July 02, 2014

Giving Circles Popular With Minorities and Younger Donors, Says Study

Groups of people who pool their donations and select beneficiaries together—known as giving circles—have become an attractive channel of philanthropy for women, minorities, and donors under 40, according to a new report.

Drawn from two national surveys of American households, the data show that Americans of African, Asian, and Hispanic descent participate in giving circles at much higher rates than whites: 21 percent for blacks versus 10 percent for white non-Jewish donors, for example.

Other findings:

  • Over all, one in eight donors makes a contribution through a giving circle.
  • Nearly 40 percent of all giving-circle donors are under 40. But 64 percent of minority participants are that young, as are just 38 percent of non-Jewish whites.
  • Among non-Jewish whites, women make up two-thirds of all giving-circle donors. But men predominate among participants who are minorities (53 percent) or Jewish (58 percent).
  • More than 80 percent of both non-Jewish whites and minorities who participate in giving circles also belong to a religious congregation. However, only 53 percent of Jews who participate in giving circles belong to a synagogue.

The report was prepared by Jumpstart Labs, a philanthropic research group, in conjunction with foundations and Jewish federations. It is the fifth in a series of reports under the Connected to Give banner, based on surveys conducted as part of the National Study of American Jewish Giving and the National Study of American Religious Giving, which together included nearly 4,900 households.

Giving circles provide an entry point for donors with lower income levels and a desire to become involved in charity work, says Shawn Landres, chief executive at Jumpstart Labs.

"It doesn’t surprise me that minority groups participate in giving circles at higher rates because of the effect that giving circles have in focusing and amplifying the effect of their giving," Mr. Landres says. "It’s a way to express your identity as a member of the community and to leverage your capacity to make a difference."

According to Mr. Landres, the survey results produced in the Connected to Give report should direct nonprofits to examine giving circles to uncover donor trends and find paths to engage partners and potential board members.