News & Insights

Today’s donors increasingly want to play an active role in deciding where their charitable dollars go. That’s one reason giving circles — groups of individuals who pool their contributions and collectively choose organizations to support — continue to gain momentum. If your nonprofit isn’t building relationships with these groups, you could be overlooking a valuable source of funding.

Collaborative philanthropy

Giving circles are sometimes confused with crowdsourcing, where the number of donors can run into the thousands. Giving circles, on the other hand, usually represent smaller groups of friends, neighbors, family members or co-workers. In some cases, they’re composed of people with no other connections outside the group.

Regardless of who’s involved, a defining characteristic of giving circles is that they conduct research on potential causes and grantees, then make a collective decision about what and whom to support. Another common characteristic is that funds are typically distributed relatively quickly. This contrasts with donor-advised funds, where funds sometimes remain undistributed for long periods.

Some giving circles are also supported by community foundations. The foundations offer services to donors who want to establish charitable funds without bearing the administrative and legal costs typically associated with launching an independent foundation.

Growing source of support

Giving circles have continued to grow significantly in recent years. According to the most recent national research from Philanthropy Together and the Dorothy A. Johnson Center for Philanthropy, nearly 4,000 collective giving groups in the United States mobilized more than $3.1 billion in charitable giving between 2017 and 2023, illustrating the movement’s funding power.

Membership in giving circles tends to produce donors who give greater amounts and to a wider variety of organizations. The breadth of giving means more nonprofits receive support. That includes organizations that usually don’t receive much, if any, government or foundation support.

Members often take an active role in the charities they financially support. This can be invaluable for smaller organizations with limited resources.

Giving circle funding can be particularly helpful if your nonprofit is trying to jumpstart new projects or programs. Getting in at the beginning and seeing immediate results can create a positive experience for donors and encourage further engagement. These givers have the potential to become some of your most loyal supporters and passionate ambassadors.

Finding the right connections

Connecting with giving circles is easier than ever. Multiple online directories help nonprofits and donors identify groups based on location, causes and areas of interest. Investing time in these relationships can help diversify your funding sources while introducing your mission to engaged philanthropists who often contribute far more than financial support. Contact us to discuss giving circles and other strategies to help increase your funding.

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