Giving-circles’ growth a challenge

Giving circles have created a $100 million marketplace.

That’s how much money nearly 13,000 donors have contributed to 160 pooled funds that make grants to causes the donors care about, says a new report by the Forum of Regional Associations of Grantmakers.

In 2006 alone, the report says, giving circles made donations totaling $13 million.

Giving circles represent important new charitable options for women, African Americans, Latinos, Native Americans, young people and others whose giving traditionally has been outside that of mainstream philanthropy.

But as this blog reported March 12, separate research for the Association of Fundraising Professionals has found that giving circles also pose challenges both for donors and charities.

While the study by the Forum of Regional Associations of Grantmakers says nearly one-third of giving circles surveyed have “staying power” because they have been through over five rounds of grantmaking, the research for the Association of Fundraising Professionals says giving circles are not always consistent in their expectations and cannot be counted on for sustained and long-term funding.

Giving circles also can too focused on donors, creating challenges for charities to figure out quickly how to work with a mix of personalities and deal with donors who want to take a hands-on approach to their giving.

To add value where they most want and need it, giving-circle donors and charities must better engage and understand one another.