A Complete Guide To Giving Circles

When people come together, they can make big changes. That’s the power of community. Across the world, individuals are finding new ways to support causes they believe in, not just by themselves but as a group. It brings more resources, ideas, and energy to help those in need.

In this blog, we're going to explore Giving Circles, a powerful way to give back as a community. We’ll discuss what these groups are and how they are shaping the future of charitable giving.

What Is a Giving Circle?

A giving circle is a group of people who come together to donate money. 

Each person in the group puts in some cash. Together, they decide where to give that money to help others or support good causes. It's like a club where everyone works together to help out and make a big difference with their donations. Women and younger donors are especially drawn to these groups.

Giving circles can be very different from one another. Some are casual, with members giving whatever they can afford. Others have rules about how much you need to give and how the money is handed out. 

How Do Giving Circles Work?

First, people meet up to start the circle. They can be friends, family, or even random people who just want to help the same cause. Each person agrees to give a set amount of money. They might give every month, every few months, or once a year.

Next, the group talks about and picks which charities or projects they want to support. The idea is to vote and choose together. This way, everyone has a say in where the money goes. 

Finally, they send the money to the chosen cause.

History Of Giving Circles

The idea of giving circles has been around for a long time and is popular all over the world. People in many cultures have been pooling money to help others for centuries. 

For example, in West Africa, they have something called "susu," and in Mexico, they call it "tanda." These are traditional ways of collecting and using money among a group of people.

In the United States, the modern version of giving circles started around the 1990s. 

One of the first and most famous giving circles was the Washington Women's Foundation, created by Colleen Willoughby in 1995. This group showed how powerful it can be when people come together to give. They pooled their money and gave large grants to help different causes.

Since then, the number of giving circles in the U.S. has grown a lot. There were about 200 giving circles in the early 2000s, and by 2020, there were over 2,000. 

The increase in giving circles is part of a bigger change towards more community-focused and democratic ways of giving. It lets people of all backgrounds see the real impact of their donations and feel connected to the causes they support.

How to Start a Giving Circle?

Starting a giving circle can be a rewarding way to bring people together and support your favorite causes. Here’s a simple guide on how to get your own giving circle up and running.

Step 1: Set Clear Goals

First, decide what you want your giving circle to achieve. 

Are you focusing on local issues, specific types of charities, or maybe broader causes? Knowing what you care about will help guide all your other decisions.

Step 2: Find Like-minded People

You’ll need others who are interested in joining your cause. 

Reach out to friends, family, and colleagues who share your interests. You can also use social media or community events to find people who might want to join.

Step 3: Agree on Rules and Amounts

Once you have a group, it’s important to agree on how the circle will work. 

How much will each person contribute? How often will you meet? Will you vote on where the money goes? Make sure everyone is clear on the details.

Step 4: Open a Group Bank Account

You’ll need a place to keep your pooled funds. A joint bank account can work well. 

Make sure it’s one that all members can access and check on when needed.

Step 5: Decide How to Choose Charities

Your group should have a fair and open way to pick which charities to support. Some groups vote while others might take turns choosing or using a committee to suggest options.

Step 6: Schedule Regular Meetings

Decide how often you want to meet to discuss your progress and make decisions. This could be monthly, quarterly, or whatever works for your group.

Step 7: Keep Track of Contributions and Impact

Keep good records of how much money is collected and where it goes. It’s also nice to share updates on how the money is helping so members see the impact of their contributions.

Remember, starting a giving circle is all about teamwork and shared passion for making a difference. 

Benefits of Joining a Giving Circle

• Your donation goes further when combined with others. Together, you can support bigger projects and make a larger impact than you could alone.
• Have a say in where your money goes. You and your group decide together which charities to support.
• Giving circles often have low overhead. More of your money goes directly to the cause, not to administrative costs.
• Understand the challenges and issues in your community better. Become more informed about social problems and solutions.
• Feel good knowing you are making a difference. Helping others gives a sense of satisfaction and joy.
• Participate in ways that fit your schedule. You can be as involved as you like, from simply donating to leading the group.
• Meet people from different backgrounds. Learn from their experiences and share your own.
• Your involvement may encourage friends and family to also support charitable causes. Giving circles can create a ripple effect of generosity.

Common Challenges Faced by Giving Circles

1. Sometimes, members have different ideas about which causes to support. 

Solution: Use voting or a points system where each member assigns points to their preferred charities. The ones with the most points get funded.

2. Members might be concerned about the time involved. 

Solution: Clearly outline expectations and roles from the start. Offer different levels of involvement so members can choose what works best for them.

3. Conflicts or lack of participation can occur. 

Solution: Establish clear rules and roles within the group. Regular meetings and open communication can also help manage dynamics.

4. Deciding how much money to give and tracking these donations can be complex. 

Solution: Appoint or hire a treasurer to manage finances and use software to keep track of contributions and grants.

5. Keeping members engaged over time can be challenging. 

Solution: Regularly introduce new charities and educational opportunities. Also, plan social events to strengthen connections within the group.

Legal and Financial Considerations to Keep in Mind

1. Understand whether your giving circle needs to be a formal legal entity, like a nonprofit. 

Consideration: Consult with a legal expert to determine the best structure for your group’s needs and to ensure compliance with tax laws.

2. Members need to know if their contributions are tax-deductible. 

Consideration: If tax deductions are important, your circle might partner with a fiscal sponsor or establish itself as a 501(c)(3) nonprofit.

3. Managing and holding money can lead to complications. 

Consideration: Set up a dedicated bank account for the giving circle. Consider using financial management tools or services that are designed for small nonprofits or groups.

4. Trust is crucial in a giving circle. 

Consideration: Regular financial reports and open financial practices will help build and maintain trust among members.

5. Leadership changes can disrupt a giving circle. 

Consideration: Develop a succession plan for key roles. Train new leaders to ensure smooth transitions.

Resources and Tools For Giving Circles

BetterWorld: BetterWorld's donation software is a great tool for giving circles. It’s free and easy to use, helping you collect more donations with less work. 

Your members can choose to give money once or set up monthly or yearly donations. There’s no cost to use BetterWorld's tools, so all the money you raise goes right back into your circle.

Grapevine: This platform makes it easy to start, manage, and grow your giving circle. It provides tools for handling donations and communicating with members.

Philanthropy Together: They offer a wide range of resources, including Launchpad, a training program for those looking to start giving circles. New leaders can learn effective strategies for collective giving.

The Giving Project: This initiative helps increase and diversify the donor base by training leaders across various communities to start their own giving circles​.

Johnson Center for Philanthropy: Provides extensive research and insights into collective giving. They offer resources to understand the impact and management of giving circles, which can be crucial for new and existing groups​.

Community Investment Network: Focuses on empowering communities of color to engage in philanthropy. They provide educational resources and support for starting and managing giving circles​.

These tools and resources can greatly assist in starting, managing, and expanding giving circles.

Start Your Own Giving Circle Today

Starting a giving circle is a wonderful way to make a big impact in your community. It's really quite simple to begin with, and it doesn’t require a lot of money or expertise. 

All you need is a passion for a cause and a willingness to collaborate with others who share your interests.

The best part about giving circles is how they bring people together. Not only do you get to help those in need, but you also strengthen your community by connecting with others who care. It’s about pooling your resources and energy for the greater good.

So why wait? Start a giving circle in your neighborhood today. It's an easy and effective way to support the causes you care about and make a lasting impact. Let’s make a difference, one community at a time!