Giving Circles: A 360-Degree Approach to Philanthropy

The Northern Virginia region includes Loudoun County, a traditionally rural area that has seen drastic suburbanization and growth in the past two decades. The shift in its focus and population caused those of us at the Community Foundation for Northern Virginia to ask an age-old question: How do we engage donors in this area to support efforts that strengthen their own community?

The answer has been one of the oldest and most simple forms of collective philanthropy: a giving circle. Giving circles build community by connecting participants who decide together how the collective funds should be distributed. They educate the participants about the needs of their community and provide a way for them to give back to causes they care about. Giving circles serve as one of the core components to building interest around community needs and giving.

So we brought this tactic to Loudoun County in the form of the Loudoun Impact Fund. Introduced earlier this year, this giving circle seeks to strategically invest in Loudoun County to promote education, the arts, and the environment and support the needs of Loudoun families, children, and youth. After two months, it has raised $31,000, against a first year goal of $50,000.

“I especially like the strategic aspect of the Loudoun Impact Fund,” Scott Hamberger, fund member and CEO of Loudoun-based Fortessa, Inc., told me. “The initiative will help grow the base of Loudoun donors and provide a structure to facilitate group engagement around philanthropic investments in Loudoun County. We expect this process to lead to the optimization of the positive impact of individual contributions.”

Although giving circles have existed for hundreds of years, we are starting to see them more frequently among community foundations. At the Community Foundation for Northern Virginia alone, there are several of these groups, including one of more than 100 young professionals who gave away $54,000 in their first year of grantmaking.

We’ve long known that donors don’t simply want to give their money away—they want to ensure it goes to a cause that is meaningful to them and has a positive impact on the quality of life in the community. Organizing and nurturing giving circles allows engaged donors to have a sense of autonomy while continuing to help meet the needs of the community. It is a powerful tool for connecting donors, engaging them in local philanthropy, and supporting their strategic philanthropic decisions.

Eileen Ellsworth is president of the Community Foundation for Northern Virginia.