Guest Post: Money Made You Mean

Thanks, AP, for this guest post. I am so lucky that I have so many smart friends.
AP writes:
I take my title from a song on the Indigo Girls’ 2006 album, Despite our Differences. In this song, Amy Ray challenges:
“How much do we really need?
a question, if you have to ask
just means what it means—
the question that says everything.”

How much, indeed? I spent a good portion of my last year of grad school (Go Heels!) exploring alternative forms of philanthropy—in particular, giving circles. I thought perhaps I could solve the “how much” question for nonprofits that struggled to find sufficient funding through traditional streams. I first sought giving circles as a release from more restricted forms of funding, but discovered—at least in my narrow (let’s say “targeted) research—that giving circles can’t really give a nonprofit a flush bank account. However, they can help circle members form a softer answer to the “how much do we really need?” question.Practices providing donors with more control over charitable gifts are gaining popularity in the philanthropic sector. Giving circles are a unique part of this movement: members pool resources, benefit from social opportunities, share and volunteer resources other than money, and maintain decision-making authority (Eikenberry 2006). According to the Giving Forum, a part of New Ventures in Philanthropy, a giving circle is a group of individuals that pool resources and make allocation decisions together. Generally, the pooled financial resources are donated to local nonprofit organizations. Circles can be as simple as a group of friends gathering for dinner and writing individual checks to the same nonprofit. Or they can be formally structured, with 100 members contributing to funds managed by a community foundation and making allocation decisions based on grant applications. A 2004 New Ventures study identified 25 giving circles in North Carolina, with 10 in the Research Triangle—an area comprising Raleigh, Durham, and Chapel Hill. This is where I focused my research.

Proponents of the giving circle herald it as another form of civic engagement—not just fundraising. This is just what I found in a series of interviews with individuals representing eight Triangle-area giving circles. I was relieved to find an alternative to the ubiquitous argument (Thanks, Robert Putnam!) that our society is falling apart and for proof, just look at the Elk’s club attendance! Gary Fine and Brooke Harrington* posit a small-group model of civic engagement—the perfect thing to describe what I saw in giving circles. Fine and Harrington’s four indicators of small-group behavior include:

-forming networks
-creating identity
-distributing and maintaining collective goods
-extending group learning to a broader public.

The “tiny publics” formed by the small groups that exhibit these behaviors are actually an integral (and healthy) part of civil society. (Take that, dwindling bowling league!)

Forming networks. Giving circles rely on existing networks and create new networks for participants. In every case there was a catalyst that drew on friends, church membership, or professional associations to get circles off the ground. Once formed, members’ networks commingled. The groups used this new network to make connections to recipient organizations. Professional associations, prior volunteer experiences, and personal networks often played a role in which organizations were presented as funding options. Sometimes all it took was a conversation over coffee; sometimes, there was months of courting required to establish the core membership

Creating Identity. Many interviewees valued giving circle participation as a social activity. They relished forming new friendships with like-minded people or strengthening existing bonds. But being like-minded didn’t spare them from questions of values clarification. These conversations were integral to forming the trust necessary for making financial decisions together. And as always, there is the danger of succumbing to exclusivity. This is perhaps the burden and boon of the concept: strong ties are more likely to form within a small group of individuals, but size limitations require definite boundaries. A number of the groups have wrestled with how to have a diverse membership—whether racially, socio-economically, or geographically. Facing such questions meant many opportunities for individuals to discuss (read: debate and argue) group norms and values.

Distributing and Maintaining Collective Goods. Perhaps because of the potential for such discussions, my friends Fine and Harrington credit small groups (including giving circles) with providing a place where the public sphere can be explored and enacted. This enactment is most apparent in the way circles go about distributing resources—both intellectual and financial. This happens as circles promote both the causes they support and the concept. Many individuals I spoke with were hopeful that their participation would inspire the creation of new circles. Additionally, in the criteria that they choose for making funding decisions, circles put the values they debate during identity formation into practice. (In other words, they put their collective money where their collective mouth is.) But they don’t distribute only dollars: within these circles there was also non-financial support: pro-bono professional services, volunteer days, board service, and in-kind donations.

