Giving Back Through Giving Circles

A few years ago, a group of urban residents found themselves in a faltering city. Crime, unemployment, failing schools and vacant lots had turned Cleveland into a place thousands of people decided was best seen through the rearview mirror. But rather than ditch their hometown, these friends decided to make it better.

They formed a giving circle, one of 400 or more around the country that pool money and donate time to nurture neighborhoods and support local causes. Such circles generated nearly $100 million between 2002 and 2006, according to surveys by the Forum of Regional Associations of Grantmakers. Because many circles fly under the radar, the actual amount is probably far higher.

Why form a giving circle when you can dole alone? "I could write a check to the Cleveland Foundation and they would do all the work, but then I'd be so distant from it," says Walter Wright, a founder of the Cleveland circle, which calls itself the Cleveland Colectivo. By giving money directly to causes close to home, Wright says, "we have an understanding of what's going on in the community and can build relationships."

Giving circles are spontaneous. Wright started the wheels rolling on the Cleveland Colectivo (loosely taken from the Spanish word for a bus on which passengers share the fare) with a casual suggestion to friends. "I sent out an e-mail saying 'Why don't we throw out some money and find something to get behind -- let's just do it.' " That's the impulse that sparks most circles, according to More Giving Together, a report by the Forum.

In the Colectivo's case, "we wanted to make a difference at a grass-roots level, to plant seeds that will later blossom into real change," says Lee Chilcote, a founding member. So far, the group -- now 25 strong, with another ten volunteers -- has contributed a total of $21,000 to ten projects, including parenting classes at a refugee center, an art program for juvenile offenders and a program to strengthen father-son ties in the Latino and African-American communities.

There are no rights and wrongs in forming a circle. Like most clubs, giving circles consider socializing to be part of the program. "Members talk about their lives, connect on a personal level, then talk about the community and what its needs are," says Daria Teutonico, of New Ventures in Philanthropy, an arm of the Forum. Most groups meet in someone's living room or gather at a local restaurant.

Sooner or later, though, even the gabbers have to get down to business. "What's so appealing about circles is that there's no right or wrong way to do them," says Buffy Beaudoin-Schwartz, of the Association of Baltimore Area Grantmakers. Small circles, including the Colectivo, often expect members to take turns or share chores, such as running the meetings, bringing food to activities and soliciting grant applications. Large groups -- say, 80 or more members -- find it more practical to have a president, who leads a board and runs the meetings, as well as committees that research grants and make recommendations.

Washington Womenade, a Washington, D.C., circle that has inspired others around the country, limits its planning to a few potluck events a year. Members invite friends and colleagues to bring a dish and a $35 donation to a party, held at a member's home. The group uses the proceeds to help needy people in the D.C. area pay their bills.

Giving circles support local issues and groups. The choices are plentiful, but most circles stick to local issues or those important to a particular ethnic group or interest. For instance, the Latino Giving Circle, in Chicago, sponsors projects that provide services to the local Latino community, whereas the Natan circle, in New York City, addresses Jewish interests.

Circles also try to help groups that traditional philanthropies overlook -- say, small nonprofits for whom a few thousand dollars represents big bucks and those that are "high-risk or entrepreneurial," according to a report on giving circles by Angela Eikenberry, an assistant professor at Virginia Tech. Some give money directly to individuals, although that precludes claiming a tax deduction on contributions.

One of the Colectivo's first grants literally went toward planting seeds for a better Cleveland. The circle contributed $750 to the owner of Lucky's Café, in the up-and-coming Tremont neighborhood, to help her put in a garden in a vacant lot next door. Now, both café and garden serve as neighborhood showpieces. Teens grow veggies there under the aegis of City Fresh, an initiative that promotes local farming, and Lucky's uses the produce to turn out chic dishes, such as ratatouille on cheddar polenta. Says Heather Haviland, the chef and owner, "You can't get much more local than taking it and cooking it right at that moment."