According to a recent survey by the Forum of Regional Associations of Grantmakers, the United States has 400-odd giving circles in some 40 states—up from 200 in 2004—that have raised more than $90 million. Some consist of a few friends who casually get together for potluck dinners; others have grown into 400-member organizations with tax-exempt nonprofit status. Donations vary widely, from less than $100 to more than $100,000 a year—minimum contributions may be required or left to the donor's choice, or tiered to what each member can afford. A circle may devote itself to a single cause or pick a new one each year, with many circles inviting experts or foundation directors to speak so they can make their philanthropy more strategic. Typically members work together reviewing proposals from nonprofit organizations, sometimes arranging fundraising events and action campaigns. If you're interested in starting your own circle, these five steps will help.
Step 1: Define your mission
Do you want to set up the group first and then recruit members? Or would you rather gather members before deciding on a goal? How will you develop consensus? Who's an appropriate member?
Step 2: Decide your scope
You can choose a single issue or vary your choices. Also discuss whether you will focus on community or national or international issues.
Step 3: Choose a size and structure
Do you want four members or 400? Set a schedule for meetings, and decide whether members must attend to earn a vote.
Step 4: Remember the extras
How will you cover additional costs, including meeting expenses, paperwork, perhaps legal or bank fees? Who will be in charge of which responsibilities?
Step 5: Figure out resources
What are the expectations of the group in terms of donating time, expertise, and money? Will you create one bank account or write checks individually for grants? If the latter, make sure members make each check payable to a nonprofit grantee rather than another member so that everyone gets a charitable tax deduction. Should you want to formalize the circle as a nonprofit corporation, get advice from a local community foundation or an accountant. Such tax-exempt status has advantages but requires annual filings and other legal procedures.