Giving circles: How collective giving works today

With giving circles, philanthropy isn’t limited to the very wealthy. Instead, a group of individuals can come together around shared values and build community through collective giving. Whether it’s friends, coworkers, neighbors, or affinity groups, these donation circles make generosity feel more connected, participatory, and human.

Giving circles also empower donors to learn together, support causes they care deeply about, and stay engaged beyond a single donation. At the same time, these groups can look very different depending on their structure, raising important questions about legitimacy, transparency, and whether this model is the right fit.

In this guide, we’ll break down what giving circles are and how they work today, how to tell if one is legitimate, and the practical steps to starting or joining one. You’ll also learn when giving circles make the most sense for your mission and what other options exist for building a community around collective impact.

Key takeaways

• Giving circles are a legitimate form of collective giving 💡 A giving circle is a group of people who pool resources and make shared decisions about where to give, often grounded in trust, transparency, and shared values.
• Giving circles emphasize community and engagement 🤝 They help people give more intentionally and stay connected to the causes they care about, making them better suited for relationship-building than quick fundraising wins.
• Clear structure and transparency are essential ⚖️ Giving circles can operate informally or through a fiscal sponsor or nonprofit, but clear roles, decision-making, and fund handling help build trust and legitimacy.
• Giving circles are accessible across budgets 💛 Contribution amounts vary widely, and many giving circles intentionally design their structure so people can participate regardless of how much they give.
• Free tools can support collective giving 🛠️ Once a giving circle has clarity on who is organizing it, tools like Givebutter can centralize contributions, share updates, and keep members engaged.

What is a giving circle? 

In a giving circle, individuals come together, pool their donations, and collectively decide how to allocate those funds. These groups are frequently made up of friends, families, colleagues, or others who share similar philanthropic values.

This model is often community-oriented and allows donors to contribute more intentionally, support local nonprofits and underfunded causes, and practice shared decision-making in philanthropy.

Bookmark this

Get clear, plain-English definitions for more nonprofit terms →

How do giving circles work? 

Giving circles can be set up in different ways, depending on participants' preferences. Most fall somewhere along a spectrum, ranging from informal friend groups to more structured nonprofit programs.

Informal giving circles

Some groups operate informally, relying on trust and shared understanding among members.

• One person typically collects and distributes donations on behalf of the group
• Funds may be shared through money transfers, checks, or cash
• This approach works best for small, close-knit groups

⭐️ Good to know: To stay organized and transparent, some informal circles use fundraising platforms like Givebutter to centralize contributions, track gifts, and avoid handling cash or checks.

Back to basics

Strengthen your foundation with a nonprofit fundraising 101 guide →

Hosted or fiscally sponsored giving circles

Many giving circles choose a more structured setup by working with a community foundation or fiscal sponsor, sometimes through a donor-advised fund (DAF).

• Donations are typically tax-deductible because they’re made to a qualified 501(c)(3)
• The group can recommend grants, but the sponsoring organization retains final discretion
• This model provides structure without the burden of forming and running a nonprofit

⭐️ Good to know: This is one of the most common and practical ways to grow giving circles.

Learn more

Discover if fiscal sponsorship could save you time →

Standalone nonprofit giving circles

In some cases, a giving circle may form its own 501(c)(3) nonprofit rather than operate under a sponsor.

• Offers tax benefits and full independence
• Requires ongoing administration, compliance, and IRS reporting
• Best suited for circles with clear scale, long-term plans, and capacity

⭐️ Good to know: For most new or smaller groups, this option adds complexity without clear benefits.

How to tell if a giving circle is legitimate

Giving circles are a legitimate and growing form of collective giving. Like any charitable structure, they rely on trust, transparency, and clear governance to work well.

Watch for these potential red flags:

• Pressure to join or contribute quickly
• An unclear mission or decision-making process
• Lack of transparency around fees, fund handling, or beneficiaries

⭐️ Good to know: Charging membership or administrative fees is common and not inherently a red flag. What matters is whether the group clearly explains where the money goes and who controls it.

Why do people join or start giving circles?

People are often drawn to this approach because they want their giving to feel more connected, intentional, and communal.

Common reasons people join or start giving circles include:

• Combine resources 💰 Pooling funds allows participants to support larger grants, fund specific projects, or make strategic gifts that may be out of reach individually.
• Give more intentionally 🎯 Circle members decide collectively where funds go, learning from one another and directing support toward meaningful or overlooked causes.
• Build community 🤝 Giving circles foster connections among people with shared values, creating a sense of belonging and introducing members to value-aligned nonprofits they might not have discovered on their own.

💡 Pro tip: If you’re not ready to launch a formal giving circle, crowdfunding or peer-to-peer fundraising can be simpler ways to rally your community around a cause without setting up a structured model.

