Give Through Giving Circles

Published: 12-20-2006
A giving circle is a form of philanthropy headed by a group of people who want to take an active role in how their money supports a particular cause or issue. Circles vary in group size and structure,but members pool their donations to benefit their selected cause or issue.

A giving circle gives you greater influence over what your donations are used toward and whom they benefit. If this piques your interest, here are some things to consider:

Mission: Determine what you want to achieve.

Your beneficiaries: Visit prospective recipients in person to meet their leaders or inspect their organization. Get clarification on anything that is unclear.

Group size: Pick the group size that you feel most comfortable handling.

Group structure: Your circle can be event-based, without members who participate consistently; or, it can have consistent members. It can have an informal structure or a formal structure made up of committees.

Organization: Decide who will run which aspect of operations. You may have to hire a staff person, if your circle isn't run entirely by volunteers. Consider where and how often you will meet, and the time commitment expected of each member.

Funding: Decide how you and your fellow members will fund your organizations operations. Giving circle experts recommend that members make an annual donation to support administrative tasks and to ensure that they are still contributing.

Location of funds: Your options for holding the circles donations include a separate bank account, a host organization (such as a donor-advised fund), or a public foundation. Or members can write checks directly to the chosen cause, eliminating the need to store money elsewhere. Check with your financial professional to see if your giving circle is eligible to obtain nonprofit, independent 501(c)(3) status, which provides tax benefits.

Lastly, check periodically with the organization to ensure that your circles donations are doing what you had intended them to do. Obtain a report from your recipient that details how your funds have had an impact.

With the right balance, you can have the desired effect on the community targeted, while feeling good about what you are doing.

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