Thursday, February 10, 2005
Giving circles and community banksTwo news tracks suggest both a new boon and a growing threat to community-based giving. On one side, the popularity of giving circles (sort of like investment clubs for philanthropy) seems to be galvanizing the charitable impulse of many. On the other side, the aggressive moves of Wal-Mart into banking services might be threatening the traditional local boosters of community banks.
Giving circles, according to this article in the Washington Post are a fast-growing way for like-minded individuals to combine their giving toward common causes. According to the study that informed the article (available for download in PDF format):
Giving circles exemplify core American values of democracy and equality -- they are broadly accessible across wealth levels and they offer opportunities for learning, growth, collaborative decision-making, and community building. While the traditional philanthropic infrastructure of foundations can seem intimidating to an individual, giving circles allow easy access for people of all ages and affiliations. While individual philanthropy can be seen as the purview of the very wealthy, giving circles allow donors to leverage their assets by pooling their gifts for greater impact. Most giving circles provide each donor with an equal voice in the decision-making process. Donors in giving circles connect -- often powerfully -- with each other and with their community as they learn about community needs and practice community leadership.
The study found 220 giving circles in 39 states -- most of them less than four years old. Some aggregate major dollars by their members, others (like Boston's Daily Muses Fund) just require their members to donate a dollar a day to the pool. A wise development officer would learn more about these groups, and find them in their communities...just as the marketing staff should be trolling for book clubs.
While these groups may be focusing philanthropy within a community, some suggest that Wal-Mart's moves into banking and financial services may be sucking it back out. According to philanthropy blogger Lucy Bernholz, the low-price leader's business plans may put the squeeze on local community banks. That, in turn, could be bad news for local nonprofits and community funds:
Community banks, long-time investors in local economies and staunch philanthropic allies to community foundations and other local nonprofits, have a tough-enough time competing against global banking behemoths. Wal-Mart's ''everyday low prices'' for money transfers put it smack in the middle of the multi-billion dollar remittance business. Perhaps it has plans to offer community development investments, mortgages, and small-business loans one aisle down from its payroll cashing service and just past the toilet paper and cleaning supplies.
The weird tension between aggressively local and massively global continues.
posted on Thursday, February 10, 2005 | permalink