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Giving Circles Lead by Example – Strategic Philanthropy in Action

posted on: Friday, May 22, 2009

By Lisa Ranghelli

“I’m just more aware of the nitty-gritty of needs that happen every day. I just feel like, now, I’m … on the front line.”

This quote from a giving circle member speaks to the knowledge and sense of community engagement that donors develop when they participate in collective philanthropy. And in doing so, giving circle members follow many of the philanthropic values and practices NCRP promotes.

According to a new report, The Impact of Giving Together, individual donors in giving circles gave more strategically than a control group of donors. Specifically, giving circle members were more likely to: give to causes that advance a vision of change; support general operating expenses; make multi-year gifts; and take into consideration cultural differences, race, class and gender when deciding which nonprofits to support.

The report, written by Dr. Angela Eikenberry and Jessica Bearman, also found that giving circle donors give to a wider array of types of nonprofits than do traditional donors. Giving circle members are more likely to support groups concerned with women, ethnic and minority groups, the arts, and culture or ethnic awareness. And they are more likely to give to “other” causes such as the environment, advocacy, neighborhood development and international aid. Interestingly, the more engaged a donor becomes in a giving circle, the more that person becomes involved in community problem-solving and efforts to change government policies.

Giving circle members gain “a better understanding of the nonprofits operating in their communities and internationally, as well as an understanding of the issues these nonprofits face in serving their constituencies.” This may well explain why their funding practices are more strategic.

As some foundation and interest group leaders decry the values and aspirational goals of NCRP’s Criteria for Philanthropy at its Best, giving circles actually embody many of them, from general operating and multi-year funding approaches to support for diverse communities and policy change strategies.

Perhaps there are lessons here for institutional philanthropy. Foundation trustees may want to ask themselves: Am I aware of the ‘nitty gritty needs’ and the ‘frontline’ issues being faced by the constituencies I care about? Do I really have a good understanding of what it takes for the nonprofits I support to be successful? Am I as knowledgeable as I could be about the issues I seek to address?

Lisa Ranghelli is senior research associate at the National Committee for Responsive Philanthropy (NCRP).

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