Collective Giving: Democratizing Philanthropy Through Collaborative Funding

What’s In It for the Donors?

These essential qualities seem to be the key to collective giving’s appeal:

• Hands-on giving. Donors have the chance to be directly and personally involved with applicants, and to learn exactly what the donation will fund.
• Fulfilling work. Perhaps the biggest draw to collective giving is its power to leverage each individual’s contribution into something more meaningful and effective.
• Democratic structure. Members typically have an equal say in decision-making; their collective votes determine the funding recipients.
• Social component. Individual donors with shared interests meet and learn from one another through their grant-making activities.

Together, collective giving organizations are enriching the regional philanthropic landscape, dispelling the notion that giving requires enormous individual wealth and underscoring the fact that women have funds—earned, inherited, and shared with spouses and partners—that they want to invest in their communities. Women now control 83 percent of household expenditures and 50 percent of personal wealth, according to Donna P. Hall, president of the Women Donors Network (Spector 2010).

As mentioned above, many of the collective giving groups in Philadelphia are women’s groups. This collaborative funding model appeals particularly to women, as evidenced by national trends as well. One of the first major giving circles, the Washington Women’s Foundation in Seattle, launched nationally in 1995. Leaders of the WWF also founded the Women’s Collective Giving Network, a national consortium of 29 giving circles that convene for a monthly conference call and an annual conference to discuss challenges and share best practices. WCGN donates $7 million annually (Women’s Collective Giving Network 2012).

In Philadelphia, Women of Vision was founded in 1994, and has donated nearly $560,000 to nonprofits here and in Israel, said Susan Lundy, endowment officer. Explaining their success, Lundy said, “Women understand philanthropy and what it means. . . they like to be hands-on in their giving and they find creative ways to allocate their dollars.”

Many local leaders said that as giving circles continue to democratize philanthropy, the word “philanthropy” itself becomes less intimidating, and less often associated with millionaires and well-endowed foundations. “It doubles, triples, quadruples what any individual can do,” said Debra Kahn, executive director of the Delaware Valley Grantmakers, allowing ordinary people to call themselves something they never would have considered previously: philanthropists.

What’s In It for the Nonprofit Applicants?

David Florig had only vaguely heard of giving circles in 2011 when the West Philadelphia Alliance for Children (WePAC) applied to Impact100 Philadelphia, which pools $1,000 gifts from at least 100 women to make $100,000 grants to lesser-known organizations. But winning that $100,000 grant was a “game-changer” for WePAC, said Florig, WePAC’s executive director. He had an audience of nearly 150 women at the Impact100 annual meeting where members voted to award grant funding. To have that many donors—and potential volunteers—all in one room was unheard of. “It’s a great way to connect with people outside our normal circle,” Florig said.

A year earlier, Jessica Franzini received the Impact100 grant for New Jersey Tree Foundation. “It was an extraordinary process that I’ve never seen anywhere else,” she said. “Even if we hadn’t received the grant, we were able to tell our story to lots of people, and I had the chance to learn about other nonprofits and make connections with them too.” Reflecting on the trend in collective giving, Franzini said, “It’s such a win-win. Donors are getting to impact an organization much more than they would on their own, and the organization is getting the chance to apply on a level playing field, and connect with individuals. It’s very grassroots and people-oriented, as opposed to traditional giving.”

Philly Stake deliberately set out to “turn the traditional granting process on its head,” said Kate Strathmann, a member of the organizing team. Applicants to Philly Stake respond to four questions, with answers of up to 100 words each, describing a project focused on creative engagement. Ten organizations are selected to present at a dinner event to an audience of 150 to 300 people. Diners, after paying a modest amount to cover the food and donation, vote to determine which organizations will receive funding. “Our process is very transparent,” Strathmann said. “The atmosphere is really supportive of whoever wins—it’s very celebratory. And it’s so cool to see how many great things are happening in Philly.”

The globalislocal Fund focuses on projects that address poverty in countries around the world, through grants for farming, water sources, and other improvements. Nearly all donors are based in Philadelphia, but all funding is awarded outside the United States. Potential grant recipients are selected in advance and travel to Philadelphia to speak directly to globalislocal donors at luncheon events throughout the year. “I think they appreciate the laid-back, intimate style,” said member Rhonda Mordy. “They get to know us and we get to know them.”

A Strong Trend, Continuing to Grow

Inspired by the success of the Asian Mosaic Fund, Carlos Cartagena, a long-time community activist who works in Philadelphia’s nonprofit community, is creating a Latino giving circle. He believes such a model is the key to boosting giving by Latinos (which is about 3 percent of U.S. philanthropic dollars donated annually, he said). His objective: Raise needed funds, but also give the Latino community a greater voice in how those funds are spent in their communities. Another group, launched in December 2011 by 35 Jewish families in the Philadelphia suburbs, is the Acharai Fund, which will award its first funding ($180,000) in September 2012 for projects in Israel.

