Posted on October 17, 2005

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'Giving Circles' Attract Donors With Hands-On Philanthropy

Instead of writing checks to individual charities, more donors are joining "giving circles," through which they pool their money and jointly decide where to invest their charitable dollars, the New York Times reports.

Pioneered in the late 1990s by a handful of high-tech entrepreneurs, the groups have mushroomed over the past five years, according to Washington, D.C.-based New Ventures in Philanthropy. Last February, New Ventures reported that at least 220 circles had been formed in forty states, with members donating as little as a dollar per day and up to $20,000 annually. Several big circles have given hundreds of thousands of dollars in a single year, and since 2000 the groups as a whole have donated more than $44 million.

Paul Brainerd, who started Social Venture Partners in 1997 with several former Microsoft employees, took his group beyond investing in nonprofits by assigning members to streamline recipients' accounting, marketing, management, and technology systems. Each SVP member donates $5,500 a year for two years and usually gets involved in other ways. "We're a giving circle on steroids," said Paul Shoemaker, executive director of SVP's 270-member Seattle branch, which has donated $7 million to environmental, educational, and children's charities and has also started Social Venture Kids to introduce children to philanthropy.

Other giving circles prefer to remain small. In 2003, Michael Steinberg and three other hedge fund managers started Natan to fund initiatives that support Jewish identity and promote economic development in Israel. They also wanted to create "a breeding ground for philanthropists." With only about fifty members, all under age 40, Natan expects to give away as much as $700,000 this year. "Doing philanthropy among peers makes it more fun and interesting," said Steinberg. "It gives us the confidence to take risks."

Shevory, Kristina. “When Charity Begins in a Circle of Friends.” New York Times 10/09/05.

Primary Subject: Philanthropy and Voluntarism
Location(s): National, United States

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