James Boyd from artsupport Australia* was the guest of Swinburne Philanthropy Alumni at the final Maimonides Society event for the year.

James has been involved in the establishment of Impact100 WA which is a giving circle based on the 14 highly successful Impact100 giving circles in the United States, originally established by Wendy Steele in Cincinatti in 2001.

James gave a highly entertaining presentation which clearly posited the benefits of giving circles – as opposed to donor circles – and how to set them up successfully to ensure sustainability. While Impact100 WA is only in its first year, James spent some time last year as one of the winners of the 2010 FIA Perpetual Scholarship visiting and studying giving circles in the US.

James stressed that some of the language is interchangeable – collective giving groups or collaborative giving groups – but that the importance is on them being giving groups and not donor groups – with the main difference being that they are set up by people who choose a cause – not a cause or a not for profit which then mobilises its donors.

Here’s the giving circles guide for dummies which James shared with us which you might find amusing and instructive: How to start a Womens’ Giving Circle, aka the Barbie video.

From James’ interviews and study in the US it was clear that while giving circles are more popular with women (participant gender ratio is 80% women to 20% men) there are several other common attributes to successful giving circles:

they have at least 5 participants
an agreed minimum donation amount and time frame
clear decision making processes on how to distribute to agreed charities
money in/money out – ie the giving circle does not create an endowment – gifts are spent in the year they are pledged
the circle is donor driven – not cause driven or fundraiser driven or organised by a charity or not for profit.
encouragement of donor participation and education
a social element
formality varies depending on size.

James spoke about Colleen Willoughby from the Washington Womens Foundation and how their ideal was to mobilise womens’ interests to give them knowledge about their community. That group now has 500 donors contributing $2000 each which gives them $1,000,000 to distribute each year. Their keys to success: donor education, learning and leadership. They make very few grants of less than $100,000 because they want to see real impact within their community. This highly professionally organised giving circle was contrasted with the Portland Giving Circle which has 12 women who contribute $500 each. They give one grant of $6000 to a women rising out of poverty in Portland through the Portland Community Foundation – and have now created an alumni of the women they have supported. Although organised in a more ad hoc manner, the impact on the community and benefits back to the women donating through their satisfaction and pride in participating are equally valuable.

Giving circles demonstrate other long term benefits such as a high number of members contributing additional funds to programs supported, high percentage of giving circle donors participating in not for profit boards, high level of support for charities’ fundraising efforts, pro bono support and increased volunteering through their experience of close engagement with the organisations supported through the giving circles. In addition members share their learnings through speaking engagements on community issues, philanthropy and giving.

James talked about both intrinsic and extrinsic advantages of giving circles:
power by numbers – they make you feel like a major donor as you are part of something bigger
they create an engaged, enhanced and shared giving process
enable less wealthy people to be involved
informal and flexible
create enriched community involvement
&
can support “risky” projects
suit hard economic times
are ideal for rural or remote communities
create scope for advocacy
appeal to men and women
success breeds success
they bring new money to the philanthropic sector.

While there are many models for giving circles, ranging from the very large to the very small, some of the key elements remain the same:

Some of decisions needed to be made in setting up a giving circle include:
What do you want your impact to be – and where do you want your impact to be?
What causes are you interested in?
What size do you want to aspire to?
What are your short and long term objectives?
What is the donation level? (hint – most common in US is $1,000 with the average being $2,500)
What is your communications strategy?
What’s the giving process – ie through a central point or directly to the non profit
What is the application process, assessment process, reporting process for recipients?
What is the circle’s commitment to education and social engagement?
Are there admin costs? What will they be?
Workload – how much and who will do it?
Sustainability – the big question.

Impact100 WA determined a cause area – youth at risk, and used this as the hook to find more donors to join the circle. There is an emphasis on equality of all members, so people who might contribute more dollars still only have one vote when it comes to determining recipients. Impact100 WA decided to incorporate as an entity, but not to seek DGR, so they have all funds directed to the Australian Communities Foundation which then provides tax deductible receipts to all donors.

This year Impact100 WA distributed their first $100,000 to an organisation which made it through from 28 applications and a several tiered shortlisting process. According to James, the keys to success for Impact100 WA are: leadership, visible impact, member equality, 100% distribution of funds, education and learning, professionalism and excellent communication.

Seri Renkin also presented on her experience of being part of a giving circle, initially through Social Ventures Australia‘s Angel Network, and then through an informal extension of this. Seri’s group targeted financially independent women wanting to support women, children and young people in Victoria. Her group of ten participants contribute $5000 per year and have had to evaluate how they can create impact and support organisations without being a drain on them. They initially undertook a large amount of due diligence and research, but realised they were being overanalytical and have now moved to a more flexible approach. They particularly wanted to invest in capacity rather than programs. Seri spoke with great passion of their commitment to social change, the importance of evaluation and reflection, the need to understand how far your money is going, and the impact it makes on the sector.

Both Seri’s and James’ examples demonstrate that great impact can come even from smaller contributions – in passing Seri mentioned a local group which contributed funds towards an air conditioner so that women in a prison could spend more time making tee-shirts, (which they enjoyed doing), in a room which had previously been overheated and thus restricted the amount of time they could spend there.

Another example of a giving circle is the Awesome Foundation, also based on an international model, where ten people contribute $1,000 per year and have an open process for applications from an “awesome” project. Still growing strong in Melbourne, their most recent grant has been recently awarded to a project alleviating street poverty in Burkina Faso.

Further reading:

What do you think of giving circles? Are you aware of any that work in a different way? How likely would you be to join one? What do you think the drawbacks might be?

I look forward to your comments.

*Artsupport Australia was absorbed into Creative Partnerships Australia in late 2012.

Sharon