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Amazing things can happen when charitably-minded people come together for a shared purpose. As the familiar saying goes, there’s strength in numbers. Herein lies the concept of collective giving (or giving circles), a rapidly expanding movement in philanthropy in which individuals pool their resources to make significant philanthropic impact.

New research by Philanthropy Together shows that the number of giving circles tripled between 2016 and 2023 – and that’s after it had already tripled between 2007 and 2016. Today, the report says, the U.S. is home to roughly 4,000 giving circles with 370,000 members total; they collectively gave away $3.1 billion over seven years ending in 2023. The report also says giving circles are likely to double again in the next five years.

Why So Popular?
Given today’s societal emphasis on diversity, equity and inclusion, donors are drawn to the collaborative and democratic nature of collective giving. All members of a giving circle engage in deciding what causes to support. They work together to create community connections and assess critical needs, all the with the aim of achieving maximum charitable impact.

Whereas traditional philanthropy is more “top down” in structure, with the more substantial charitable contributions coming from private foundations and wealthy donors, collective giving shifts the philanthropy landscape to one in which donors of all income levels can make equally significant donations by combining their resources. In fact, the average donation per giving circle member is $1,000. While this amount can certainly make some impact on its own, consider what 10, 20 or 50 times more can do. As Philanthropy Together states, “collective giving is democratizing and diversifying philanthropy.

Take, for example, Impact Fairfield, a giving circle we connected with. Based on the Impact 100 model of collective giving, the circle’s goal when it started in 2015 was to gather at least 100 women in the area to pool their contributions to make significant philanthropic investments in local nonprofits. Each woman would donate $1,000, allowing the group to pool its contributions and make $100,000 grants to select local nonprofits each year.

Today, Impact Fairfield has grown to about 260 members, enabling it to make two $100,000 awards each year, plus a donation for general operating expenses to each of the finalists who had applied for the funding. And many of the members do far more than give. About half also vet the funding proposals, review audited tax returns and conduct site visits to learn about the applicant organizations. Members who want to be involved can increase their awareness of civic issues, volunteer and even serve on the circle’s board.

Collective Giving Close Up
Here’s a closer look at collective giving and its growing appeal. The following are key findings of the Philanthropy Together research that confirm the benefits of collective giving:

  • It increases political advocacy and civic engagement. 59% of the giving circles studied said that participating in collective giving prompted them to advocate more for issues they deem important. It also increased their sense of civic responsibility and activism.
  • It improves members’ sense of agency and belonging. 77% said collective giving made them more confident that their opinions on social issues mattered, while 91% said it increased their sense of belonging to a community. This is particularly beneficial given the increased loneliness and isolation that Americans have felt since the COVID-19 pandemic. Being part of a giving circle can help people feel more connected to their community and provide an encouraging platform for addressing issues that matter to them.
  • It helps donors learn. Collective giving groups heighten members’ understanding of diversity, equity and inclusion. 77% said they learned more about these issues from their giving circle participation.

Additionally, collective giving circles are:

  • Predominantly led by women. 84% of the giving circles studied said more than half of their members identify as women and 60% of the groups were entirely comprised of women. (This isn’t surprising, considering the industry-wide trends that show women are drawn to philanthropy.)
  • Locally focused. The organizations supported are primarily small community-based nonprofits.
  • Trust-based. Collective giving typically models trust-based philanthropy in which donations are broadly unrestricted, meaning funders build relationships with their grantees to understand their needs and rely on their expertise to use the funding most impactfully.
  • Impact-driven. Giving circles want to effect long-lasting, positive change in their communities. Rather than fulfilling a specific one-time need, such as providing X number of meals to a soup kitchen, they look beyond the meals to address the larger problem of hunger. They aim to strengthen the organizations within their communities that will ensure long-term impact.

With the rise of collective giving, it’s encouraging to see the philanthropy landscape become more inclusive, whereby a greater and more diverse range of people consider themselves “philanthropists.” Philanthropy Today says 87% of its research respondents view themselves as such – yet, interestingly, many of them said they didn’t self-identify in this manner until joining a giving circle, despite having given previously. Kudos, therefore, to collective giving for empowering donors to do more with their giving. The philanthropic sector – and the world – will change for the better.

Have a Question?
Schedule a call with us or reach us at 800-839-0054. Together, let’s #begiving.

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