“Your donation, however small, matters!” You've probably heard something like that from political fundraisers, sad animal commercials, friends on Facebook. So you click on those "Donate $5" buttons, submit your credit card to GoFundMe campaigns, then just sit back, hoping others are doing the same. But there are some people — even young non billionaires — who are getting the satisfaction of seeing their money make a real difference in their communities and in the world through another model of philanthropy: a giving circle.
Giving circles are groups of people who pledge to give a set annual donation, often around $1,000, and then work together to choose the recipients of their pooled money. Grants of, say, $10,000 can do a lot for a small nonprofit's budget. It's a very old-fashioned concept based on the way smaller communities used to help each other, but it's gaining ground now, as more people seek ways to connect to each other and make changes in the face of overwhelming odds.
"Some people, when they hear the word 'philanthropists,' they think 'rich, white old man,' " Masha Chernyak, vice president of programs and policy at the Latino Community Foundation, tells Refinery29. "That's not the case. It's not just the Zuckerbergs."
Who Is Giving?
"I grew up watching my immigrant parents donate their time and their money to support our church, our community, and other family members who were having difficult times," says Janeth Medina, a DACA recipient who now works in banking and is a member of the San Francisco Latina Giving Circle. "I once supported a friend who was struggling to make her monthly installment for school. It was instilled in me to always help others."
This kind of informal giving has often been overlooked when academics and nonprofit professionals study charitable giving. In its latest Women Give report, the Women's Philanthropy Institute found that in the U.S., 34% of African American and 33% of Latino households give to charities, compared to 59% of Asian American and 58% of white households. But when income and wealth are taken into account, those differences all but disappear.
Giving circles (of which 70% of members are women, often in women-only groups) harness that generous instinct of people who may not have realized that they can afford to donate and have an impact.
"There is this sort of interest and sense of urgency that people have about making their communities and neighborhoods better, but they just don't know what do," says Nicole Robinson, a chair of the Queen Makers, a giving circle on the South Side of Chicago that's part of the Chicago Foundation for Women (CFW). Though Robinson's day job is in the nonprofit sector, she and the other founders of the group recruited lawyers, artists, teachers, and women from other walks of life who live in the South Side and want to invest in smaller organizations that will help women and girls in the neighborhood. They raised $33,000 last year and expect to reach over $50,000 next year.
To make sure they involve the next generation, the Queen Makers allow younger members to donate only $500 and commit to raising the remaining $500. The giving circles that form the Latino Community Foundation in California require $1,000 donations, but Chernyak says that some members raise that money over time from friends on Facebook, through garage sales, or other means.
Medina doesn't think her friends in their twenties should balk at the amount, even with other bills to pay. "I break it down for them: $1,000 a year is $83 a month, or less than $3 a day," she tells Refinery29. "I mention how sometimes we spend more than that on happy hour each month and ask them to think about putting their money where their heart is."
Getting Their Money's Worth
Millennials do love giving away their money. A study found that they give at a rate of 84% (as opposed to just 59% of Gen Xers and 72% of Baby Boomers). But the momentary zing of self-satisfaction you receive from donating online to a huge relief fund is nothing compared to how the women in giving circles describe their experiences.
"We poured wine, we brought food, we created a space where it was almost like a healing circle — women were laughing, sharing," Chernyak says of the first circle she helped organize for LCF in 2012. "We got down to business at the end of the meeting, but the majority of the night was spent getting to know each other and rooting ourselves in love and culture, in what we've all wanted and how that united all of us. What happened very quickly was women went home and said, 'Oh my god, that was such a powerful experience.' "
The kind of networking that takes place at circle meetings is also pretty powerful.
"I met some of my dearest friends, mentors, and sponsors through this giving circle network," Medina says. "Since I joined, I have been empowered to join three nonprofit boards and made two lateral moves within my current employer. This all happens through the power of connection, love, and guidance."
Robinson has witnessed people meeting for the first time in her circle, even though they live just a couple of blocks away from each other.
"A sense of community is being created that is sometimes difficult to make when we're in our routines of commuting to work and following our same paths every day," she says.
