Collective giving is on the rise
Each year as families prepare to celebrate the year-end holidays, organizations are getting ready for the busiest time of year for giving. I, for one, am excited to see a much-needed shift in giving trends this year.
Despite increases in overall giving levels, philanthropy has seen troubling giving trends in recent years.
While overall rates of philanthropic giving have increased, the percentage of Americans who make small and mid-sized donations (up to $999) has declined to its lowest levels in two decades, dropping 4% in 2018. While the growth in total giving is good news, this trend reveals an increasing reliance on “large” donors — wealthy and high-income individuals — perpetuating the harmful idea that only deep-pocketed donors can address society’s most pressing issues. Fewer low- and mid-sized donors make our philanthropic sector less vibrant and less reflective of our diverse communities. When people feel left out of giving, money is left on the table and an opportunity to connect with our communities is lost.
The number of donors who support an organization more than once has also dropped. Between 2006 and 2015, the yearly donor retention rate for nonprofit organizations in the U.S. declined by 7%. Nonprofits rely on a steady stream of support from engaged donors to maintain financial stability and ongoing operations — particularly small, lesser-known organizations that are less likely to receive large grants. What’s additionally troubling is that one-time donors are less likely to get more deeply involved and work shoulder to shoulder with the communities they are supporting.
Today, the tide is beginning to turn. In 2020, Americans are giving more and giving faster than they typically do, despite millions being out of work amidst the coronavirus pandemic and resulting economic recession. GivingTuesdayNow, an emergency response to the unprecedented need caused by COVID-19, generated support from millions of people around the world back in May and saw more than $503 million in online donations to U.S. nonprofits in just one day, and $2.47 billion on Giving Tuesday (December 1). These weren’t donations from mega-donors or large community foundations; they were individual donations from everyday people like you and me. Coming together in this way to show generosity on behalf of our communities is how we will continue to shift the philanthropic sector to be more reflective of the society it is supporting.
Collective giving is continuing to disrupt outdated giving trends by creating a more inclusive, interactive and inviting philanthropic sector.
Giving circles bring together family, friends, colleagues, and neighbors for the common good. Members pool their dollars to support a meaningful cause and decide together where the funds should go. By giving together, members multiply the funds, talent, and time they donate to organizations in need. New donors from all backgrounds engage with their community to make meaningful change happen. There is power and agency in this democratic model of giving, and its’ momentum is only increasing.
Giving circles are increasing contributions by everyday givers, diversifying and democratizing philanthropy in the process.
Over the last decade, the number of giving circles in the U.S. tripled to more than 1,600. A 2016 study showed that American giving circles have engaged at least 150,000 people over the past two decades and given away as much as $1.3 billion dollars to local organizations, making giving circles one of the fastest-growing forms of philanthropy.
These new giving circles are more diverse than the traditional philanthropic sector. A majority were created around a particular identity, such as gender, race, age or religion. Women comprised a majority of members in 70% of giving circle groups, and approximately 40% of circles had one of more African American or Latino members. Newer research from 2018 suggests more recently formed giving circles are even more diverse in terms of gender, age, race and income level.
Giving circles are localizing giving, creating more engaged donors who work alongside the communities they are supporting.
Most people who start or join a giving circle are not looking to support large, well-known and well-resourced organizations: they’re finding local groups in their own communities that may not receive support from mainstream philanthropy. Take the Peninsula Latina Giving Circle, which pools together resources to support Latinx women, children and families in San Mateo County near the Bay Area. Or Denver African American Philanthropists (DAAP), the first African American/Black male giving circle west of the Mississippi. Following George Floyd’s murder, they invested in the Black Resilience in Colorado (BRIC) Fund, which will direct resources to address systemic racism and its impact on Black communities in Denver. Rather than an outside donor giving to a community they are unfamiliar with, people are giving to those who have lived similar experiences as them.
What does this mean for the future of philanthropy?
In this extraordinary time when helping our communities has become more important than ever, collective giving has the power to transform local giving across the country. Giving circles will continue to bring many more — and more representative — voices to the table: people of color, women, LGBTQIA+ people, those without wealth, youth, people in rural communities, religious minorities, and it doesn’t stop there..
At Philanthropy Together, we are committed to strengthening and scaling this movement. By 2025, we have set an ambitious goal to bring the number of giving circles to 3,000, engage 350,000 people and grant $1 billion to support communities around the world. I am excited to continue work on our partnership with more than a dozen collective giving networks and Grapevine in 2021 as we build the first-ever filterable global giving circle directory! By working together, we can continue to foster community connections, increase contributions to organizations in need, and finally change the perception of who is a philanthropist.
As we approach the holidays, I encourage you to explore giving circles as a way to get involved in your community. You can plan a pop-up giving circle with your family around the holiday table, or you can host one and connect with your college friends via Zoom. At a time where we cannot hug each other freely, there is power in talking about our values and giving collectively with them in mind. Think about that cause that is close to your heart and invite your loved ones to learn more about it. Research together a couple of projects or grassroots nonprofits that you have been willing to support and just do it. Join the more than 150,000 people involved in this movement. Love humanity; be a philanthropist.
