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May 15, 2009

Donors in 'Giving Circles' Donate More Than Other People, Study Finds

Donors who participate in giving circles — in which individuals pool their money and decide collectively how to distribute it — give more than other donors, give more strategically, and give to a greater number of organizations, according to results of a study released this week.

The study examined 587 people to learn about their philanthropic attitudes and behavior. It found that donors who participated in giving circles tended to be highly engaged in their communities, and that 70 percent felt that their participation had increased their awareness of nonprofit groups and community needs.

The study was conducted by the University of Nebraska at Omaha, the Forum of Regional Associations of Grantmakers, and the Center on Philanthropy at Indiana University.

Giving circles have grown in popularity over the past decade – their numbers have doubled since 2004, according to the Forum of Regional Associations of Grantmakers, which has identified well over 500 such groups in the United States— and may become even more appealing in a down economy because they allow donors to pool their gifts with others’ and make a greater difference, say researchers.

Participation in a giving circle influences members to give more than other donors, researchers concluded, and members that are in multiple giving circles, are in the circle longer, or are involved in the circle’s grant-making decision process give even larger sums.

Giving-circle members were less likely than other donors to give to religious organizations or combined giving funds such as the United Way, the study showed, and instead were more likely to give to organizations that serve women and girls, ethnic and minority groups, or to groups that promote arts, culture or ethnic awareness.

The survey’s findings also suggest that the size of a giving circle can affect the behavior and attitudes of its members.

Larger giving circles tend to make more strategic gifts, often researching which organizations to support, examining nonprofits’ performance data, making multi-year gifts, and making grants for operating expenses.

But, the study showed, members of larger giving circles also volunteer less and are less likely to believe that giving and volunteering will have a positive impact on their community than members of smaller circles.

“We knew that people join giving circles to make a difference in their communities,” said Jessica Bearman, an independent consultant and a co-author of the study, in a written statement. “Now we know that giving circles really have an impact on members’ giving, knowledge, and civic participation.”

— Paula Wasley

Friday May 15, 2009 | Permalink

Comments

1. Thanks for writing this post on Giving Circles. I’m so glad to see this study and the articles around it. giving Circles are such a great way to make the most of tighter donation budgets and allow people to take an active role in their giving. Individuals are not only able to be more strategic about their investment, but they also get to be a part of a larger community with shared goals/interests, learn more about and educate others in the circle, get in touch with the nonprofits they’re thinking of giving to, and make a greater impact by pooling funds. The following article has more information on how this is possible and includes information to a study on Asian American Giving Circles: http://www.casefoundation.org/blog/how-make-most-your-tighter-donations-budget-giving-circles.

   Cheers,
   Sokunthea Chhabra

   — Sokunthea Chhabra    May 15, 01:43 PM    #

2. I am interested in the success of Giving Circles in Higher Ed fundraising. I am familiar with successful giving circles that have community focus but would be interested some examples of higher ed initiatives that have used the Giving Circle model.

   Thanks,
   Nancy Berst

   — Nancy Berst    May 15, 03:29 PM    #

3. Several years ago I decided to give exclusively through my Church, because I liked the roster of charities we supported. Since I moved away from that Church, I have to choose my own charities, and as a result I give less overall.

   — SM    May 18, 12:45 AM    #

4. Thank you for this article. I just finished participating in a leadership development project in our community in which we designed a giving circle for our community foundation. We are going to be implementing it this fall. It’s so gratifying to read that the research backs our efforts!

   — Amy Jackson    May 29, 09:51 AM    #

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