Charitable donations have been declining, along with the economy. But one type of giving appears to be on the rise: giving circles. Many people are forming these groups where they pool their funds so they can have a greater impact on a charitable cause. Their growth comes at a time when donors say they want more control over how their charitable dollars are spent.
A new study published Thursday says those who belong to such circles tend to give more money.
One such circle, in Washington D.C., is called Gather and Give, Let's Eat, or GAGLE for short. It's a group of about two dozen young professionals who have each contributed between $75 and $200, for a total of almost $2,000. They hope to decide by June where to donate the funds.
Most of the members of GAGLE are women in their mid-20s. They met at college, work or through mutual friends, and their monthly meetings are, in part, a chance to socialize. It's also a chance to eat — they always start with a potluck dinner.
But it's the giving part that really ties GAGLE together. The members don't have much money, but they still want to make a difference.
Making The Pitch
On a recent weekday night, GAGLE invited Linda Kaufman, from a charity called Pathways to Housing, to address the group. They wanted her to explain why they should give their money to her organization, as they whittle down a list of possibilities. The circle's organizer Sunitha Malepati, who works for a nonprofit organization by day, tells Kaufman the circle has decided it wants to help alleviate homelessness.
"So we wanted to get a sense of what you guys do, how you're different from other organizations in the city," she says. "And give us a sense of your needs as an organization and how we can make a difference, whether that's volunteering there, making a one-time contribution."
So Kaufman makes her pitch. She explains that Pathways works with the chronically homeless and mentally ill, first by getting them into housing. She says $2,000 might not seem like a lot of money, but it can set up two people in apartments, with furniture and supplies. She appears to win the group over with poignant stories of people whose lives have been turned around.
"I can't tell who's going to make it and who is not, but I think we have an obligation as a country to offer people the possibility of the dignity of housing," she tells the group gathered in Malepati's living room. There's a silence, and then everyone breaks into applause.
Member Laura Sanchez is very impressed. "Well, you've totally converted me. I'm like 'Pathways, all the way' now," she tells Kaufman.
Still, Sanchez has a question — why aren't there any volunteer opportunities at Pathways to Housing? Wouldn't that be a more efficient way to help people? Kaufman says they're looking into it.
Avoiding The Bureaucratic World Of Fundraising
These giving circle members are very serious about where their money ends up. Angela Eikenberry of the University of Nebraska at Omaha says that's pretty typical. She has written extensively about giving circles and says those who join tend to be reacting against an increasingly bureaucratic world of fundraising.
"Giving circles are very appealing in that context because they enable people to get together, socialize with people, but still do good," Eikenberry says.
She estimates that there are about 600 circles around the country, but no one knows for sure because they're so informal. What she does know is that those who participate say they give more as a result of belonging and end up becoming more involved in the nonprofit world. That's according to a study released Thursday by the University of Nebraska at Omaha, the Forum of Regional Associations of Grantmakers and the Center on Philanthropy at Indiana University.
"The money from the giving circles sometimes is kind of beside the point," Eikenberry says. "Those members may talk about the nonprofit to other people that they know, and new connections are made."
And those connections can lead to future giving, she says.
Volunteering At Organizations
The members of the GAGLE giving circle appear to be right on track. They've been volunteering at the charities they're most interested in — in part to check them out. On a recent Sunday, several GAGLE members join two-dozen volunteers at So Others Might Eat, a Washington nonprofit that provides meals and other services to the homeless.
Patricia Davis of SOME divides the volunteers into two groups — one to help set the tables for lunch, the other, including three members of GAGLE, to man the serving trays. Like assembly line workers, they fill plates with potato salad, fried chicken cutlets, greens, biscuits and brownies, and pass them toward the lunchroom door.
Men, and a few women, some carrying satchels and coats, file past to collect their food. The atmosphere here, for the most part, is cheerful and very efficient. But Natalie Leonhard, from the giving circle, is a little hesitant when she scans the room during a break.
"It seems really well run. There's an abundance of volunteers, which usually means a good thing, like there's a good reputation about the organization," she says. "It's too bad there's not more work to do."
She and the others begin to wonder, does So Others Might Eat really need their money? The charity has a lot of community support already. Maybe the giving circle could have a bigger impact with a smaller, less established charity.
'You Can't Fix That Sort Of Thing With Money'
The members report back at their next meeting. The volunteering has been an eye-opener. Malepati says one feeding program for homeless women was the complete opposite of So Others Might Eat.
"It's like a zoo in the kitchen. There's people running all over the place," she says. "There's this guy, who was clearly the person running the kitchen, screaming 'Out of the way. Hot plate!' It was just chaotic."
But that raises an interesting question for circle member Patty Wynn.
"Is that the type of organization that we could make better, if we had money to give? Or do you think even if you gave more money to that organization, they would run it in the same way?" she asks.
Malepati responds that one problem she noticed at the feeding program was the lack of interaction between the homeless women and the staff, and among the women themselves. Clients appeared to just come, get mediocre food and leave.
"You can't fix that sort of thing with money, I don't think," she says.
The circle eventually decides to drop both SOME and the other nonprofit from their list. They agree on four finalists, including Pathways to Housing, and say they'll do more research before making a choice by next month. They want to check out the groups' financial records — things such as how much money the executives make.
No matter the outcome, the members of this giving circle say the experience has been good. This is Michelle Lin's third giving circle.
"Even if we don't feel like we're giving away a lot of money, I think it's just building in commitment that'll expand to other things that we do," she says. "So beyond our involvement in this giving circle, I think we're all probably going to be more engaged with our communities overall."