Giving Circles and DAFs
How Friends, Neighbors, and Community Groups Can Multiply Their Impact with a Giving Circle and a Donor-Advised Fund
Most of us give to charity the same way we’ve always done it—quietly and on our own. We write a check to a cause we care about, make a quick donation from our phone, or pitch in when a friend asks us to support a fundraiser. It feels good, but it can also feel small. And somewhere in the back of our minds, we sometimes wonder: Is there a way to make an even bigger difference?
Imagine this: a few friends are gathered around a kitchen table, sharing stories about local needs they’ve noticed. A neighbor mentions the after-school program that’s struggling. Someone else talks about a food pantry that’s running low. Another person describes a refugee family that their congregation is trying to support. As the conversation continues, a realization begins to take shape:
What if we didn’t give alone? What if we gave together?
This is the heart of a Giving Circle—a simple idea that has quietly become one of the most powerful ways ordinary people are reshaping philanthropy. And when a Giving Circle is paired with a donor-advised fund (DAF), the impact can grow even stronger.
Whether you’re part of a book club, a faith community, a volunteer group, or simply a circle of friends who care about making the world a little better, a Giving Circle might be the most meaningful project you ever take on together.
The Magic of a Giving Circle
A Giving Circle is really just a group of people who decide to pool their charitable contributions and make decisions as a team. But the simplicity of the model hides something much deeper: people learning together, listening to one another, building community and directing their compassion in a coordinated way.
Giving Circles can be intimate—just a few families. They can be mid-sized—20 to 50 members from a club or congregation. Or they can be large, with hundreds of members connecting through a civic group or workplace.
Philanthropy Together, a national organization supporting this movement, calls Giving Circles a form of “democratic philanthropy,” because everyone gets a voice. Everyone gives. Everyone learns. Everyone decides.
And the benefits ripple beyond the dollars themselves. Groups that give collectively:
Build stronger community ties
Make more impactful grants
Expand their understanding of local issues
Turn giving into something joyful, social, and shared
Why a Donor-Advised Fund Makes It Easier
A Giving Circle can operate without any special tools, but many find that opening a donor-advised fund makes everything much simpler.
Think of a DAF as a charitable savings account. Members contribute, receive an immediate tax deduction, and the Giving Circle later recommends grants from the pooled funds.
The pairing works beautifully because a DAF:
Keeps everything organized. All contributions go to one place.
Simplifies tax reporting. Each member gets their own tax receipt.
Gives flexibility. The group can save, invest, and grant whenever they want.
Reduces administrative work. The sponsor handles recordkeeping, compliance, and grant processing.
That means the Giving Circle doesn’t have to reinvent the wheel—it can focus on learning, discussing, and giving.
Choosing the Right DAF Partner
A DAF sponsor is a public charity that manages donor-advised funds on behalf of donors. Sponsors handle the administration of the funds, including recordkeeping and the distribution of grants to qualified charities as recommended by the donors. Not all DAF sponsors are the same, so choosing the right one matters. A Giving Circle should evaluate fees, investment options, account and donation minimums, grant minimums, the quality of donor service, and whether the sponsor allows professional investment management.
For most Giving Circles, two types of sponsors usually rise to the top:
Your Local Community Foundation
These are deeply rooted in the community. They:
Know local nonprofits well
Understand neighborhood needs
Can offer hands-on support
Often have experience with Giving Circles
Local community foundations can be perfect for groups who want to focus their giving close to home, but they can have significant restrictions and fees can considerable higher than other options.
National Independent Sponsors Like iGiftFund
Independent DAF sponsors like iGiftFund often provide greater flexibility in grantmaking, and offer lower fees and fewer restrictions compared to commercial sponsors or local community foundations. As an example, iGiftFund offers:
Personalized service
Low costs
Flexible structures
Deep experience helping creative or community-driven groups
This option is ideal for circles that want local or national giving, a customized approach, or a lean administrative partner.
Either way, a DAF gives the group a solid backbone without adding complexity.
How a Giving Circle Actually Works
While some Giving Circles eventually grow into large, well-organized groups, most begin with just a few people and a simple plan. Here’s how the journey usually unfolds:
1. Start With People Who Care
A few friends or extended family members, neighbors, coworkers, or members of a congregation decide they want to do something together. No one needs expertise—just a shared desire to make a difference and give with intention.
2. Decide How Much Each Person Will Give
The group sets a minimum annual contribution—$100, $500, $1,000, or whatever makes sense. Some choose equal amounts; others allow flexible contributions. Many invite families to participate, letting children have a voice too.
3. Open a Donor-Advised Fund
With the group assembled, they open a DAF in the name of the Giving Circle.
Steps are simple:
Choose a sponsor (for example, local community foundation or iGiftFund).
Fill out a short application.
Select 2–3 people to act as fund advisors.
Decide whether to invest the funds.
