Zoe Lawhorn

During the holidays, we gather. These special gatherings celebrate the spirit of the holiday season, which offers an opportunity for optimism and hope. A moment to see the best in ourselves, our loved ones, and our friends – and in many cases, a moment to remember those in need.

Over the last few years, I have noticed a lot of my friends are including a new activity during their holiday celebrations — they are giving together. Someone organizes a night out and asks their guests to bring a monetary gift. Then the group gives their collective sum to a person or family in need. It might be a single mom one of them knows is struggling, or they might give their collective gift to a nonprofit they selected together.

These seasonal giving circles function as a simplified collective giving circle – a philanthropic model which exists across the broader landscape of philanthropy nationwide.

On a broader scale, giving circles are often composed of individuals or small groups who pool their financial resources to support charitable causes. The Women’s Fund of Smith County is one such organization, and we are a member of Philanos, an organization dedicated to supporting giving circles across the United States. Philanos shares best practices, helps independent giving circles network and collaborate, and organizes a national conference each year to help cultivate this model of philanthropy.

This month, Philanos released data from its study called “In Abundance.” The report offers valuable insights into how giving circles function, their evolving role in philanthropy, and the broader trends they reflect in charitable giving. As micro-giving circles pop up during the holiday season, I thought it timely to report the findings of this study.

What are giving circles?

A giving circle is a group of individuals who come together to collectively pool their money and decide how it will be distributed to support charitable organizations or causes. This model emphasizes collective decision-making, shared responsibility, and community engagement. The size and structure of giving circles vary, but typically, members contribute a set amount of money and meet regularly to review and choose grant recipients.

Key trends, data insights

The report from Philanos offers an important snapshot of the current state of giving circles and highlights the significant role they play in expanding philanthropic participation. One key takeaway is the increasing diversity of members in giving circles. As of the latest data, giving circles are growing in demographic diversity, including a larger representation of women, people of color, and younger generations. This shift is reflective of broader societal trends toward inclusive and community-driven philanthropy. Giving circles have moved beyond the traditional model of wealthy individuals dictating charitable causes and now include a wide range of voices, making philanthropy more accessible and participatory.

Another notable finding is the growing total amount of funds being contributed through giving circles. In the 2023 fiscal year, giving circles collectively raised over $300 million, demonstrating both their financial influence and the increasing enthusiasm for this giving model.

The data also reveals that giving circles are effective in creating a sense of community and long-term engagement among their members. Participants in giving circles report a higher level of satisfaction with their charitable activities, with many individuals noting that they feel more personally connected to the causes they support. This is a stark contrast to traditional forms of philanthropy, where donors may not have the same level of direct involvement or understanding of how their contributions are being used.

Role of giving circles in expanding philanthropy

Giving circles are playing a critical role in expanding the reach and impact of philanthropy. By pooling resources, they allow individuals who may not have significant wealth to contribute in meaningful ways. This collective approach enables small-scale donors to have a much larger impact than they could independently. The report highlights that the average contribution to a giving circle is approximately $1,000 per member, but when aggregated, this can lead to significant grants for organizations working in areas such as education, social justice, and health.

Furthermore, giving circles encourage a participatory model of philanthropy. Unlike traditional models where the decision-making is often in the hands of a few major donors, giving circles engage all members in the decision-making process. This collective approach not only empowers individuals but also promotes a sense of ownership over the projects funded. The ability for members to vote on or discuss grant recipients fosters a deeper connection to the causes supported, potentially leading to more sustained involvement and advocacy.

The future of philanthropy is brighter because of individuals who give together, and I would encourage you to try it out. Gather a group of friends, chose a recipient, and then give bigger together than you could on your own – if you’re a woman, you could join the Women’s Fund of Smith County! Membership is open to any woman with a giving heart. Learn more at womensfundsc.org.