The Association for Fundraising Professionals (AFP) announced in March 2007 that a new study by Angela Eikenberry (February 2007) entitled "Giving Circles and Fundraising in the New Philanthropy Environment:  Final Report" has found that Giving Circles Provide Challenges and Opportunities for Fundraisers. 

Below are citations from the AFP press release summary of the study's top-level findings as well as suggestions for Giving Circles cited directly from the study.  We welcome your feedback and insight on both to further help enable Giving Circles to become more effective in their relationships with non-profit organizations and the fundraisers who work on their behalf. 

Opportunities:    "Many felt that giving-circle members were open, had a partnership mentality and were interested in learning about the recipient organization and its needs. Nearly all felt that the added value that the giving circle could bring to a relationship--visibility, a voice, appreciation, connections, volunteers, business and mentors, to name a few--could be instrumental for most organizations." (AFP press release, March 2007)

Challenges:  "Others, however, felt that giving circles were not always consistent about their expectations and what was expected in return for funding, and that giving circles were simply not reliable for sustained and long-term funding." (AFP press release, March 2007)

Lessons for Fundraisers:  The lessons (for non-profit organizations seeking funding from Giving Circles) are:

• "In almost every case involved in the study, the giving circle sought out the charity. In most instances, someone in the giving circle already knew about the organization (and sometimes knew someone at the charity) and proposed that the circle fund the charity. Therefore, if nonprofits want to attract giving circle funding, they most focus on networking, building awareness and public relations. Being able to give presentations and facility tours were cited by several participants, and two individuals interviewed were themselves members of giving circles.
• Because the giving-circle relationship is often new, fundraisers should expect to spend a significant amount of time on developing it. A fundraiser must be able to adjust quickly to a variety of different personalities within the giving circle. In addition, some participants described some giving-circle funding as "too directive," with members constantly wanting to get involved in different aspects of the charity.
• Several participants noted that for more formal giving circles sponsored or associated with a host foundation or other organization, there was often a mismatch between the host's priorities and application process and those of the giving circle. The philosophy of giving circles can sometimes clash with the already established board governance structure of their host organization, making it difficult for recipient organizations to navigate the funding process smoothly.
• It can be difficult to count on giving-circle funding from year to year, since a circle's priorities can change quickly depending upon membership and personalities."  (AFP press release, March 2007)

Suggestions for Giving Circles - Those interviewed by Eikenberry for the study had these suggestions for Giving Circles in enhancing the funding process with non-profit organizations:

- There is a "...need for a clear and transparent process that is as simple as possible".  The "...membership wants to feel involved..." and "...the [non-profit] groups want to feel like they are being treated fairly...", so "...the more transparent the process can be and the more criteria that can be set up to guide the giving and the more that can be said up front... the better it is for both parties." (Eikenberry, February 2007, Pg. 15)

- "It would also be helpful if the giving circle provided support that the nonprofit organization really needs (rather than what the giving circle members think they need). In other words, that the funding is driven by the need of the organization rather than funding that is donor-directed.  For instance, sometimes organizations might be in a stage where they do not need volunteers or have special projects that need to be funded. (Eikenberry, February 2007, Pg. 15)

- "[G]iving for general operating expenses is what is most needed."  One interviewee noted: "A lot of the times they [donors] really want to hear that the money is going for direct services. But be open to give us a break a little bit, to be open to operating, to understand how important it is to have the right people leading the organization and it takes money to pay for one." (Eikenberry, February 2007, Pg. 16) 

- "[T]ake a chance on backing new solutions..." because it "...doesn't have to be the way it's always been..." and so "...when you find solutions that are different paradigms and that work...back them with everything you've got. (Eikenberry, February 2007, Pg. 16)

 - "To this end, giving circle members should see their participation in the giving circle as a first step for their longer-term involvement in supporting organizations and causes they believe in." (Eikenberry, February 2007, Pg. 16)

Note to the reader:  Eikenberry conducted this study to determine the degree to which Giving Circles were impacting philanthropy and based the above on "..interviews with 30 individuals from across the country participating in or working with a giving circle, as well as data from news articles, websites, and other documentation."

We recommend you read the full report as it's full of other great tips and ideas.    Looking forward to your feedback!