New collective giving groups have often come to fruition with the support of existing foundations or groups. They tend to be collaborative not only within their organizations, but also across organizations doing similar work. Philly Stake, for example, is part of “a network of over 60 sister projects around the world,” said Strathmann. Women of Vision, part of the Jewish Women’s Foundation of Greater Philadelphia, recently joined in a collaborative donation with 14 other U.S. and Israeli organizations. Impact100 Philadelphia was closely modeled after the first Impact100 in Cincinnati; nationally, at least 15 current organizations, all independent but collaborative, have donated nearly $19 million over the last decade.

The collective giving trend has similarities to another recent movement, “crowdfunding.” An offshoot of crowdsourcing, which broadcasts a problem widely and seeks solutions from the public, crowdfunding broadcasts a need and seeks funding widely from people who might want to address the need, either online or through live events. Rapid communication and easy donation processing are the focus of websites such as Kickstarter, which has taken $250 million in pledges in three years of operations. Another effort making philanthropy more affordable is micro granting, where small grants are paired directly with a community program seeking initial startup funding or money for a critical project.

Conclusion

Democratic decision-making is one of the hallmarks of giving circles. This aspect means a member may feel passionately about projects that ultimately do not win the full support of the group. Yet this is not a deterrent to staying involved. “So often in life you find that people have their own agendas, but I didn’t find that at all in this. It wasn’t political; everyone was respectful. There was a common cause and everyone was trying to see where we could make a difference,” said Impact100 member Barbara Matteucci.

Matteucci continued, “We can see what we’re doing, very tangibly. It encourages someone like me to give even more, because I actually play a role in it. I can go see and appreciate what our contribution is doing. It makes me feel good that I’m involved.”

The Village of Arts and Humanities in North Philadelphia is one such beneficiary of this new breed of philanthropy. Its youth arts magazine, CRED, won a $100,000 grant from Impact100 in June. About winning, executive director Elizabeth Grimaldi said, “The grant differs from others in that I find it far more personal. . . and the potential beyond the direct funds is tremendous. We've been blown away by the number of women who have reached out just to learn more, or who have visited since the presentation.”

It may be too early to gauge the long-term impact of giving circles and other forms of collective giving. Will the trend continue? Will giving circles maintain and even grow in membership? No matter what the future holds, the growth of collective giving, especially over the past five years, has changed the landscape of funding in Philadelphia. More people now participate in grant-making, and in doing so, they see first-hand the tough challenges facing their communities and the work nonprofits are doing to tackle them.

Beth Burrell is a freelance journalist who began her career as a daily newspaper reporter covering local government and environmental issues, before leaving the field to earn a master’s degree in education from the University of Pennsylvania. She was a founding board member of Impact100 Philadelphia, serving for three years as communications chair. She is a long-time reading tutor in the West Philadelphia public schools for the West Philadelphia Alliance for Children (WePAC), and works part-time for the communications office at Friends’ Central School in Wynnewood, helping to produce weekly e-newsletters. She lives in Merion with her husband and three children.

Mary Broach’s career began in investment banking before shifting to nonprofit fundraising and management, and more recently to consulting. She serves as the board president of Tabitha USA, a nonprofit that supports community development work serving the poorest regions of Cambodia. In 2008, she co-founded Impact100 Philadelphia, and has served as co-president and communications chair. Together with Impact100 co-founder Beth Dahle, she was awarded PathwaysPA’s Trailblazer Award in 2009 and was named New Generation Philanthropist of the Year in 2010 by the Association of Fundraising Professionals Greater Philadelphia Chapter. She lives in Wynnewood with her husband and three daughters.

References

Eikenberry, A. M., and J. Bearman. (2009, May). The Impact of Giving Together: Giving Circles’ Influence on Members’ Philanthropic and Civic Behaviors, Knowledge and Attitudes. Forum of Regional Associations of Grantmakers, the Center on Philanthropy at Indiana University, and the University of Nebraska, Omaha. Available at www.philanthropy.iupui.edu/files/research/2009givingcircles_fullreport.pdf

Krotz, J. L. (2009, May). Making Philanthropy Count: How Women Are Changing the World. Women’s Philanthropy Institute at the Center on Philanthropy at Indiana University. Available at www.philanthropy.iupui.edu/files/file/making_philanthropy_count.pdf.

Spector, A. (2010, November). Women as Philanthropists: Who Were We, and Who Are We Becoming? Donna Hall Offers Her Perspective. Impact100 Philadelphia. Available at www.impact100philly.org/images/Impact100DonnaHallPresentation.pdf.

Women’s Collective Giving Network. (2012, April). Report to Members.