How to get involved in giving circles 

Giving circles are built around collective funding and are often designed to be accessible across a wide range of budgets. Consider the following ways to get involved:

• Join an existing circle ➕ Look online, ask around in your local community, or explore directories like the Philanthropy Together global giving circle directory. 
• Start your own circle 🟡 Bring a group of people together to pool individual donations in support of nonprofits or charitable causes. 
• Partner with an organization 🤝 Reach out to value-aligned nonprofits to see whether they’re willing to connect you with their networks or know of any local giving circles.

💡 Pro tip: If you run a nonprofit, partnering with giving circles can help expand your reach and boost your fundraising. Just keep in mind that many of these groups support multiple organizations, so it’s best to view them as one nonprofit funding source among many.

More to explore

Discover 15 nonprofit grants you can apply for today →

How to start your own giving circle in 4 simple steps

If you’re interested in building a philanthropic community and giving together, the steps below will help you understand what’s involved and get started with confidence.

Step 1: Find your founders 👋

Start by identifying people you know who might want to help launch the circle, such as family, friends, neighbors, or colleagues who share your values or care about similar causes.

• Most giving circles begin with two to five dedicated founders
• Look for people who enjoy collaboration and community-building, not just giving

💡 Pro tip: Lean into the power of connection early. As people express interest, ask them to reach out to their network to find others who may be a strong fit. 

Step 2: Define your “Why” & shared values 💛

Once you’ve gathered your founding team, discuss your shared values and objectives. These conversations will shape your group culture and guide your decision-making process. 

• Reasons for joining 🤔 Understand what motivated each founder to get involved. 
• Core values 🪙 Identify priorities and hopes for giving to create your central values.
• Plan for living these values 📜 Decide how your group will put its values into action, whether by supporting aligned missions, working with specific nonprofits, or any other giving approaches. 

💡 Pro tip: Revisit these questions quarterly or annually to keep your giving circle true to its values. 

Step 3: Set your vision & structure 🎯

Decide how your group will operate in a way that is sustainable and supports your goals. Every giving circle is different, and your structure can be as formal or informal as you like. 

Before admitting members, address these points: 

• Size 👥 The number of members you plan to include
• Contributions 💸 The expected giving amount per member
• Giving cycle 🔄 How often the group meets and distributes funds
• Admin structure ✏️ How funds are handled, such as partnering with a fiscal sponsor, opening a shared account, or writing individual checks

💡 Pro tip: Once you know who will host or organize your giving circle, tools like Givebutter’s free fundraising pages can help you centralize contributions, track giving, and share updates with members.

Step 4: Launch your giving circle 🚀

With your structure in place, it’s time to invite new participants and keep members engaged. 

• Social media 💻 Share updates with members on platforms like Instagram and Facebook. 
• Group chats 📱 Add members to coordinate meetings and stay connected. 
• Ongoing engagement 📣 Just like with nonprofit communications, giving circles benefit from intentional engagement, member appreciation, and impact stories. 

Dive deeper

Launch a monthly giving program that drives consistent support →

Power your giving circle with Givebutter

Whether you’re joining an existing giving circle or thinking about starting your own, transparency, shared values, and clear decision-making are essential for success. Understanding how a giving circle is structured and how funds are managed helps build trust and supports long-term sustainability.

Givebutter makes it easy to turn collective generosity into action and impact. With fundraising pages designed for group giving, you can centralize contributions, share updates with members, and stay organized as your giving circle grows. Features like recurring giving and donor management also make it easier to turn one-time participation into ongoing involvement. 

Sign up for Givebutter to support your giving circle and bring collective giving to life.

FAQs about giving circles

Are giving circles legitimate?

Yes. These groups are a legitimate and widely used model for people who want to pool their money and give to nonprofit causes together. Like any charitable structure, they operate best when there is transparency, a clear mission, and voluntary participation. Common red flags include pressure to join, unclear decision-making, or a lack of transparency around how funds are handled.

How much money do you need to start a giving circle?

You don’t need a lot of money to start a giving circle, and contribution levels can vary widely. Some circles suggest or require amounts ranging from tens of dollars to thousands, while others keep contributions much lower, sometimes $10 or $20 per giving cycle. If you’re starting your own giving circle, choose a contribution level that aligns with your group’s goals and your financial comfort.

How is a giving circle different from a fundraising platform or pooled giving service? 

A giving circle is a form of collective giving in which members come together around shared values and make joint decisions about where to direct funds. The emphasis is on collaborative learning and decision-making. In contrast, many pooled-giving services focus on collecting donations for a specific nonprofit or cause, without involving contributors in decision-making.

A fundraising platform, meanwhile, is a tool used by nonprofits or organizing groups to collect donations and manage supporter engagement. Some platforms, including Givebutter, also offer features like donation tracking, fundraising events, and CRM tools. The platform itself, however, isn’t a giving circle.