Blacks Build Ties Through Giving Circles

Linsey Mills and his wife, Michelle Serrano-Mills, were already committed philanthropists in 2004 when a friend told them about a new way to give.

Mr. Mills, a financial consultant, and his wife, a business consultant, already contributed to their own donor-advised fund, offering scholarships and other charitable aid. Yet when they heard about the giving circle Next Generation of African American Philanthropists, they felt compelled to join.

They’re glad they did. Instead of simply writing checks to a community foundation, they pooled their money with like-minded African-Americans, studied their community’s social needs for themselves, and made their own decisions about how to help.

Working within the structure of the group, they’ve made new friends and gained deeper insight into how charities bring about social change—and why they sometimes fail. The couple now gives to both their donor-advised fund and the giving circle.

The group has helped spawn about a dozen similar circles around the country, feeding what organizers say is a largely untapped philanthropic urge in black working- and middle-class communities.

Mr. Mills says the group’s success offers valuable lessons for charitable institutions seeking to mobilize African-American donors like him. Lesson No. 1: Don’t assume that only wealthy blacks, like the Oprah Winfreys of the world, can become philanthropists.

“There’s a stigma out there that African-Americans and people of color don’t give,” he says. “That’s not true. It’s just that when we do give, it might be for a crisis situation. It might be helping someone go to school. It’s just not documented.”

Having a Voice

That dynamic is one that charities need to invest more time in understanding, experts say. If they don’t, Mr. Mills and others say, they’ll miss their chance to build influence with the next generation of donors, an increasingly racially and ethnically diverse group for whom the traditional rules and definitions don’t always apply.

Members of the Next Generation giving network and its sister circles have so deepened their commitment to and knowledge of philanthropy that they’ve become a valuable resource for community foundations and charities, providing everything from board members to valuable intelligence about little-noticed grass-roots charities that might need help.

“We’ve been able to talk to a lot of organizations and community foundations about how we’ve brought people together,” Mr. Mills says. “It’s given us an ability to have a voice, so people are not just seeing African-Americans as the recipients of philanthropy.”

An ‘On Ramp’ to Philanthropy

The idea for Next Generation and its sister circles came largely from Darryl Lester, former director of programs at the Triangle Community Foundation, in Durham, N.C.

Frustrated with what he felt was a lack of effort among community foundations to persuade minorities to give, he left Triangle in 2001 and set to work on a Ford Foundation research project. He traveled around the South talking to focus groups of mostly young African-Americans about philanthropy.

He explained what community foundations were and how they operate, and found that by and large, the people he spoke to had never been approached as potential donors.

The receptiveness he experienced among the people he met led him to conclude that if they banded together, giving circles could provide an ideal “on ramp” to the philanthropic world for a rising class of African-American donors.

After all, he reasoned, the mutual-aid societies that operated in segregated black communities before the civil-rights era were just giving circles by other names.

“It wasn’t some foreign concept to people,” says Mr. Lester, who is now a consultant to nonprofit organizations. “In a crisis, people will come together to help a person in need. So we just built on that impulse.”

Mr. Lester says it wasn’t always easy to persuade middle-class African-Americans that they counted as philanthropists.

And it was just as hard getting some community foundations interested in what the circles had to offer. Some said they didn’t want to work with giving circles unless they contributed at least $10,000 initially (the minimum sum required to create donor-advised funds). Others, like the Triangle Community Foundation, relaxed their minimum requirements for donor-advised funds so the circles could participate.

In 2004, a Next Generation group got started in the Raleigh-Durham area, as did another in Birmingham, Ala. Nine years later, at least 13 giving circles have sprung up around the country from the organizing efforts of Mr. Lester and his colleagues.

In 2012, according to the Community Investment Network, an umbrella organization the circles formed, members of the affiliated circles gave $45,000 in grants and donated 16,000 volunteer hours. Chad Jones, executive director of the network, said the true total is likely higher because those numbers don’t include all giving across the various circles.

“Some folks would say, ‘Well, that’s not a lot of money,’” Mr. Lester acknowledges. “But when you think about it, it is a lot,” he adds, because the donors had not been previously solicited by charities.

A Chance to Bond

Organizers say they set a low minimum for joining the giving club, sometimes asking for little more than most people might give to their churches in a year.

Ruth Peebles, a consultant to nonprofits and a founding member of Next Generation, says the group’s dues are modest—an annual minimum fee of $350. If someone wants to participate but can’t pay the full amount up front, “we don’t turn folks away if there’s a genuine interest,” she says.

Giving circle members research charities whose missions they find compelling and take suggestions back to the group.

Members of Next Generation and its affiliated circles say their participation was strongly motivated by their desire to attack drug abuse, crime, fatherlessness, and other social ills hobbling their communities and families.

“What motivates them is being around all of the issues in the news, issues like high school dropouts or the Travyon Martin case,” says Tracey Webb, founder of the BlackGivesBack.com blog and of the Black Benefactors giving circle, in Baltimore.

Another draw: the chance to develop bonds with other socially conscious African-Americans. When they were all learning about philanthropy together, it didn’t seem as intimidating, say giving-circle members. The personal ties they forged with each other mattered almost as much as the charity work they underwrote.

For instance, Ms. Peebles says, Mr. Mills and his wife served as her business coaches when she moved from part-time to full-time consulting. And when her father died, members of the group attended the funeral. So did alumni of a housing program for homeless adults. She and other group members had befriended them after Next Generation financed a trip to Washington for those in the program to talk to lawmakers about homelessness.

“It’s turned into something more than just our giving circle giving money away,” she says. “It’s building relationships with people and offering our time and talents when we can, but also extending the hand of friendship.”

Members of the giving circles have benefited charities in more ways than just providing a source for donations. Community foundations and other charitable institutions hoping to add diversity to their boards have found the groups to be a good source of prospective board members.

‘A Ripple Effect’

Giving-circle members have also identified grass-roots charities that foundations overlooked.

For example, Mr. Lester says the Next Generation group provided a general operating grant of about $5,000 to the West End Revitalization Association, an advocacy group fighting to preserve an endangered neighborhood. The group used that demonstration of local support to attract matching grants from national foundations.

“It created a ripple effect,” Mr. Lester says.

Community foundations have taken notice of such efforts to find small charities worthy of support.

In 2006, the Foundation for the Carolinas, in Charlotte, N.C., helped expand a giving circle there called New Generation of African American Philanthropists. Its roughly two dozen members pledge $1 per day for three years, for a total of $1,095. The foundation promotes the group on its Web site.

Such giving circles, says Mr. Lester, show that most community foundations and charities aren’t doing enough to nurture African-American donors. They might not see huge increases in the dollar amounts of their giving right away, he adds, but those who take action now will see long-term benefits as blacks increase their giving.

“Right now, money’s being left on the table,” he says. “People now are saying, ‘I want to give back.’ If I’m giving of my resources, if it’s a dollar or a dime, it’s philanthropy.”