7 Reasons to Donate Through a Giving Circle

In tight times, joining forces with friends stretches your donated dollar further.

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If you want to leverage your charity dollars while simultaneously spending time with friends, then giving circles might be the answer for you. These social groups, where people jointly give money to organizations, have become increasingly popular over the last several years. According to www.givingcircles.org, there could be as many as 800 giving circles throughout the United States, compared to just half that number in 2006. They have been especially popular among women, perhaps because of the book club-like vibe.

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Here are 7 reasons why now might be the best time to start your own giving circle:

You can do better research. Many Hands Inc., a giving circle based in northwest Washington, DC, chooses its funding recipients based on phone interviews, site visits, and then a vote of all 100-plus members, explains board member Noni Lindahl. Over the last six years, the group has given away over $350,000 to local nonprofits that serve women and children. The money comes from each participant pledging $1,000 a year.

At the Northern Virginia-based Giving Circle of HOPE, members read books together to further educate themselves on poverty issues. After reading Three Cups of Tea, some of the members pooled their money to fund a teacher in a school in Pakistan for a year. "It's all about education," says the giving circle's co-founder Linda Strup.

You make a bigger impact. Many Hands' first $100,000 gift went to Our Place DC, which helps women after they get out of prison. The group's gift let the nonprofit open up an emergency shelter in nearby row-house for the women who needed it. "The impact is so much greater than what any one of us is able to do individually," says Lindahl. The group has also given grants to the Young Women's Project, a teen empowerment program, and Pediatric AIDS, which provides mental health services to children living with AIDS or those with parents who are HIV-positive.

Your dollar goes further. The Giving Circle of HOPE, which is over 100 members strong, has given out over $250,000 in the last five years by each member pledging to contribute $1 a day. It adds up to much more than any single member could likely do on her own.

You get to spend time with friends (and make new ones)."It's hard to go out and volunteer on a Saturday. You might not do it on your own, but with a group it's a lot of fund," says Strup. Her giving circle combines volunteer work along with their donations.

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Charities come to you. Because giving circles give out such sizable grants, many charities make the effort to reach out and further educate potential donors. They often send representatives to speak at the giving circle's meetings or invite members to participate in the charity's activities. At Many Hands' final meeting before the vote, the potential grant recipients give a presentation about their organization and explain what they would do with the money. (In one case, the giving circle raised an extra $30,000, an amount the runners-up split between them.)

You pool your resources. When Strup's giving circle built a reading room for a homeless shelter, members were able to draw on their collective resources to get the help of an architecture firm, former teacher, and volunteer who led the book drive to complete the project. "Each person brings a different talent," says Strup.

You can be as formal, or informal, as you want. Some giving circles, especially large ones, formally incorporate and become registered nonprofits so they can receive checks directly and then write a single check to the recipient. (Both Many Hands and Giving Circle of HOPE went this route.) But smaller groups of friends can avoid that paperwork by getting together to research and select charities and then simultaneously writing checks directly to that organization.