The Australian Centre for Philanthropy and Nonprofit Studies, qut
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- Key issues, latest research and trends
- Diversity and inclusion
- Establishment and replication of giving circles
- Developing a giving circle over time and growing membership
- A teaching and advocacy role for giving circles
- Issues for the nonprofit beneficiaries and applicants to giving circles
- Giving circles bring friendship and creative messiness to philanthropy
International contextThe academic literature has until 2015 focused almost entirely on the US, yet growing numbers of giving circles have been created in India, Australia, Canada, South Africa, the UK and Ireland. United StatesThere were about 800 giving circles in 2007 in the US (the latest formal survey). A May 2009 study estimated that about 600 giving circles in the US together gave more than US$100 million and engaged more than 12,000 people (Arrillaga-Andreessen 2012). United KingdomThe cultural context for philanthropy in the UK, in which public discussions of wealth and generosity are unusual (Lloyd 2004; Wright 2001), might indicate less interest in giving circles. However, recent research with high-net-worth donors indicates that collaborative giving may be more common among UK philanthropists than previously suspected (Eikenberry and Breeze 2015, 42). The majority of giving circles in the UK and Ireland are part of a centralised network or organisational structure of some kind, in contrast to the situation in the US. AsiaWhile traditions of charitable giving have existed for centuries in Asia the concept of organised philanthropy is relatively new and rapidly developing (John 2014). Factors influencing Asian giving include clan affiliation or religion, family stability and restraint around displays of wealth in jurisdictions with punitive tax regimes. Giving circles may support philanthropic development in Asia by offering people of modest income an additional way of engaging with NPOs and social issues in their community or beyond. This role of the giving circle as a means for learning philanthropy in a collaborative setting may have a particular relevance in Asia; however, the region’s relatively weak philanthropy infrastructure is a factor restraining development. Statistics on philanthropy for the region as a whole are not available, and what data are collected between countries is often irregular and inconsistent. A significant amount of giving in Asia is informal and unrecorded, even for large or regular donations. Asia’s 34 nations and special administrative regions form a diverse and complex patchwork of cultures, languages, political systems and economies spread across vast distances. Giving circles in Asia are either ‘home-grown’ or based on models adapted from the US or Europe in response to ad hoc inquiries from the region. John (2014) identified 23 giving circles in six countries linked to models in the US or Britain, and a further 14 ‘home-grown’ giving circles in four countries. These giving circles appear to have developed their own models without guidance from existing ones. Small, ‘home-grown’ circles may remain informal and invisible, operating largely by word-of-mouth through business or social networks, and this will lead to a significant underestimation of the number of giving circles in Asia. The invisibility of groups in Asia will hinder the movement’s maturation as circles remain poorly networked and unable to learn from one another. However, as giving circles in Asia grow and connect with others inside and outside the region knowledge will increasingly be shared. International giving circle models do not appear to operate ‘like a tight franchise or subject to “headquarters” control’ (John 2014, 91). They have a relaxed approach, with trust and goodwill mostly replacing authorising agreements. Initiatives in Asia such as Social Venture Partners (SVP), Impact100 and The Funding Network have been backed by local leaders and supported to develop their own identity. In Asia, private banks target family-based philanthropy as a key commercial offering and much of this effort includes advising clients on intergenerational transfer of businesses, wealth and associated family philanthropy. `
Australian contextAustralia’s collective giving groups are very young and still evolving. They are flexible in adapting to community needs, as well as enthusiastically open to new ideas. Australian giving groups are often casual and informal, and attendance at events or meetings is rarely compulsory, ensuring that members can engage with grantmaking at their own pace (Gibbs 2014). Membership of a giving circle brings a new level of education in philanthropy and community impact. Most giving groups seek to ‘grow philanthropy in Australia’, which means that they are actively recruiting. Thanks to a cultural reaction against the notion of philanthropy as an elite activity, giving collectives in Australia tend to be enthusiastic about accepting members from all backgrounds and income levels. The 16 known giving circles or collectives in Australia are (drawing from Gibbs 2014):
Impact100 SA Impact100 WA Impact100 Melbourne Impact100 Fremantle YoungImpact100 100 Women (Perth) Women and Change (Brisbane) 10x10 Melbourne and Sydney Melbourne Women’s Fund The Funding Network Kids In Philanthropy (Sydney and Melbourne) The Awesome Foundation First Seeds Fund, Sydney SVP Melbourne Australian Red Cross Tiffany Circle, and YWCA NSW Giving Circle. Giving circles in Australia are largely based on international models that have been adapted for an Australian context. Such imported models include SVP, Impact100, the Awesome Foundation and TFN. Impact100’s model is that 100 people each donate A$1,000 and combine the funds to provide a substantial annual grant to a local nonprofit. The Australian branch of Impact100 saw its first international group formed in Perth, Western Australia, and a second chapter opened in Melbourne. There is no formal agreement between Impact100 chapters in the US and those in Australia; the arrangement is based on goodwill. While Impact100 groups in the US are composed exclusively of women the Australian groups are of mixed gender, although predominantly women. When SVP began in Australia the desire of SVP Melbourne’s founding partners to both give grants and invest in social businesses led them to create a dual structure—a public ancillary fund (PuAF) for grantmaking and a separate partners’ investment fund incorporated as an operating company. The Awesome Foundation model in the US and Canada requires relatively small donations of up to $100 per month by each ‘trustee’. The value of this price point is approximately maintained in Australia and New Zealand. In advance of launching TFN in Australia in 2014, a group of individuals, foundations and businesses held pilot events in three Australian cities in 2013. One priority of TFN Australia is to support the development of the social enterprise sector by providing start-up and early-stage grant funding. First Seeds Fund is linked to Little Black Dress Group, a professional network for business women in Australia. The giving circle was established in 2011 as a sub-fund within the Sydney Community Foundation, which provided tax deductions on donations but did not restrict the circle’s mandate geographically, and placed all decision-making in the hands of its members. First Seeds Fund provides both grants and the mentoring skills of its members, who act as ‘big sister’ role models to girls struggling with formal education or difficult home lives (John 2014). Others from the larger Little Black Dress network donate occasionally or at fundraising events. The organisation Good Mob is a recently established Australian collective giving technology platform designed to expand giving circles by allowing individuals to create or join ‘mobs’ online which give pooled donations to a chosen cause (Good Mob 2016). However, there is no existing research on the types, sizes and donations of Australian giving circles.
