By: Jack Alotto, MA, CFRE
I recently joined a group of donors who were creating a giving circle in the Coachella Valley of California. Giving circles are one of the fastest growing giving mechanisms in the United States. A giving circle is created when individual donors come together to pool their money to financially support nonprofit organizations. Giving circles are membership collectives, where:
- Members make a specific financial gift (gifts can range from $5 to $100,000 and beyond) usually set by the Giving Circle
- Members nominate a nonprofit for funding
- Members attend an event, where nominees make their case for support
- Members then vote which of the nonprofit nominees receive the collected funds
The uniqueness of giving circles is that they are democratic philanthropy, donors vote where their gift will go.
While working on the giving circle in the Coachella Valley of California, it occurred to me that nonprofit organizations could benefit from the giving circle model by creating a giving circle specifically to support the programs of their organization.
Here’s an example of an organization that works to bring arts education and programming to schools. Let’s call our organization, “Arts in the Schools.”
Arts in the Schools programs include: an Artists in Residence program, a Performances in the schools, Master Classes for student artists, and a program to train teachers on how to incorporate arts in their curriculum. Arts in the Schools could start a giving circle by asking donors to make a $50 contribution, nominate a program from the list of programs provided by the Arts in the Schools, host an award program where each program manager nominated speaks to members of the giving circle about their work impact and benefits to the schools. This is a great cultivation event, especially for donors who may not be aware of all of the programs that Arts in the Schools offers. Once each program has made their case, the giving circle members discuss the nominees and then select a recipient of their collected funds. Secondary awards might be given to programs not selected.
The benefits to Arts in the Schools are many.
- The giving circle for Arts in the Schools is a great way to attract new donors and expand giving from their current donors to other programs.
- Giving circle members nominate their favorite program for funding and can discuss their reasons with other giving circle members. Giving Circles are a great educational and social event for donors.
- Giving circle events are a great way for Arts in the Schools to learn about donor connection to their organization.
- Giving circle members learn about other programs at Arts in the Schools, in a social setting, and that is great cultivation.
- Giving circle members share in democratic philanthropic giving.
- Giving circle members share in the satisfaction of turning their membership fee into a contribution to Arts in the Schools.
- Giving circle members engage in a funding mechanism they vote for the funding recipient. That’s donor centric.
There are many reasons to start a giving circle, I’ve listed just a few. Please share your experience with me around your giving circle.