How the Recipients Benefit
If you look at it on paper, a nonprofit should get just as much out of 500 individual donations of $50 as it would from a grant of $25,000 from one giving circle, but this is not just about the money. Giving circles are usually organized around specific missions, and so their members are particularly passionate about where their money goes.
Typically, organizations send in proposals to the grant circles, and then a select few will be asked to pitch their proposals in-person during meetings. Chernyak says this can be a moving experience, as the applicants speak to a group of supportive Latinas.
"It feels like a group of tias (aunts), like a group of comadres, a group of my mothers and my grandmothers saying, 'I believe in you, and we have your back,' " she explains.
After hearing pitches, circle members then discuss amongst themselves who will receive their money for the year, and how much will go to each grantee. That money sometimes comes with bonuses in the form of extra help from members of the circle. Sometimes the donors get so involved, they go on to become board members of the organizations, as Medina has done.
Both the Latino Community Foundation and Chicago Foundation for Women are larger organizations that provide an infrastructure for many giving circles. There are 20 groups in LCF's Giving Circle Network, and three in CFW's (in addition to three giving councils). There are larger organizations, like the National Giving Circle Network, Amplifier (for Jewish groups), and Catalist (for women's groups). Sometimes the foundations help find appropriate nonprofits to suggest for their circles' grantees. Other times, small nonprofits get the advantage of exposure to other circles in the network, as well as other resources they can use to grow.
Even though the circle members love to be involved, Chernyak emphasizes that the donors don’t dictate how grant recipients should do their work. Rather, they award their grants to people who are already leaders in their community, and the money is meant to support their efforts as the nonprofits see fit.
In Chicago, Robinson explains a similar philosophy that prompted her circle to call themselves the Queen Makers.
"We talked about investing in Black women leaders who are leading these programs that specifically target Black women and girls," she explains of their first meeting. "But we're also supporting 'queens' in business because the circle has been operating for the past year and a half, and we gathered in spaces that were owned by Black women, or use the services of a business that was owned by a Black woman that lives on the South Side."
Beyond the Circle
Philadelphia's Spruce Foundation began in 2007 as giving circle of 14 friends who wanted to invest in youth-focused nonprofits in their community. Today, it's evolved into a different model of grassroots philanthropy for young people.
"That initial group of members really felt called to having a larger impact, and that came with figuring out a way in which the organization could attract people who were not part of their friend group to join, to donate time, service, funds, or to help generate funding," Spruce Foundation president Jeannette Bruno tells Refinery29. Now, it's a fully formed 501c3 organization, but it maintains its commitment to youth and to fostering philanthropy in the next generation.
Bruno's introduction to Spruce was a happy hour she attended when she was new in town and looking to meet people and connect to the community, which is a common theme with members.
"I think the social aspect can be a driver, particularly when you think about a city like Philly, where there are a lot of people who are from here and also a lot of people who come here for school or for a job," she says, but adds that they're also looking for something deeper than that. "It's this idea that we're all stewards of the community that we belong to. People want to come together around that."
Instead of restricting membership to those who can give $1,000, Spruce raises funds in other ways. But it encourages people to join committees and its 26-member board to volunteer their time and decide on grantees collectively. People can serve on the board for only four years before they have to rotate out, meaning there are fresh perspectives and new people learning the ropes of running a foundation all the time.
"We're challenging the idea of traditional philanthropy, so we have messaging that there's no giving requirement," she says. "We just try to be cognizant of where people are in their lives, what their capacities are, and recognize that not everyone's at the table because they're a big moneymaker. People are at the table because they're an innovative thinker, because they have a diversity of perspective, or because they come from a sector that's growing in our city, and we want their thoughts and their opinions."
How Can You Get Involved?
If you live near one of the circles we've mentioned, you can reach out to them on their websites. You can also look at the larger foundation networks to find circles in your area. Then again, you might want to start your own.
Robinson suggests doing this with the help of a network or a community foundation that uses donor-advised funds. An organization like that can help with administrative details — particularly the financial ones — and it will have staff members with expertise in the nonprofit sector.
Rather than getting bogged down in the process, Chernyak wants potential donors to remember why giving like this is important.
"This is about change, not charity," she says. "Charity is about handouts, and change is really about respect for our community and ourselves. It's about love. You can't lead the people forward if you don't."