Whose needs are more important? Members or beneficiaries?There is tension between what Schervish and Havens (2001b) have labelled ‘supply-side’ and ‘demand-side’ philanthropy (see also Eikenberry 2005b). In ‘supply-side’, members participate in a giving circle in a way that is most beneficial to them as members (and philanthropists) by learning about needs in the community and perhaps funding a particular project that excites them. In ‘demand-side’, giving circle members meet the needs of NPOs and the community by providing funding for general operating costs or for needs that are not necessarily of special interest to the circle’s members (Eikenberry 2008). Giving circles may require a high level of interaction with the funding recipient (which tends to be more the case with formal organisations). For example, a giving circle such as SVP might stipulate that an NPO must show how the organisation can use volunteers. Sometimes NPOs are in a stage where they do not need volunteers, so the organisational leadership must find work for circle members. Negotiating this relationship can be time-consuming (Eikenberry 2008, 147). Thus, there is at times a disconnect between what the NPO really needs and what the giving circle needs to meet its goals as a donor-education and engagement vehicle. While not unique to giving circles, this tension or disconnect between the interests and needs of the donors versus the nonprofit beneficiaries is clearer in giving circles than in large-scale foundations.
As the main recruitment method for many giving circles is through members inviting friends and professional networks to the group or its events, homogenous cultural groupings within circles may result. However, some giving circles have a more organised process for recruitment, such as through websites, promotional videos, leaflets or being invited to join by staff (Eikenberry and Breeze 2015). Establishment and replication of giving circlesThe idea of giving circles appeals to many who read or hear about them and media attention typically has a snowball effect, leading to more circles being established (Rutnik and Bearman 2005). Encouraging everyone to serve on the grantmaking committee is vital to help members connect to the group and its mission. The depth of that connection is a key future indicator of whether members will continue to give (Shaw-Hardy 2009). Networks of circlesSome giving circles are affiliated with nationwide networks of funders and giving circles, many of which aim to foster a culture of collective giving within a particular ethnic or affinity group. These networks provide support through advice, mentorship, training, start-up or matching funds, maintaining directories of existing circles, and hosting conferences and webinars (Dean-Olmsted et al. 2014). As previously mentioned, the lack of philanthropy infrastructure throughout Asia is likely to moderate the growth and development of giving circles. The relative lack of intermediaries such as community foundations, philanthropy support organisations and networks means that giving circles may operate in isolation, unaware of one another’s existence and therefore opportunities to collaborate (John 2014). The establishment of even an informal network of giving circles, sharing good practice, encouraging collaboration, collecting and analysing data, and promoting collective giving would enhance the evolution and impact of giving circles in Asia.
A common concern about giving circles has been that they may divert individual donor’s funds away from causes and organisations they have already supported. Research shows that giving circle members tend to increase their giving as a result of participation, rather than shift their individual giving. Giving circle members give to a larger number of organisations than other individual donors. Giving circles may, however, displace giving that goes to other public fundraising campaigns (Eikenberry and Bearman 2009). Bearman (2007) examines mature giving circles, defined as those more than five years old, exploring the common challenges faced by circles over time, creative strategies for addressing these challenges and the promising practices that have emerged. As this report describes, these ‘mature’ circles have important lessons to share about how to evolve gracefully. One of the ways that giving collectives foster group identity is through the use of professional or volunteer mentors, who can be staff members of supporting organisations, such as community foundations, peer mentors from national giving circle networks or even long-standing members of the giving collective itself (Dean-Olmsted et al. 2014, 10). Experienced facilitators can tutor members on the group’s history and values, nonprofit management, grantmaking and local community needs. They can also provide context or background information about organisations under consideration by the group. A teaching and advocacy role for giving circlesGiving circles help donors to learn about community organisations, issues and solutions and enhance the giving strategies of donors. This teaching role may be just as or more important as a circle’s role in increasing giving. Total giving increases as the level of engagement and length of time in a giving circle increases and as the number of giving circle memberships increases (Eikenberry and Bearman 2009). Giving circle members give more strategically and more broadly, especially to organisations supporting women and girls and ethnic/minority groups—groups often neglected by mainstream organised philanthropy. Giving circles have a considerable impact on increasing members’ knowledge and awareness of philanthropy, NPOs and problems in the community (Eikenberry and Bearman 2009, 51). Mainstream philanthropic institutions, especially community foundations, should provide educational opportunities to share the tools and techniques of philanthropy with community groups practicing collective giving to help them become more strategic. Interviewees and other sources also talked about the application process being much more engaged through the giving circle. Rather than just sending out a request for proposals and waiting for a response, giving circle members often take a much more hands-on approach to seeking out and working with potential fundees (Eikenberry 2006). Educating giving circle members about the grantmaking process and community issues are ongoing projects of most giving circles. In contrast, in many foundations there are program officers already familiar with the grantmaking process and issues; therefore there is no need to treat people doing the grantmaking as ‘learners’ (Eikenberry 2006, 527).
