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Share the Wealth: Giving Circles

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Starting a Circle

Put your passion into action. Invite a small group of friends, coworkers, and neighbors who share your desire to better the world and hold a brainstorming session. You'll have several key decisions to make.

  • What's your giving circle's mission? Will you focus locally -- where you can see up close the impact of your donations -- on individuals or a neighborhood institution, like a school or hospital? Or do you want to pay it forward by giving your money to a larger, better-established nonprofit organization that helps people throughout the country or internationally?
  • What will you call your giving circle? Where will you meet and how often? What will be the responsibilities of each of the members?
  • How much will members be required to contribute and will everyone have to donate the same amount?

"It's important to answer these questions at the very beginning and set some parameters," says Teutonico. "Otherwise things can easily become too overwhelming later on."

Get size wise. At your second meeting, discuss how large your giving circle will be. "With a small group you really keep that personal connection with one another -- and with the people you're helping," explains Teutonico. "Larger groups have the benefit of being able to raise a lot more money, but they also require more structure, and you may need to hire an administrator or get outside help. Choosing beneficiaries is also more complicated and usually involves appointing committees, soliciting grant proposals, and wading through a long list of applicants." Some people who have had experience setting up giving circles say that 35 to 40 members is ideal -- large enough for your charity dollars to pack a punch but small enough that members stay actively engaged in the cause -- and with one another.

Manage your money. In some groups, members simply write personal checks and mail them to their chosen charity; in others money is deposited into a joint bank account and a single check is written to the beneficiary. Your giving circle could also partner with another group, such as an association of regional grant makers, that would act as an adviser and financial administrator. Eventually you may wish to set up your giving circle as a nonprofit organization, which would make all donations and administrative costs tax deductible.

Enjoy the rewards. Once your giving circle starts making donations, you'll be able to see your money in action. The Giving Circles of Hope, in Reston, Virginia, for example, has given more than $200,000 to local organizations that help low-income residents, the homeless, and the elderly. Giving Circles also sponsors an annual grantees party, where members can meet and mingle with the organizations and people they've helped during the year.