Make contributions—cash, checks, or appreciated assets like stock.
The sponsor handles the rest: tax acknowledgments, compliance, and grant processing.
4. Learn Together
This phase becomes the heart and soul of the Giving Circle. Members meet monthly, quarterly, or annually to:
Explore issues they care about
Hear from nonprofit leaders
Visit local organizations
Look at data and community needs
People often discover things about their community they never knew before.
5. Discuss, Debate, and Decide
The group considers which nonprofits or projects to support. Some circles vote. Others seek consensus. Some ask each member to nominate an organization. The decision-making process becomes a lesson in shared values and respectful conversation.
6. Make the Grants
Once the group agrees, the fund advisors log in to the DAF account and recommend the grant. The DAF sponsor sends the funds and any required documentation to the nonprofit. The Giving Circle can then stay in touch, visit, volunteer, or learn how the donation was used.
7. Celebrate—Then Do It Again
Many Giving Circles end their cycle with a celebration or a gathering where they reflect on what they’ve learned and the difference they’ve made. Over time, this rhythm becomes a tradition members look forward to.
Why Giving Circles Are Spreading So Quickly
Giving Circles are now one of the fastest-growing movements in philanthropy. Why? Because they offer community and connection that people crave. Giving Circles create a way for people to connect around a shared purpose and desired impact to make the world a better place.
Connection. Purpose. Shared impact.
They make giving feel social, energizing, meaningful and rooted in community.
And they dramatically increase charitable power. While $100 from one donor matters, when you can combine $100 from 50 donors working together you can have real impact and even reshape a local program!
Giving Circles also empower ordinary people—not just those with foundations or large fortunes. Any group, with any budget, can start one. And along the way, members learn about local issues, nonprofit effectiveness, and the deeper dynamics behind community needs.
The bonds that form in a Giving Circle often extend far beyond philanthropy—trust, shared purpose, and lasting relationships.
A Few Stories From the Field
Giving Circles take many forms, but their stories share a common thread: ordinary people creating extraordinary impact.
A Neighborhood Circle:
Ten neighbors each contribute $500 to a DAF in the name of their Neighborhood Giving Circle. After learning about youth needs, they grant $5,000 to an after-school tutoring program, then volunteer together to really make a difference.
A Faith-Based Circle:
Members of a congregation pool their giving through a DAF in the name of their new Congregation Giving Circle. Their grants support housing programs, refugees, scholarship funds, and local outreach—becoming a vital part of the congregation’s mission. The DAF also makes a loan to help finance a new roof for the church.
A Family-and-Friends Circle:
Several families meet annually and decide to form a Family Giving Fund. They make lumpsum and annual gifts to the DAF in the name of the Family Giving Fund. Each year they involve their children and grandchildren in research and discussions. They learn about environmental issues and support conservation projects year after year, passing generosity to the next generation.
A More Meaningful Way to Give
A Giving Circle is proof that philanthropy doesn’t have to be complicated—or reserved for the wealthy. With a bit of structure and a shared sense of purpose, any group of friends, neighbors, coworkers, or families can become a real force for good.
Pair it with a donor-advised fund, and the entire experience becomes easier, more flexible, and more impactful.
Most importantly, Giving Circles transform giving from a solitary act into a shared journey—one filled with joy, connection, and community.
If your group wants to support families, strengthen education, champion the environment, or address a need unique to your community, a Giving Circle might be the perfect way to start giving more intentionally—and more powerfully—together.
Resources
Philanthropy Together is a global initiative, co-created by hundreds of collective giving leaders, to scale and strengthen a growing movement. We’re on a mission to diversify and democratize philanthropy. https://philanthropytogether.org/
The Dorothy A. Johnson Center for Philanthropy. Since 1992, the Johnson Center has been a leader in helping you understand, strengthen, and advance effective philanthropy for strong, equitable, and inclusive communities. https://johnsoncenter.org/
The Giving Project is working to build a network of grassroots giving circles in Vermont. We see giving circles as a way for everyday givers to learn about the issues that matter most to them, impact their communities in meaningful ways and have fun, together! https://www.givingprojectvt.org/
iGiftFund (Independent Charitable Gift Fund) is an IRS-recognized 501(c)(3) public charity operating as a national community foundation and donor advised fund sponsor. Located in Hudson, Ohio, they serve individuals, families, companies and foundations who value flexibility and true independence. https://igiftfund.org/
About the Author
Michael L. Thompson, CAP, AEP, is a philanthropy advisor and owner of Aligned Giving, LLC and a strategic consultant to iGiftFund. He maintains the Chartered Advisor in Philanthropyâ professional designation, and is an Accredited Estate Plannerâ. He retired from his wealth management firm in 2024 after nearly thirty years as a personal wealth advisor, and continues to provide philanthropic advice to a small group of individuals and non-profits. He lives in Vermont.