Philanthropic and nonprofit experts may be confident about the potential for giving circles to increase individual members’ giving and by attracting new and younger people to organised philanthropy. However, they may be concerned about the implications of giving circle members giving in a more thoughtful and focused fashion. This could drastically change the fundraising field, with negative impacts on traditional institutional fundraising through direct mail, as well as on workplace and national giving programs (Eikenberry 2006). One example of the complexity involved with a giving circle is the complicated nature of cultivating relationships with its individual members. It may be difficult or even impossible to connect with individual donors in the giving circles, whether by design or by default (Eikenberry 2008). Some giving circles actively discourage funding recipients from following up with or cultivating their members for individual gifts by not sharing the member mailing list or not allowing funding recipients an opportunity to interact with the circle’s members. In other cases, beneficiaries said while they were not explicitly told not to cultivate individual members they had the impression that it would not be acceptable (Eikenberry 2008). Receiving funding from the giving circle was beneficial, but other elements that added value to the relationship were also important, such as new volunteers, additional resources, new contacts, prestige and access to new donors. These were unique elements of giving circles compared to other types of fundraising (Eikenberry 2008). Relationships may not be as transformational as the giving circle and the nonprofit hoped they would be. This disparity can be exacerbated by the attitude of the giving circle members or the lack of knowledge some circle members have about NPOs. Help with needs such as visibility, a voice, appreciation, connections, volunteers, capacity building and a host of valuables apart from money seems to make for a beneficial funding partnership that balances out some of the complexities of the relationship. Ensuring that a giving circle develops a culture of giving that is open and transparent respects both the givers and those seeking funding. Giving circle donors pool their resources, together decide how to allocate funds, discuss their giving and share knowledge (Rutnik and Bearman 2005). These practices have led some to celebrate giving circles as a more democratic form of philanthropy. This claim of democracy rests on giving circles that make their giving decisions through various kinds of collective processes, even voting, rather than privately and individually making decisions (Jonsson 2004). This democracy, however, rarely includes the other major parties to the philanthropic relationship: potential or existing grantees, recipients or beneficiaries (Ostrander 2007). Paths for recipient groups to gain access to giving circles are generally non-existent. Some donor circles invite potential or current recipient groups to report about their activities and use of the gift. Indeed, this kind of learning appears to be a central aspect of giving circles and can provide information about recipients and their needs that would otherwise be lacking. These outside parties, however, do not become part of the decision-making process. Some giving circles ‘source’ the local community for ‘worthwhile endeavours.’ Although some circles do accept unsolicited proposals, others refuse to accept applications initiated by grantees.
Yet, this perceived decline in civic engagement may be less of a decline in overall participation and more of a change in how people participate in community and civic life. Giving circle members describe their attraction to the independent, grassroots nature of the giving circle—a place where individuals are empowered to act or where a group of people can control how things go. The growing trend in collective giving may reflect a new way to connect while giving back, and also signal a change in how people care for each other through philanthropy and participation in strategic community-building activities and projects (Lester and Lindsay 2009). Giving circles thus represent a revival of the concept of community philanthropy and the spirit of collective giving as central to philanthropy. Members/participants seek the opportunity to be around like-minded people, have purposeful discussions about causes or other shared life issues and doing things together. Having fun is an important aspect of this: ‘Belonging to a giving collective helps people build personal, professional, and philanthropic connections based on a shared identity or affinity along the lines of gender, ethnicity, religion, or those with a shared history, such as alumni of schools or programs’ (Dean-Olmsted et al. 2014, 8). Members are often pleasantly surprised by the camaraderie generated by a giving partnership. Supporting shared goals and meaningful projects is a way of bonding with a group of people who are happy and enthusiastic about their work. Half the fun of being part of a philanthropic partnership is being around an energetic, intelligent and engaged group of people. In the process, people often develop what turn out to be deep and lasting friendships: ‘You’re developing a much deeper network of friends because you share this profound common value’ (Fors quoted in Arrillaga-Andreessen 2012, 35).
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