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.”