When we invest in small, grassroots initiatives, we are investing in community leaders who truly understand the needs of those around them.

Yet despite the knowledge and understanding of community issues that grassroots leaders have, research shows that leaders of color, on average, have smaller organizational budgets and less access to financial support than white leaders. Overall, only 3.6% of nonprofit funding goes to organizations led by people of color, while 1.9% of funding goes toward women and girls causes and only .28% of funding goes to causes supporting the LGBTQIA2S+ community.

When viewed in the context of these trends, the strength of giving circles makes itself obvious: A circle’s efforts are often a direct answer to the lack of funding from “big philanthropy”.

Giving circles are filling in funding gaps. Julia Carboni and Angela Eikenberry beautifully wrote in their 2021 research study that “Identity is important to consider in relation to democratizing philanthropy because shared identity, whether conscious or not, often drives where or to whom people give.” Such is true with giving circles as 60% of circles are identity-based.

Because circles are often made up of members sharing a strong sense of identity, their giving is often shaped by the direct needs of their communities, needs they understand intrinsically because of those very identities that shape their circles.

But how do we know what underrepresented communities need — communities we are not a part of — when we can’t look back on our own experiences for context?

The principles of powerful philanthropy are a guide for giving circle members of all identities to ensure they’re doing their due diligence and supporting the organizations on the frontlines doing the work to make change happen:

• ​​Strong Leadership On Staff and Board That Mirrors The Community: Push for equity by looking for nonprofits led by and serving communities that are typically underfunded: Black, Indigenous, and people of color, people with disabilities, the LGBTQIA2S+ community. It’s important that nonprofit leadership is reflective of the community they’re serving. Look for organizations where 50 percent or more of leadership staff and board members identify with the communities they serve.
• Powerful Programs Connected To Their Mission: Funding creative, targeted initiatives needs to be a priority for every philanthropist looking to make a difference in their community. Open the conversation with your members: what are your shared values, and how can you ensure your grantee partners offer programs in alignment with those values? As you evaluate potential grantee partners, look at how their programs are designed — ask yourself, “Are these programs connected to the organization’s mission? Are they connected to my mission?”
• Close Connection With and Record Of Impact For The Community They Serve: Take the time to research and understand your partner organizations’ records of impact in the communities they serve. Don’t just base your opinion on the organization’s website: Look at news articles, talk with staff members, and dig in deep to their work. You’ll build deep relationships and see first-hand the work your partners are doing. This practice will make you a great advocate and resource for your partners — when you’ve experienced their work, you’ll be better equipped to help amplify their messaging and reach more people.
• Transparent and Clear Financials: Trust needs to be the priority. Unrestricted funding; simplified grant application and disbursement processes; and doing away with time-consuming self-reporting are all ways to extend trust to your grantee partners. When we trust our grantees to get the work done with our funds the way they see fit, organization leaders are able to make real-time decisions that impact the organization’s work on the ground. Meanwhile, our own circles need to practice the same transparency: soliciting (and acting on!) feedback from grantee partners; publicly sharing mission statements and ideal partner relationships; and communicating what potential partners can expect from YOU.

Giving circles, at their core, are about empowering everyone to get engaged, give, connect with their local community, and make a difference — across all races/ethnicities, abilities, socio-economic statuses, genders, faiths, and sexual identities and orientations.

The future of philanthropy rests in the form of collective giving and working in close collaboration with local communities. A large part of personal philanthropy is connected to our own sense of financial and social empowerment. When we give of ourselves, of our funds, and of our times and talents, we as philanthropists have the power to be equitable, shatter power dynamics and be responsive — all while building better, stronger communities.