The Power of Giving Circles: How Everyday Donors Create Extraordinary Impact

An Old Tradition With New Momentum

Collective giving is not new. Communities around the world have pooled money and other resources for generations, from sou-sous in West Africa to tandas in Mexico and gehs in Korea. These traditions are rooted in mutual aid: people supporting one another and investing in the well-being of their communities.

The modern U.S. giving-circle movement began gaining momentum in the 1990s. The Washington Women’s Foundation was created in 1995 by five women who believed they could accomplish more collectively than individually. In 2001, entrepreneur Wendy Steele founded Impact100 in Cincinnati, inviting 100 women to each contribute $1,000 and collectively award a transformational $100,000 grant to a local nonprofit. The model has since expanded to communities around the world.

Technology, community foundations and national networks have made giving circles easier to launch and manage. What was once an informal gathering around a dining-room table can now be a neighborhood group, an employee initiative, a virtual community or a national movement united around a shared cause or identity.

The Current Footprint of Giving Circles in the U.S.

Giving circles have become one of the fastest-growing forms of philanthropy in the country.

The latest comprehensive national study, In Abundance: An Analysis of the Thriving Landscape of Collective Giving in the U.S., found that between 2017 and 2023:

• Nearly 4,000 collective giving groups were active across the United States.
• Approximately 370,000 people participated.
• Together, they donated more than $3.1 billion.

That represents more than 140% growth in both participation and total dollars donated compared with the previous national study. Researchers also project that the movement could double again within five years.

Women continue to be the driving force behind this growth. In the 2023 research, 84% of groups reported that more than half of their members were women, and 60% were composed entirely of women.

Giving circles are also becoming more diverse. Among people who joined a circle from 2020 through 2023, 27% identified as people of color, up from 17% among those who joined from 2016 through 2019.

Why Giving Circles Make Such a Difference

They direct resources to community-based organizations

Giving circles tend to stay close to home. The national research found that 70% kept their funding within their home state, while nearly half made grants within the same city, town or county.

They also help donors discover smaller nonprofits that may not have large fundraising teams or national name recognition. Fifty-five percent of circles reported supporting organizations with annual budgets below $1 million, and 83% prioritized organizations serving marginalized communities.

They make philanthropy more accessible

The word “philanthropist” often brings to mind someone with a private foundation and millions of dollars to give. Giving circles replace that image with something more inclusive: people contributing what they can and making thoughtful decisions together.

A circle can be built around $25 monthly contributions or $1,000 annual commitments. The power comes from participation and consistency, not from any one person’s wealth.

They contribute more than money

Giving-circle members often share what researchers call the “5Ts”: time, talent, treasure, testimony and ties. They may volunteer, provide professional expertise, introduce nonprofit leaders to helpful contacts or use their voices to bring attention to a cause.

The relationship becomes more meaningful than a one-time transaction. It becomes a community of people invested in helping an organization succeed.

They strengthen belonging and civic engagement

Giving circles also changes the people who participate in them. In the national study, 91% of members said participation strengthened their sense of belonging, 77% felt a greater belief that their voice mattered on social issues and 59% said they became stronger advocates for causes important to them.

This may be the most important impact of all. Giving circles create a space where generosity, education, relationships and action come together.

How to Start a Giving Circle

You do not need a large group, a complicated structure or your own nonprofit organization. Start simply and allow the circle to evolve.

1. Invite a small founding group

Begin with five to ten people who are curious, dependable and willing to learn together. They might be friends, coworkers, neighbors, clients or members of an existing community.

2. Choose a shared purpose

Decide what connects the group. Your circle might support women and girls, youth entrepreneurship, animal welfare, environmental justice, the arts or nonprofits in a specific neighborhood. Keep the initial focus clear enough to guide decisions without making it so narrow that few organizations qualify.

3. Set an accessible contribution

Agree on how much and how often members will give. Consider offering multiple contribution levels so more people can participate while every member retains an equal voice.

For example, ten people contributing $50 a month could award a $3,000 grant after six months. That is a meaningful gift for many grassroots organizations.

4. Decide how the money will be managed

Some circles partner with a community foundation or fiscal sponsor. Others use a collective-giving platform or have members donate directly to the selected nonprofit. If members want tax-deductible contributions, use a qualified charitable organization or an appropriate sponsoring platform to receive and distribute the funds.

5. Create a simple, transparent selection process

Decide how nonprofits will be nominated, evaluated and selected. Members may vote, reach consensus or rotate the final decision. Agree on the process before discussing specific organizations so everyone understands how choices will be made.

Avoid placing an unnecessary burden on small nonprofits. Public information, a short conversation and a brief presentation may provide everything the group needs to make an informed decision.

6. Listen and learn

Invite nonprofit leaders or people with lived experience to explain the issue, what is already working and where support is most needed. Approach the process with curiosity rather than assuming the group already knows the best solution.

Whenever possible, consider unrestricted funding. The national study found that 72% of collective giving groups provided general operating support, giving nonprofit leaders the flexibility to direct resources where they are needed most.

7. Give, celebrate and stay connected

Make the grant, share the story and celebrate the collective impact. Then ask the nonprofit how the group can remain helpful without creating more work. That may mean volunteering, opening doors, sharing the organization’s message or simply trusting its leaders to do what they do best.

After the first giving cycle, review what worked and what should change. A giving circle does not need to be perfect before it begins. It needs a shared purpose, a fair process and people willing to take the first step.

Your Invitation to Begin

National Nonprofit Day is an opportunity to recognize the people who strengthen our communities every day. It can also be a catalyst to become more intentional about how we support them.

You do not need a foundation or a seven-figure bank account to be a philanthropist. You need a cause you care about, a few people willing to join you and the belief that small contributions can become powerful when combined.

Invite five people to a conversation. Choose a cause. Decide what each person can contribute. Learn from the people closest to the work. Then make your first grant together.

That is how a circle begins and how generosity grows.