Extending Group Learning to a Broader Public. Thankfully for the disintegrating polis, what is learned in the group context can be harnessed for public participation. Members of giving circles I spoke with took values practiced within the circle and transfered them to a broader public. Every member I interviewed spoke of the educational component of circle participation: not only are individuals mentored in philanthropy, they also learn about the nonprofit sector, community needs, and community organizations that are addressing those needs. This learning sometimes leads to changes in personal giving practices. Conversations about giving practices focused on how they made decisions and where they allocated their personal giving outside of the circle. A number indicated that they were less likely to respond to mail and phone solicitations; they were more strategic in their charitable giving. Circle participation taught them how to research organizations and encouraged them to plan their yearly giving more deliberately—and in many cases, to give more money locally.

The individual giving circle members I spoke with had extended and reinforced their networks—both personal and within the broader community. They were more aware of community needs and organizations. Their participation had, in some cases, encouraged them to be involved with recipient organizations outside of the circle interactions—whether through volunteering or additional financial support. It seems, then, that they most important point of influence of the giving circle is the individual. Circles don’t generate large grants for nonprofits, but they do provide an opportunity for a personal experience with giving. And those personal experiences can shape one’s answer to the “how much” question—and even those of us without expansive wealth, when united, can use the money we do have to make the world a little less mean.

* Fine, Gary A. and Brooke Harrington. “Tiny Publics: Small Groups and Civil Society.” Sociological Theory. 22.3 (2004): 341-356.

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  1. Maria says:

    One thing that really excites me about giving circles is that they provide a great opportunity for traditionally less-empowered (read: less wealthy) groups of people to have greater influence in their charitable giving. I know that your research does not have a feminist agenda, but I especially like the idea that through giving circles women will be able to pool their resources together to make contributions to the organizations or causes that are important to them, and on their own terms.

    As you did your research, did you note disproportionate involvement of women or minorities?

  2. Caroline says:

    AP,
    Thanks so much for telling us about this. I have actually never heard of giving circles before, and I’m someone that’s into humanitarian stuff (that’s actually my calling in my ward.)

    I think this is so neat – a chance to meet like-minded people and learn more about good causes to donate to. I’m going to see if there are any in my area here in SoCal that fit my personal interests.

    As the humanitarian person in my RS, I had hoped that my humanitarian interest group could be a little like this. Not that I would be collecting checks from my group members, but that we would all be interested in searching out good causes and getting out there and volunteering. But I think, like so many Mo women, we suffer from Church fatigue a bit. It’s hard to sustain that kind of energy.

  3. AP says:

    Maria,
    Actually, part of the giving circle movement is working to expand–and demystify–the definition of “philanthropy.” Many circles nationally have grown out of the more formal “women’s funds” at community foundations and the Giving Forum has an initiative that researches and supports racial, ethnic, and tribal philanthropy. The goal is to help these communities recognize philanthropic traditions that they’ve been practicing for generations

    Caroline, you might want to check out the Giving Forum’s section on giving circles: they can help you find groups in your area, and might give you some ideas for sustaining humanitarian efforts at church, too.

  4. Louise says:

    Interesting post AP – I can’t wait to see you in less than 2 months! Now that we’ve all graduated, I really think it is time to begin the “we were smart enough to leave . . . ” giving circle.

    As I’m starting my high paying big-firm law job, I feel particularly dedicated to focusing on my value and putting my extra money in places that are of value (i.e. a giving circle, my retirement fund, future kids college) and not where I see so many of my co-workers money going (2 Lexus SUVs, excessive vacations, etc.). I wonder if I could start a giving circle with some of the like-minded women I work with. It seems like it would be a good way to bring those of us who share the same values together and give us an opportunity to support those values despite the culture we are engulfed in.

  5. Maria says:

    I’ve been thinking about the community-building aspects of giving circles since I put up AP’s post last night. While I LOVE the idea of giving circles, I think most LDS individuals already feel engaged in their church communities, and many are not seeking out additional “civic opportunities.” For LDS, I would think that the greater benefit would be seen in the control/choice over what types of causes were funded.

