The Australian Centre for Philanthropy and Nonprofit Studies, qut



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Typologies


Collective giving models include associations, mutual aid societies, service clubs or organised giving through faith or religious practices. Groups organise their giving and collectively transfer resources to their communities, often without recognition as organised philanthropy. Because they often develop independently, giving circles take unique forms. Some are adapted from other successful circles and some become part of a network of similarly structured groups. However, many are created from scratch and have evolved their own distinctive ways of working (Bearman 2007). This results in great variety in giving circles’ characteristics, and makes it challenging to develop a robust typology based on their mission, operations, size, level of member engagement and composition (John 2014).

There are several typologies of giving collectives offered in the literature that distinguish by size, level of formal organisation and underlying financial structure. There appear to be significant differences in types of giving circles between the US and the UK, the only two countries where giving circles have to date been researched. Each typology from the literature is discussed below.

Eikenberry (2006, 6) offered the first categorisation of giving circles in the US, finding that three major types make up the giving circle landscape. These are small groups, loose networks and formal organisations.

Small groups comprise a small number of donors who pool funds, usually in equal amounts. All members are typically involved in agenda setting, discussion and decision-making, and leadership is often shared. The two major foci of small group giving circles are social and educational activities.

Loose networks have a core group of donors who do the ongoing organising, planning and grant decision-making, with a larger, loosely-affiliated group of individuals who participate in events. There is usually no minimum contribution to participate and no paid staff support within loose networks. They are completely volunteer-driven and valued for their flexibility and grassroots nature.

Formal organisations are more organised in their structure and decision-making processes than small groups or loose networks. Similar to a traditional membership organisation, with a board or governance group, committees and professional staff support, they are also larger and the cost to participate is higher compared to the other two types. The grant decision-making process typically involves committees either making grant decisions directly, or making recommendations for a vote by all members. The major activities of formal organisations are education and engagement.

A more recent typology is offered by Eikenberry and Breeze (2015), based on a study of 80 giving circles identified in the UK and Ireland. They identify six structures for giving circles: mentored, live crowdfunding groups, hosted, independent, brokers and hybrid. Each is described below.



Mentored groups are networks of giving circles with a small number of members in each group, focused on mentoring young professionals to develop better-educated, empowered and engaged philanthropists. These circles pair younger givers with a more senior philanthropist and/or mentor who provides advice, insight and matched funding. Their combined focus on mentoring, match funding and education seems unique to the UK.

Live crowdfunding (LCF) groups are common in the UK but not in the US. They support charities, nominated by members through a selection process. These charities then propose projects to the audience of donors who make pledges in an auction-like event. The best-known of these groups is TFN, whose mission is to support small charities addressing injustice and poverty. TFN has replicated their model in countries including Australia and the US.

Hosted groups are giving circles run by host organisations, typically charities or community foundations, and tend to be more formal in their structures and funding decision-making processes. The host manages the funds donated and provides staff support to the giving circle. In some cases the host also recommends the particular projects or beneficiaries for support. Due diligence and accountability seem to be emphasised to a greater degree compared with other types of giving circles.

Independent groups members tend to give relatively small amounts and their process of decision-making and due diligence tends to also be informal. These typically involve a small group of people, and some forgo tax benefits to keep the group’s operations as simple as possible. There are relatively few independent giving circles in the UK and Ireland that resemble this common type of giving circle in the US.

Brokered groups have a collaborative giving role that may sit outside the normal giving circle concept. These groups play an online convening role whereby donors collectively commit to supporting causes, with a focus on promoting more effective giving and making giving part of everyday life. An example is Giving What We Can (GWWC), which asks members to pledge to give 10% of their income to endorsed charities working to end poverty around the world. Donors’ funds are not pooled, but rather donations are made directly to nominated charities. This type of giving collective is rarely noted in the US literature.

Hybrid group


Finally, hybrid giving circles were identified which combine several elements of the other groups described above. These may include event-based activities, mentoring and member education.

Bearman (2007) offers a simple typology of four giving circle types: small group, large group, event-based and ‘other’. Bearman (2007) additionally notes that giving circles can also be categorised by the arrangements they have for their finances, rather than by their size or activities. To manage the funds a circle can set up a joint bank account, establish a donor-advised fund at a community foundation or an investment company, or even create a public charity. In line with their individuality, most fell into three categories.



Hosted giving circles: These giving circles have a host organisation that, at minimum, receives the donors’ contributions and makes payments to the recipient organisations. Hosting relationships can be elaborate, complex and mutually beneficial. Of hosted giving circles, the majority kept their money in a donor-advised fund within a local community foundation. Giving circles may also be hosted by other public foundations, such as women’s foundations or Jewish federations, private foundations, NPOs or associations, or universities.

Serving as their own hosts: Some giving circles obtain their own charitable status and serve as their own hosts. Because these circles are incorporated as NPOs, their donors’ contributions are tax-deductible, and the giving circle can pay grant recipients directly. Giving circles with nonprofit status tend to be large, often have staff of their own to manage their finances and operations, and tend to have higher levels of giving.

Un-hosted giving circles: Some groups have no host organisation and no charitable or nonprofit status. Most (although not all) of these circles are very small. Some pool funds in a bank account and do not get tax deductions for their contributions. Others have individuals donate directly to the NPOs they decided to fund, and each donor receives a separate receipt from the organisation they donate to.

Bearman (2007) also notes that some universities have adapted the giving circle model for use with their donors and alumni. These university giving circles make grants to projects within the university; however, donors still select the projects they wish to support.

Arrillaga-Andreessen (2012) situates giving circles on a spectrum, noting the challenges in categorising a diverse population of groups. However, she identifies broad groupings on the spectrum: grassroots giving circles, sponsored giving circles and institutional giving circles.

At one end of the spectrum are grassroots giving circles, which are informal, self-directed circles in which small groups of people (who often already know one another) come together for the purpose of giving.

At the other end of the spectrum are institutional giving circles, independent NPOs. These circles have professional staff, formalised membership and grantmaking processes, and a large group of donors (whose contributions fund both the circle’s grantmaking and its infrastructure).

In the middle of the spectrum are sponsored (or hosted) giving circles, formalised groups housed within an existing philanthropic institution, such as a community foundation. These giving circles use the infrastructure and expertise of an existing philanthropic organisation, but remain donor-led.

This concept of a spectrum of giving collective types is echoed by Rutnik and Bearman (2005). At one end of the spectrum are informal, group-based giving opportunities, often organised around an event, such as a dinner which provides an opportunity for networking and social activity. This informal, but nevertheless organised form of philanthropy, is called shared giving. At the other end of the spectrum are highly organised, formal giving circle structures and independent organisations, which are called giving circles. Often hosted or sponsored by a charitable organisation, such as a community foundation, giving circles may focus on a particular issue, field of interest or geographic region.

Rutnik and Bearman (2005) then offer a further breakdown of this group of giving circles into three categories, while recognising that circles come in many types and sizes and have varying degrees of structure and complexity.



Informal circles which may have their donors donate directly to the beneficiary. They usually operate on a smaller scale and do not have a host.

Hosted circles offer donors the tax advantages of giving to an NPO, without the complex and time-consuming process of creating a new charitable NPO. A host, such as a community foundation, can be helpful during the start-up phase when founders are focusing on recruiting and initial grantmaking.

Independent charitable NPOs are giving circles that become their own nonprofit entity, rather than forging a relationship with a host.


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