find new ways to give more strategically and accountably, and with measurable impact. Giving circles expose members to best practices and learning through doing. Giving circles seem to offer a more engaged, personal experience and enable individuals with fewer financial resources to actively participate in organised philanthropy at a more significant level. They help individual givers to become proactive rather than reactive, and to practice structured rather than informal giving.

Event-based giving collectives offer an alternate model. Collectives such as The Funding Network (TFN) stage events at which would be donors hear presentations or ‘pitches’ from charitable organisations seeking funding. Typically, organisations have a small turnover and support causes which fall outside of mainstream funding. Events are typically hosted by supporters to ensure costs are kept low.

Demographics

Changing population demographics in Western countries provide the context in which giving collectives are being established. Broadly, countries such as the US, the United Kingdom (UK) and Australia are experiencing an ever-growing population, with more people from diverse racial and ethnic communities, more people practicing a faith other than Christianity and also more women controlling or responsible for how wealth is created and expended.

The giving circle movement grew in part at the end of the twentieth century because women had increased financial capacity due to greater income, education and inheritance from families and marriages. Women have greater control of their finances, their wealth and consequently of their philanthropy.

Giving circles are especially strong among affinity groups linked by religion, ethnicity, gender, sexual orientation or age. Members are exposed to new issues and organisations through their participation in a giving circle; however, funding largely goes to populations that are similar to the giving circle membership. Perhaps for this reason, the lack of diversity within some giving groups is noted in the literature.

Demographic variables from the literature on giving collectives are considered individually below.

Age

There are mixed and inconsistent findings from the literature on the age of giving circle members. While one study found that members were older than average donors, and the likelihood of joining a giving circle appears to increase as age increases (Eikenberry and Bearman 2009, 17), another study found that giving circles generally attract younger (under 40 years) participants, thereby bringing ‘new money’ to the (organised) philanthropic table (Eikenberry 2006, 523). Eikenberry’s research noted a trend for giving circle members to be younger than the typical major donor and have children at home (Eikenberry 2006, 524).

Gender

Findings about the gender of giving circle members also varied by country. One study found that participation among men is increasing rapidly. Giving circles that were mixed gender or all-male made up almost half of the total of circles in the UK and Ireland, with only a fifth (19%) made up of only female members (Eikenberry and Breeze 2015). This is quite different from the US, where over half of giving circles are women-only groups (Eikenberry and Breeze 2015, 53).

Faith

Again, there are contradictory findings from different countries. One study in the US found that, on average, giving circle members attended religious services less frequently than other donors (Eikenberry and Bearman 2009, 18). However, Dean-Olmsted, Bunin Benor and Gerstein (2014, 5) found that most giving circle participants belong to a religious congregation and attend religious services at least once a month, and they are about twice as likely as non-participants to belong to a religious organisation.

Ethnicity

In the US several studies note that most of the giving circles for which data are available have overwhelmingly white members, predominately from professional and upper-middle-class backgrounds (Eikenberry 2006, 523). More recent research suggests that this profile is changing, with Lester and Lindsay (2009) advocating for greater recognition of existing traditions of collective philanthropy in diverse communities of colour and interest. For instance, ‘women, people of color, young professionals, and youth’ (Thiele et al. 2011, 31). Note that ‘people of color’ is used extensively in the US literature.

Income and wealth

Eikenberry and Bearman (2009) noted that giving circle members gave almost twice the amount than other individual donors. However, the same study noted that the average annual family income of giving circle members was also higher.

The newly affluent are a diverse group, and philanthropic and financial institutions may be challenged to identify, understand, connect with and engage this population in charitable giving (Rutnik and Bearman 2005). In addition to those who had inherited money, many high-net-wealth donors were newly rich, following the technology boom of the late 1990s. Many of them began exploring creative opportunities for putting their newfound wealth and business sense to philanthropic use. Cultural shifts driven partly by these self-made individuals and entrepreneurial vehicles emerged to support the higher level of accountability required (Arrillaga-Andreessen 2012).

Participation rates

Approximately one in eight American donors reports having participated in a giving circle (Dean-Olmsted et al. 2014). American donors who have participated in a giving circle share a number of characteristics. The closest similarities centre on age (giving circle participants skew younger) and parenthood (51% of giving circle participants have children, as do 45% of non-participants). These patterns are apparent among African American, Asian/Pacific Islander, Jewish, Hispanic/Latino and non-Jewish white giving circle participants (Dean-Olmsted et al. 2014).

Other

There is no significant difference reported in one US study (Eikenberry and Bearman 2009, 18) between giving circle members and the control group of donors for educational level, number of years living in current community, marital status and number of children.

The numbers of circles and the dollar value of their giving are discussed in the international and Australian context sections that follow.

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