    Sadly, though, many LDS feel no need to make additional charitable contributions beyond tithing. While I laud the church’s humanitarian and other charitable efforts, there are certain causes I would like to support monetarily that I don’t believe the church would support publicly (i.e. organizations that lobby for undocumented immigrants).

    And as far as the “how much” question goes, I really believe in the old saying “if it doesn’t hurt, it really isn’t a sacrifice.”

  6. Justine says:

    I’ve been involved with Kiva.org for a brief period of time, and I love it for some of the same reasons you discuss here. Without vast financial backing, there is so little I feel I can accomplish. But by banding myself together with others, it’s amazing how quickly resources multiply.

    Have formal organizations or associations developed yet? Or is this still a small “investing club” -style operation?

  7. Deborah says:

    AP:

    What’s the profile of typical giving circle members? Are they mostly Upper Class? Did you come across any interesting stories about how such a circle got started and recruited members? You’ve piqued me interest . . ..

  8. Caroline says:

    Like Justine, I also love Kiva. It’s not a giving circle, but you do band with others to fund microloans for women (mainly) in the developing world. You can loan very small amounts – $25 – and help these people get on their feet. And the website is fun because you can actually look at their pictures and read their business plan.

  9. AP says:

    Justine: Most of the circles that I looked at delighted in their own grass-rootsy-ness; they want to stay small and under the radar; one, however, is hoping to have 200 members by the end of 2008, with each member making an annual contribution of $1200. Their funds will be managed by a community foundation and they’ll have a grants committee that will vet proposals and present finalists to the entire membership. (That’s really becoming more like a women’s fund, though, if you ask me.) I think being small and making decisions by consensus is what makes a giving circle a giving circle!

    Deborah: the Giving Forum probably has some demographic info on circle membership (the link is in the post!) Even in the Triangle-area, we have circles that are composed of upper-to-middle class two-income families, young African-American professionals, and a group of African-American seniors, and at least two groups that are made up of college students. My favorite story: a local Presbyterian church had applied the concept to their Sunday School curriculum: each class (from Kindergarten to adults) was assigned one of the churches missions and charged with forming a circle to support the organization and engage the entire congregation. (They focused on in-kind donations but were conscious about learning about the work of the org they were supporting.)

  10. Deborah says:

    You know, we could make a little giving circle right here on the blog, couldn’t we? Identify a charity each quarter, blog about it, link to the donation page, encourage our readers to donate a modest amount. Even if 20 readers and bloggers gave $10 each — well, that’s almost a Heifer water buffalo. And we could raise some awareness about some good organizations along the way. What do y’all think . . .

  11. Deborah says:

    Tatiana promoted Kiva on a previous thread, and I finally looked at the site tonight. I’m hooked. What a fabulous idea, and you don’t have to be wealthy to join the fun. I just spent $25 to complete a $250 loan to a seamstress in Mexico — and once that money is repaid, it becomes “credit” in my account. I can withdraw or (more likely) reinvest in somebody else.

  12. Caroline says:

    Deborah, great idea about forming a giving circle! I’m totally for it. Some logistical questions though: how would we go about deciding which charity to highlight? Would we try to hit different realms of charitable giving each quarter: children, animals, 3rd world, etc.?

  13. Deborah says:

    Good question, Caroline. I’d love to hear suggestions from readers/bloggers. If Tatiana/Justine/you had not brought up Kiva, it might not have crossed my radar screen for months or years. They might be a good place to start, considering its emphasis on helping women and self-reliance. I read up on the history of their organization, and I’m completely inspired. Other thoughts or “nominations”?

  14. Dora says:

    Finally, I’ve gotten around to reading this great post … thanks AP.

    Was talking the other day with a friend, to whom I’d loaned _Three Cups of Tea_, and she told me about kiva.org, and all the positive experiences she’s had. It sounds like just the type of thing I can do at this time … donate money that goes directly to helping another person, without taking a lot of my time. A nice way to ease into philanthropy!

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