With 'giving circles,' anyone can be a philanthropist

Courtesy of Maureen Romito When Las Vegas resident Maureen Romito was nearing retirement, she knew she wanted to give more money to good causes. But there were two problems. First, she was not wealthy: “I couldn’t become who I think of as a typical philanthropist in the United States–someone with the last name of Gates or Buffett or Musk, somebody that makes a lot of money.” Second, it was hard to know who to give to. “There were so many different causes, so much need out there,” she says. “If I give $25 to one group, and $50 to another, what difference am I making?” Then she discovered giving circles: groups where members pool their donations and decide together where to allocate them, Reasons to be Cheerful reports. In 2012, inspired by similar efforts in Austin, Texas, Romito set up Impact Las Vegas, a giving circle for women who want to help their community. Members donate a minimum of $1,000 each year, which is pooled into one large grant. Local nonprofits apply, and members whittle them down to one lucky recipient. Last year, having grown to more than 100 members, Impact Las Vegas gave $113,000 to a nonprofit providing school supplies to children in need.  Giving in this way addresses several concerns. The impact of Romito’s relatively small gift is multiplied, creating one large grant that can be “transformative” for the recipient. As a donor, she gets to hear about the difference it made, which is not usually possible with much smaller gifts. And choosing an area of focus draws on the combined knowledge and experience of the group. “That’s the wonderful thing–it’s really based on the need we see in our own community, and it changes every year,” she says. As Old as Humanity Giving circles are widespread–and growing. Between 2017 and 2023, Philanthropy Together, a U.S. nonprofit that supports this movement, identified nearly 4,000 collective giving groups in the U.S., involving 370,000 people giving more than $3.1 billion. It expects this to double within the next five years. While the modern American giving circle rose to prominence in the past few decades, the underlying concept is “as old as humanity,” says Ilyasah N. Shabazz, who leads operations and communications at Philanthropy Together. There are long traditions of mutual aid and solidarity among marginalized communities, and giving together occurs in many cultures–from tandas in Mexico to gehs in Korea and sou sous in West African countries. “They have a different name, but it’s the same core principle of collective giving and collective generosity,” says Shabazz. Today’s giving circles vary widely. Some involve groups of friends; others are more formalized, with hundreds of members. Some focus on a locality; others are united by identity, such as the group of Black philanthropists supporting Black-led nonprofits, of which Shabazz is a member. Some require significant outlay, but many set the bar much lower–like the Cornwall Women’s Fund in the U.K., whose members need only commit to £10 per month.  What they all do is challenge conventional notions of what it means to be a philanthropist.  “When we talk about philanthropy, we think of the big tech billionaire–that kind of world,” says Emma Beeston, a U.K.-based philanthropy advisor who set up a giving circle in her hometown, the Bath Women’s Fund. “I think the joy of giving circles is they counter that: It’s not just one person saving the planet, it’s actually in our communities. How do we come together to make things better? How do we do that with relatively modest sums that lots of people have access to?” Giving circles may also offer safety in numbers, Beeston says–because getting into philanthropy can attract scrutiny and even criticism. And they remove the need to be an expert in any particular area, since members commit to learning together. Indeed, many of those joining giving circles are new to philanthropy. With generosity apparently declining in both the U.S. and the U.K., encouraging these newcomers may be more important than ever.  Neglected Causes The LA Latino Giving Circle invests in grassroots, Latino-led organizations in Los Angeles that address racial disparities and inequality. Among its members is 33-year-old Steven Almazan, whose parents immigrated from Mexico, and whose own education was supported by Latino professionals. “This is my way of giving back,” he says.  Anyone able to donate $1,000 annually can join, and much of Almazan’s work in encouraging new members involves “demystifying” the concept of philanthropy. “We want to be clear that anyone can be considered a philanthropist, no matter their wealth,” he explains. “This is philanthropy for the people, by the people, and there’s something beautiful about that.” That approach also influences who gets funded. Less than 1% of U.S. philanthropic money goes to Latino communities, Almazan points out. “So, we’ve developed this mantra: if traditional dollars are not going to Latino communities, then philanthropists like ourselves, from our community, are going to invest in Latino communities.” Last year, the group gave nearly $40,000 to Somos Familia Valle, an LGBTQ+ organization working on racial, gender, and economic justice. The focus on causes overlooked by mainstream philanthropy is common among giving circles, according to research in 2023 by Philanthropy Together and others. Possibly connected to this, giving circles are particularly popular among demographics less represented in billionaire giving: 60% of the groups it studied were made up entirely of women, with donors of color making up a “substantial” proportion. Schools of Democracy The benefits of giving circles go beyond hard cash: Members might offer time or expertise, too. The LA Latino Giving Circle also encourages civic engagement, for example, by facilitating discussions between its members and local policymakers. Even discussions within groups may have wider benefits. Deciding which causes matter most is often tied to personal values, and there is rarely one right answer. Such decisions need to be made collectively–whether by consensus or majority vote–meaning giving circles are “schools of democracy,” according to Philanthropy Together. Shabazz says this is good both for “personal growth” and for wider society: “We’re participating in a democratic process and flexing those skills.”  Other benefits cited by givers are the sense of belonging and community, as well as the chance to grow one’s professional network. They may also feel a stronger sense of agency. In one study of Latino giving circles, 68% of members said they felt more confident about being able to change their community, and around three-quarters realized their voice mattered on social issues. Challenges Modern giving circles are not just popular in the U.S. China has seen momentum in the past decade. Singapore and Germany are also worth watching, Shabazz says. But the concept remains relatively unknown. A 2018 study identified just 65 giving circles in all of Europe; U.K. circles are still quite rare. Nor are they always easy to run–not least because they rely heavily on volunteer time. It can be harder to attract members where people feel less connected to the place: Las Vegas, for instance, is a very transient city, says Romito.  And even though they’re seen as more democratic than top-down models of philanthropy, giving circles aren’t perfect. Women-only groups seem to prioritize certain causes, such as children’s rights or health care, Romito notes, meaning things like culture or the environment get much less attention. Nor are they immune to criticism. One giving circle recently faced backlash for what nonprofits described as an onerous and stressful application process that only resulted in one winner. (Shabazz says that Philanthropy Together encourages giving circles to consider equity and justice throughout their processes.) For their biggest fans, the challenges are well worth it. Romito, now aged 70, describes the experience as “probably one of the most rewarding things I’ve ever done.” That’s partly because she has been able to put her skills gleaned from a career in HR to good use, working on processes and organizational development.  But above all, she feels she is contributing in a meaningful way. “It makes me feel so grateful that I have this way of making a difference in my community, when I don’t have a ton of money,” she says. “I do feel now like I may be related to Bill Gates or Warren Buffet. That’s just as good.” Disclosure: The writer is a former student of Emma Beeston, who is also a lecturer in philanthropy. This story was produced by Reasons to be Cheerful and reviewed and distributed by Stacker.