How to give away $500,000

Through the growing trend of giving circles, the collective power of small donations can make a big difference. Just ask some of the women pouring money into groups across the country.

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By Ann Monroe, MSN Money

When Paige Cottingham-Streater joined the African-American Women's Giving Circle in the Washington, D.C., area, she expected to donate money and make contacts with other women. What she didn't expect was that she'd also make a lot of really good friends.

"I knew that I would enjoy working with the group of women who had been invited to the dinner I went to initially," Cottingham-Streater says. "But I didn't realize how much I would enjoy seeing them on a regular basis and the fellowship that we share at the meetings."

Hear from three women in a circle

Giving circles -- groups of not necessarily wealthy people who pool their money to make substantial contributions to charities they care about -- are a hot trend in the world of philanthropy.

"More Giving Together," a report published last year by the Forum of Regional Associations of Grantmakers, identified 400 circles in the U.S., up from 200 in 2005. Collectively, they have given away almost $100 million in the past four years.

The report's author, Jessica Bearman, says there are probably many more giving circles than those identified in the study.

About half of all reported giving circles are women-only. Several are limited to African-American women. At least one, Girls Giving Grants in Texas, is made up of high school students. It's a spinoff of the 500-adult-member Impact Austin giving circle. The girls in the circle contribute $100 each and make their own decisions about where the money should go.

What makes giving circles so popular, especially among women?

It's the notion of giving collectively, says Colleen Willoughby, the founder of the Washington Women's Foundation giving circle in Seattle. Her appearance in People magazine in 1998 inspired many women to start their own circles, earning her the unofficial title of "the grandmother of giving circles."

"We have changed the paradigm from philanthropy being something only wealthy people do," Willoughby says, "especially wealthy old men."

'The grandmother of giving circles'

Talking to members of giving circles, the sense of empowerment is palpable.

"It's one thing to give away $1,000 a year," says Sondra Shaw-Hardy, the founder of the Three Generations Circle of Women Givers, based in Michigan. "It's another to see it translated into $65,000 -- and to see the impact."

Giving circles come in all shapes and sizes, but they share two basic principles: Members pool their money and then decide as a group where it will go.

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It's the ability to choose that distinguishes giving circles from the donor circles established by many nonprofits. Some giving circles focus on a particular charity, and then decide which of that charity's activities to fund. But most give to many different organizations. Giving circles also tend to be more adventurous in their giving than traditional philanthropists, according to Bearman's report, often funding small, relatively new charities that have a hard time raising money elsewhere.

However, the tug of war over where that money should go is also an essential part of a giving circle. And it's viewed as a strength, not a weakness.

Most giving circles make teaching members how to give away money an essential part of their mission. Women participating in Willoughby's foundation, for example, take a six-month grant-making course that covers topics such as how to read fund reports, make site visits to potential grantees and conduct interviews.

Why are so many of these giving circles all-women?

Articulating the answer is not always easy, and opinions differ. Women have a strong desire to work with other women, Shaw-Hardy says, pointing to women's relief societies that go back to the 18th century. The women in Bearman's Idaho giving circle said they had decided to make it an all-women's group because they felt that "if men were here it would change the dynamic," she says.

The format also suits many women. Many circles meet over a meal. Some make food and drink a core part of their mission. The Wine Ladies of Oshkosh, Wis., started meeting over a glass of wine during their husbands' golf outings and are now collecting money to help women and children. Dining for Women, which has chapters in more than 30 states (plus Australia and Italy), collects funds at potluck suppers and donates them to international charities.

Giving-circle members also often get directly involved with the organizations they fund. Indeed, that's one of the main goals of Social Venture Partners, headquartered in Seattle and founded by former tech-industry employees, which now has more than 20 chapters.

"We've built the organization to try to give not just financial capital but human capital," says Paul Shoemaker, the executive director. "Once we make a grant, we sit down and roll up our sleeves and say, 'What do you need besides money?'"

One way to find a giving circle near you is through the Giving Circle Network, which lists more than 230 circles around the country on its Web site. The Forum of Regional Associations of Grantmakers also has a list of about 400 giving circles. You can also search the Internet for "giving circle" plus the name of your city or region.

If you can't find a circle near you that seems to meet

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your needs, why not think about starting one?

Almost every giving circle started with a single person who invited friends and friends of friends to join in. Many founders had experience in philanthropy, but that's not a prerequisite.

How much they give away

Take Rebecca Powers. Almost six years ago, Powers was on an airplane, coming home from what she knew was her last visit to her dying brother, when she picked up a magazine with a story about Impact 100, a giving circle in Cincinnati.

"I knew," she says, "that I could find 100 women in Austin who could give $1,000, and we could give it to a nonprofit, and I would feel better."

Powers hadn't been actively involved in philanthropy before.

"This wasn't something I had ever aspired to do," she says. "But I thought it would heal the hole in my heart."

Today Impact Austin has 510 members. Last year the giving circle gave away $510,000 to the community, and, says Powers, "it has changed my life for good."

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Produced by Peggy Collins

Published Nov. 28, 2008