Cathy Pharoah: Giving circles show that charity can be very much a social activity

There should be a collective drive to raise the profile of giving as a normal part of why people get together, writes our columnist

Cathy Pharoah
Cathy Pharoah

Innovative channels are currently at the forefront of initiatives to increase giving. But, as recent Third Sector articles on ATM giving and crowdfunding have shown, there are doubts about the ability of such channels to deliver on the expectations they raise.

Another such channel is the 'giving circle', which was discussed by the US academic Angela Eikenberry at a presentation in London recently. There are now more than 600 giving circles in the US and a number in the UK - the most well-known being the Funding Network, set up by the philanthropist Fred Mulder. Giving circles are where donors pool resources and discuss collectively how to give. Anybody can start them, and they range from loose networks to formal organisations. Average giving is tantalisingly high, according to Eikenberry - about £8,800 a year.

But before going down the route of another discussion on the merits of another giving channel, it is important to think about another point made by Eikenberry - that giving circles are "highly social". But are they primarily about the social, rather than the giving, aspect? There are many examples of giving rooted in people's social lives, such as a whip-round for a friend's favourite local charity or a benefit for a colleague who is ill. Recent work by the Centre for Charitable Giving and Philanthropy, supported by Trust for London, highlighted how a vital part is played by informal, largely unrecognised, organising to raise and pool funds in giving by migrant and minority communities.

Our consumer-oriented approach to raising gifts today places an ever-increasing focus on individual choice. Donations are measured through an 'individual giving survey', and although we know that giving has an important social element, in practice this is not recognised. We might even feel embarrassed about, for example, gala dinners for the wealthy, the collective value of whose glittering outfits far exceeds the giving that justifies the event.

Giving circles are not a fundraising channel but a part of people's social lives. Of course, many do raise funds for specific causes, but they also have striking spin-off effects. Some members bypass the circles, going directly to individuals (also an important part of migrant and minority giving), or supporting a cause individually.

This shows that the giving is prompted mainly by the cultures and norms of the giving circle. Gift Aid offers a perverse incentive to neglect community or collaborative giving initiatives in favour of individual donors, whose details and tax rebates can be collected. The recent easing of rules for reclaiming tax relief on small gifts, often part of collective local fundraising, is an important step, but too small and restricted.

We should continue to push for more. Giving circles are led by donors, not charities. There should be no charity takeover, but a collective drive to raise the profile of giving as a normal part of why people get together.

Cathy Pharoah is professor of charity funding at Cass Business School

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