Giving Circles: How Can Philanthropists Collaborate to Donate Better?

What Are Giving Circles and How Do They Work?

Giving circles, also known as funding circles, are groups of philanthropists who collaborate to support various causes. The primary aim is collaboration. Instead of donating in isolation, members of a giving circle coordinate their efforts. They may pool funds or share knowledge and make funding decisions together. The sizes of these circles can vary widely. They can consist of just a few aligned donors or large networks with hundreds of members. Importantly, the level of coordination can differ. Some giving circles share a common application process for non-profits and even combine their funds into joint grants. In contrast, others involve communicating about opportunities while each member donates separately.

Despite these structural differences, the central idea remains the same: by working together, donors can give more effectively than they could alone. Typically, a giving circle will agree on a cause area, such as education, health, or animal welfare. They establish processes for finding and evaluating nonprofits. Many circles hold occasional meetings or calls to discuss potential grantees.

Some perform shared due diligence, which involves researching and vetting nonprofits. Each member can learn from the others’ findings, avoiding duplication of effort. Groups differ in their granting processes. While some circles make collective grants, others pool funds and hire a fund manager. In some cases, each donor makes their own grant decision but benefits from the group’s information and insights. This allows for shared learning while respecting each donor’s autonomy.

The Power of Collective Giving in Philanthropy

Solo philanthropy has many limitations that collective giving can overcome. A giving circle directly addresses these issues and can make philanthropy more effective:

• Simplifying the Process for Applicants: Instead of nonprofits having to approach multiple funders separately, a giving circle provides a central point of contact. Charities can apply just once to reach the whole group, saving significant time and effort on both sides.

  
  

• Shared Information and Due Diligence: Members usually share research and evaluations of potential charities. This leads to much more informed decision-making. Each donor benefits from the collective due diligence of the group, rather than working with limited information.

  
  

• Comprehensive Coverage of Causes: Through coordination, circles help ensure that important needs in their chosen cause area don’t fall through the cracks. With effective communication, funding gaps can be met, and donors can avoid overlapping on the same grants.

  
  

Additionally, a good giving circle can build a sense of community among philanthropists. This makes the process feel more like a collaborative venture where donors can learn together and inspire each other to do more.

How Can Philanthropists Collaborate Through Giving Circles to Donate Better?

Different giving circles have varying levels of coordination and organization. Some prefer high levels of engagement throughout the grant-making process, while others meet occasionally to share information. Many giving circles establish a regular cycle or grant rounds, during which they collectively invite and review proposals. For example:

1. Call for Proposals: A circle might issue a single call for proposals rather than each donor advertising their grant separately. This could attract a wider pool of candidates and create a “one-stop shop” for high-impact projects seeking support. This also reduces the burden on non-profits to prepare and submit multiple applications with different requirements to each donor.

   
   

2. Initial Vetting and Review: Once applications come in, collaboration continues in the evaluation stage. Members can choose to divide tasks. A screening committee or a few designated members might do the first review of all applications, sometimes led by a domain expert in the field. This initial screening filters out lower-potential proposals and identifies the most promising nonprofits. Memos about the short-listed applications are then shared with all circle members for further review.

   
   

3. First Meeting and Interview: Members meet online to discuss the top opportunities. These discussions allow philanthropists to ask questions and gain clarity on which non-profits are most impactful. Each funder can volunteer to conduct a final interview of one or two of the finalists or ask them for additional information about their work. All findings are then shared back with the group, so everyone benefits from each member’s research.

   
   

4. Decision Meeting: Members meet to discuss findings after the final interview. They share their decisions and reasoning to fund or not fund the non-profits. This is also where they explore opportunities to co-fund non-profits.

   
   

Instead of donors separately vetting the same non-profits in parallel, they coordinate so that each non-profit is vetted once deeply. The insights are distributed to all. This can save a lot of time and bring diverse perspectives into the evaluation, leading to more well-rounded funding decisions.

Finally, collaboration in a giving circle doesn’t mean donors lose freedom over their money. In most giving circles, each philanthropist still makes their own independent decisions about which non-profits to fund and how much to give. Donors sometimes choose to co-fund an organization together or fund different ones. Because they coordinated throughout the process, their decisions are now much better informed and often aligned with others to avoid duplication. In sum, collaboration in giving circles can lead to smarter, more strategic donations.

Benefits of Giving Circles for Philanthropists and Communities

Giving circles create a win-win situation for both donors and the communities they serve. On the philanthropist side, the benefits include more effective giving due to a shared workload and more learning opportunities. Donors in a circle gain access to a high-quality pipeline of grant opportunities that have been collectively vetted. This can increase the impact per rupee donated.

By sharing the due diligence process and coordinating funding, they also save considerable time and effort. This could amount to dozens of hours per year for each member by outsourcing initial screening and sharing notes. Additionally, funders in a giving circle build a peer network. They learn from each other’s experiences and expertise, which not only improves current donations but helps them grow as informed philanthropists. Many donors find the collaborative aspect rewarding in itself. Philanthropy becomes a social and educational experience rather than a solitary task.

On the other side, because of increased coordination, communities are more likely to receive comprehensive support rather than piecemeal or duplicative aid. Moreover, giving circles often have a shared vision and longer-term commitment to their chosen cause. This can lead to more sustained impact. When donors pool funds, they can support larger projects or provide multi-year grants that individual donors might not afford alone. This increases stability for beneficiary organizations.

How Impactful Giving Enhances the Effectiveness of Giving Circles

While any group of donors can form a giving circle, partnering with an organization like Impactful Giving can take the effectiveness of a giving circle to the next level. Impactful Giving is a philanthropic advisory that emphasizes high-impact and evidence-based giving. It brings these values into the giving circle model.

One key contribution is rigorous research and expert guidance. They work with evaluators and researchers to identify non-profits and programs that are proven to work. This means that a giving circle facilitated by Impactful Giving starts with a curated list of high-impact opportunities. Members choose from interventions that have strong data behind them.

Impactful Giving also provides coordination support and shared infrastructure for the circle. By taking care of logistics, they free up the donors to focus on strategic decisions rather than administrative details. This level of organized collaboration would be hard to achieve without a facilitating body, especially as a circle grows.

Each donor retains full autonomy over their grants, even as they benefit from the group’s pooled intelligence. This approach respects that philanthropists have individual priorities and comfort levels. However, it augments their decision-making with high-quality insights.

FAQs

1. What are the key benefits of giving circles in philanthropy?

Giving circles improve donor coordination, enabling more strategic and informed giving. Members share research and divide due diligence, saving time and effort. This collective approach helps spot high-impact opportunities and increases each rupee’s effectiveness. Donors also benefit from peer learning and a sense of community, while nonprofits receive more consistent, targeted support.

2. What is the concept of a Giving Circle?

A giving circle is a group of donors who collaborate to support causes. Members coordinate by pooling funds or sharing information and making joint or individual donation decisions. The core idea is to enhance the effectiveness of philanthropy through shared learning and structured decision-making.

3. How do I join a Giving Circle and start collaborating on donations?

We can help you identify a circle aligned with your cause area and preference. Many welcome new members and offer different levels of involvement. You can also form your own by gathering like-minded donors, setting a focus area, and agreeing on how to coordinate funding decisions. Impactful Giving can help structure and support your circle.

4. How can Impactful Giving help your Giving Circle?

Impactful Giving can help structure the funding circle, run application rounds, and provide expert-vetted funding opportunities. They can handle research, coordination, and logistics to support informed decision-making. Members retain autonomy while benefiting from shared intelligence. This approach maximizes cost-effectiveness and impact per rupee, making collaboration more seamless and strategic.