Giving circles: Bang for the buck

Most people don't have the bulging bank accounts of Bill Gates or Oprah Winfrey, even if they share a powerful desire to change the world by donating money.

That is where a philanthropic geometry known as giving circles, groups of people who band together to get the most out of their charitable donations, is filling a niche.

"It allows me the satisfaction of knowing that my contribution is being pooled together with a lot of similar-minded individuals and helping to make a real positive impact on the Asian American community," says Michelle Gollapalli, chair of the Asian Mosaic Fund, whose members live in the Philadelphia region. "Alone, I could never do that."

Giving circles are a phenomenon nationwide - other local ones include Women for Social Innovation, Impact100 Philadelphia, and Dining for Women. Nationwide, the first count of giving circles, done in 2004 by the Forum of Regional Associations of Grantmakers, found about 200, while a current estimate puts them at 550.

"Emerging across America in recent years, giving circles are typically small groups of donors who put a few hundred to a few thousand dollars (though in some cases much more) into a pool of funds, teach themselves about effective forms of philanthropy and issue areas, and decide collectively how to allocate their money," writes Laura Arrillaga-Andreessen in her book, Giving 2.0: Transform Your Giving and Our World.

They are a new twist on an old concept, says Lucy Bernholz, a visiting scholar at Stanford University's Center on Philanthropy and Civil Society.

And how long has that idea of banding together for a social good been around?

"Probably as long as people have been around, as long as there has been money," Bernholz says. "The roots are much more in mutual aid societies and cemetery societies where a community of people would get together and chip in money."

Nowadays, giving circles target a wide range of issues, including education, the arts, and economic development. Members are just as diverse in their age, background, and income level, says Bernholz, who writes the blog Philanthropy 2173 (the name refers to the year in which Woody Allen's movie Sleeper is set - Bernholz is making the point that giving is a long-term activity).

They also could be a citizenship stimulant. A 2009 report by the Forum of Regional Associations of Grantmakers and the University of Nebraska at Omaha School of Public Administration, "Impact of Giving Together," found that giving-circle members ended up more engaged in charity and in their community - though circles may attract that type of person.

The Asian Mosaic Fund began in 2009, says Mailee Walker, 37, one of the founding members. Even though there were groups at the time for Asian professionals, when it came to philanthropy, "many of us felt invisible," says Walker, of Ardmore.

Its founders wanted to spread out their charitable support by addressing needs in the region's Asian community and developing local Asian philanthropic leaders.

Like other giving circles, members decided the contributions required and the grant-making process.

To be able to vote on which applicants should get grants, a member has to give at least $250 a year. That amount was deemed affordable, yet large enough to make the giver take an interest in how it would be used.

"The giving process would be a lot more thoughtful," says Roxborough resident Gollapalli, 39.

Some groups use all the money they collect for a single grant. That's the policy of Women for Social Innovation, which gave one grant last year for $15,000 to a program that helps mothers teach their preteen and teen daughters to make good life decisions.

"We felt that was a substantial amount of money that would allow someone to realize a dream," said Andrea Anania, 59, of Bryn Mawr, who helped start that giving circle about four years ago. Its members include lawyers and foundation executives.

For Philadelphia's chapter of the national giving circle Impact100, the idea "is for at least 100 women to donate $1,000 each and pool their contributions to make very large grants to nonprofit organizations," says Ellan Bernstein, 53, copresident of the local circle. Last year, the group gave a $100,000 grant to the West Philadelphia Alliance for a project that revives school libraries.

The Asian Mosaic Fund takes a different approach, giving several, smaller grants to aid more groups. Last year it gave grants of about $5,100 to five organizations.

One of the 2010 grantees was the nonprofit Asian Arts Initiative in Philadelphia, which used its $5,750 from the fund to expand its Youth Arts Workshop, including holding a program at the Philadelphia School District's South Philadelphia High School, which was the site of widely publicized violence between Asian and African American students in 2009.

"We saw a way to help bring kids together," said Pat Ma, the arts initiative's associate director.

The grant also helped finance a mural project at the Chinese Christian Church & Center in Chinatown. That's the kind of ripple effect that giving-circle members love.

Because they are small operations, giving circles usually disburse their money through community foundations or a larger, parent nonprofit group. The Mosaic Fund uses the Philadelphia Foundation to administer and monitor its grants.

Out of about 1,000 funds established by others through the Philadelphia Foundation, only a handful are giving circles, says president R. Andrew Swinney.

He likes how the circles ease people into the world of giving when they are in "the accumulation-of-wealth stage and don't have a lot of disposable income."

Tough money times probably won't be a problem for giving circles, Bernholz says. "Everything about them argues that people would be attracted to them as much in a down economy as in an up economy."