Giving Circles - The New Philanthropy

Giving Circles should be promoted in Australia by Governments and Not for Profits as a means of tapping into new philanthropy, according to Masters research from QUT’s Australian Centre for Philanthropy and Nonprofit Studies.

A thesis by Masters Researcher Lesley Ray explores the relationships that exist between a giving circle and the Not for Profit organisations it supports. The case study focuses on a formal giving circle operating in Austin, Texas, in the US and offers lessons for the Australian Not for Profit sector.

“Giving Circles are delivering the new philanthropist – who is not only giving as an individual, but also acting within the context of the group,” Ray said in the thesis.

“A giving circle is a group of individuals who come together to pool and give away resources, educate members about philanthropy and issues in the community, include a social dimension, engage members, and maintains its independence from Not for Profit organisations (Eikenberry, 2005, 2006, 2007a, 2009).

“As giving circles continue to grow in number and influence members’ philanthropic and civic behaviours, knowledge and attitude it is important that all stakeholders understand the relationships that exist between giving circle members and the Not for Profit organisations they support.

“Findings from the study by Scaife et al. (2011) highlight opportunities for government to actively foster and promote philanthropy and as government has limited resources to fund Not for Profit organisations it would appear to be in their best interest to enable donors’ expressions of philanthropy to be as easy as possible.

“Giving circles are one such mechanism to be cultivated and perhaps promoted by government through such agencies as the national charity regulator – Australian Charities and Not-for-profits Commission (ACNC).”

Ray says an opportunity exists for Not for Profit organisations, particularly smaller organisations, to engage and steward relationships with giving circles when the giving circle has identified them as an organisation they wish to support.

The research indicates that many members of giving circles are experiencing organised philanthropy for the first time and that through the giving circle experience their commitment to giving is increasing.

“Given the opportunity, Not for Profit organisations can devise strategies to respond to this ‘new philanthropy’, which is emerging throughout the United States and now Australia,” she said.

“The findings provide insights into the giving circle phenomenon stimulating further conversation for fundraising practitioners in how they engage not only with giving circles but donors who may wish to be engaged at a different level, compared to the more traditional means adopted by Not for Profit organisations.

“This thesis has reinforced that collective giving is attractive to women; therefore Not for Profits can use this knowledge to create a giving mechanism within their organisation that engages women.

“One such mechanism is the ‘donor circle’ model, which has many of the same characteristics as a giving circle except that it is created and managed by the Not for Profit and the donor circle members fund that organisation exclusively rather than numerous organisations (Andris, 2011; Beeson, 2006; Eikenberry, 2009).

“A donor circle has the potential of an outreach model and would be particularly beneficial, although not limited to, organisations that do not have a natural constituency (for example, university alumni year groups) as the outreach model reaches donors through a peer-to-peer approach.

Ray says that currently there are five known giving circles operating in Australia and based on the growth of this style of philanthropy in the United States and elsewhere there is reason to believe the number will grow in Australia.

“The findings from this thesis can be interpreted and applied by Australian fundraising professionals in their relationships with giving circles.

“For fundraising professionals, this thesis has many practical implications as they seek to either extend or confirm their current knowledge and practice in how they work with and develop meaningful relationships with donors who are highly engaged and hands-on in their philanthropy.

“Finally, it is hoped that this thesis will be of use to giving circles as they continue to grow in number throughout the world.”

The emergence of giving circles and their relationships with nonprofit organisations: A case study is available at  http://eprints.qut.edu.au/64720/