Beth Schultz Klarman was raised to believe “little girls should be seen and not heard” and grew up determined to change that.
So being a philanthropic kind of person, she earmarked several thousand dollars to contribute to the cause of empowering young girls and women.
She could have allocated it the old-fashioned way, “quietly writing checks with my husband to existing organizations in keeping with our interests.”
But instead she did it the new way, applying the principles and lingo of today’s venture capitalists. As Klarman, who administers a family foundation, puts it, “I created a conduit of partners and collaborators.”
Translation: She formed a “giving circle.”
In February, Klarman, 45, banded together with four other women to pool their philanthropic dollars, “leverage” their donations, in giving-circle parlance, and “grow” themselves as philanthropists. Focusing on a broad target — issues affecting Jewish girls and women, as most members are Jewish — each woman contributes at least $10,000 over five years and gets one vote on how the money is allocated. With membership expanding to 61 so far, pledges to the so-called Boston Jewish Community Women’s Fund total almost $1 million. The group plans to give away $100,000 in its first granting cycle.
In the evolving world of charitable giving, giving circles — sometimes described as a cross between a book group and an investment club — are emerging as one of the most innovative forms of philanthropy.
These latest affinity groups may seem a long way, philosophically speaking, from the classic Yankee approach to philanthropy — giving quietly, even anonymously, to established charities. It’s perhaps not surprising that they originated on the West Coast two or three years ago with some of the early high-tech millionaires.
But giving circles are definitely getting a foothold in the Boston area. Consider:
– The giving circle of a dozen 20-something women, most of them students, who pool $10 a month to help needy social welfare organizations. “As a collective we can raise significantly more money than any of us could donate individually,” says founder Sarah Feinberg, 26, an MBA student at Boston University.
– The giving circle of 15 African-American professional men — mostly lawyers and businessmen — who contribute $250-$500 each year to the African-American Federation of Greater Boston, which assists local community agencies.
– The Putnam Investments Senior Executives Foundation, a giving circle of 35 top-ranking officers of Putnam Investments formed in 1999. Members pool their personal bonus money — it totaled $1 million last year — and make grants to such community agencies as the Pine Street Inn, which aids the homeless, and Victory Generation, an after-school academic improvement program.
– The giving circle of 20 women formed earlier this year by Susan Priem, a Beacon Hill fund-raiser. With the broad goal of helping low-income women and children, each woman contributes $5,000 annually; they are currently “in the education phase” of learning about needy charities and determining where to make grants.
To be sure, there is no single standardized model of a giving circle. The Boston Jewish Community Women’s fund is a project of a larger communal organization, the Combined Jewish Philanthropies of Greater Boston.
The African-American giving circle is both a philanthropic group and a chance to socialize. “We’re a network for African-American men to get to know each other,” says attorney David Bowman, a founding member. “At our meetings we have a 10- to 15-minute business update, and the rest is social.” That means they “simply network and get to know each other,” in meetings arranged around golf games, family picnics, even a white-water rafting trip.
For some giving circles — such as the students’ group — the donation is a serious financial stretch. “A lot of us are living on loans and can’t give much, but we wanted to give enough so that we would miss it out of our pockets,” says Feinberg. For those in Priem’s group, she says, a $5,000 contribution is “not . . . a hardship at all.”
Still, the circles have certain things in common. Donors join with colleagues or friends who share a common interest in a social issue and typically give money to low-profile groups with small budgets and no development staff.
“A lot of people get mail from stable organizations like your well-established symphonies or universities,” says Priem, whose group is considering such causes as eating disorders, mentoring programs and programs for battered women.
“But my giving circle would never be interested in giving to something with such huge funding. We want to have a more personal involvement with the groups we pick.”
Unlike the more traditional model of giving — put a check in an envelope and hope it makes a difference — these donors do serious research first, even making site visits and conducting interviews before choosing recipient groups. Priem’s group has subcommittees, monthly meetings with flip charts and reports, and speakers, even a part-time research assistant.
Taking yet another page from the venture capitalists’ handbook, the groups expect a measure of accountability from their charities. Some giving circles say they would even be willing to enter into “partnerships” with them, lending their business and marketing skills to help them succeed.
“The idea is to pool your money with your friends and your expertise and your networking contacts,” says Kira McGovern, director of Giving New England, a Boston organization that promotes philanthropy by facilitating giving circles, among other strategies. “Giving circles are much more hands-on than just writing checks. This is about bringing philanthropy out of the closet, making it more of a community-building opportunity.”
One of the first giving circles was Social Venture Partners, the Seattle-based group formed in 1997 by former Aldus Corp. president Paul Brainerd. It has grown to 275 “partners,” most of them “techies” in their 30s and 40s, who contribute a minimum of $5,400 annually for two or more years.
SVP has since been replicated in nine other cities across the country, including Austin, Texas; Phoenix; and New York.
Increasingly, though not exclusively, giving circles are attracting women. Not only are more women entering the ranks of so-called “high net worth individuals,” but they are also drawn to the communal process of this style of giving.
They are women like Sandra Scott, 35, director of development for Peace Games, a Boston in-school violence prevention program. Scott was one of about 20 people — all but three of them women — who signed up for a recent “Giving Circles” workshop, sponsored by Giving New England. She is forming one with some friends.
“A lot of us who give money may not have the dollars for our gift to make a difference, but if we pool our money, we have more power,” Scott says. “Also, I’m in a book club, and I love the feeling of that camaraderie.”
“Giving circles really appeal to women,” says Sondra Shaw-Hardy, a Michigan-based authority on women’s philanthropy and author of the new book “Creating a Women’s Giving Circle,” published by the Women’s Philanthropy Institute. “I’ve found that women don’t want to be the 10-ton gorilla. They like giving the same amount as everyone else.”
“Women, by their very nature, are interested in learning before they act,” says Janet Atkins, executive director for Boston’s Goulston & Storrs Philanthropic Advisors. “Why have we seen such a rise of women in investment clubs? They love the drilling down process.
“Men don’t ask questions as often; they assume a certain degree of knowledge and authority, while women have no problems at all saying, `I don’t know anything about that. I want to know more.”‘
Giving circles also seem to be appealing to a generation of potential givers who are discouraged by some of those who traditionally do the asking.
“I think there is a little bit of cynicism out there,” Bowman says. “I think our generation is very astute as to where our money is going. Maybe because of the scrutiny the United Way went through a few years ago, I don’t just want to know that it’s going somewhere.
“Also, there are a lot of very young people out there who are unbelievably rich through dot-coms. Because of the skills they have in their jobs — managing tight budgets in a strong economy — they’re applying the same ideas to these giving circles. They are absolutely insistent that every dollar makes a difference.”
