July 17, 2014
Giving circles tend to fly under the radar in most discussions of fundraising strategies. In some ways, this is due to a shift in focus on getting as many individual donors participating in campaigns so that nonprofit organizations have a larger pool of people to reach out to during a drive. The logic behind this likely resides in the idea that a larger number of people willing to give to a nonprofit will enable more sustained financial support. However, the same principle underlies the premise of giving circles, only on a smaller scale.
For instance, The New York Times wrote an in-depth article looking at the role of giving circles in philanthropy, especially the work of Women for Social Innovation. This collective composed of 20 women is a membership organization that provides financing for nonprofit groups in and around Philadelphia. They recently partnered with Rock to the Future, an enterprise providing financially at-risk children with music education. With $15,000 in startup funding from the giving circle, Rock to the Future has been able to take advantage of a large cash infusion and this can create a difference in target communities more quickly than individual donations resulting from fundraising campaigns, The Times wrote.
Connected to Give, a research series exploring the scope of giving, further investigated the role of giving circles in the world of nonprofit contributions. The report, "Connected to Give: Community Circles," found that nearly 13 percent of American donors have been part of a giving circle. In terms of demographics, household income levels for people having participated in this type of philanthropic group generally ranges between $50,000 and $100,000. What's more, women are more likely to belong to giving circles, as are people below 40 years old.
Although each nonprofit usually serves a unique group of donors, this information can help organizations locate new revenue sources to amplify their fundraising efforts.
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