Charitable donations have been declining along with the economy. At the same time, one type of philanthropy is becoming popular: giving circles. People who don't necessarily have a lot of money to give pool their funds to make a greater impact. A report out today finds that people who join giving circles donate more money than they would on their own.

NPR's Pam Fessler has been spending time with one group. It calls itself Gather and Give, Let's Eat - or GAGLE.

PAM FESSLER: There's no getting around it, eating is a big part of Gather and Give, Let's Eat.

Unidentified Woman #1: Is it hot? Is it...

Unidentified Woman #2: (Unintelligible)

Unidentified Woman #1: Okay.

Unidentified Woman #2: Good.

FESSLER: The monthly meetings include potluck dinners. And tonight the table at a small apartment in Washington, D.C. is covered with hot dishes.

Unidentified Woman #3: These are, like, fried vegetables. And that's mushroom risotto.

FESSLER: The gathering part is also important. Most of the members are women in their mid '20s. Many are new to the city and this is a chance to make friends.

(Soundbite of party)

Unidentified Woman #4: Oh, where are you going?

FESSLER: But it's the giving part that really ties these young professionals together. They don't have much money, but they still want to make a difference. So each member has contributed between $75 and $200 for a total of almost $2,000.

Ms. LINDA KAUFMAN (Pathways to Housing): Hi, I'm Linda.

Ms. LAURA SANCHEZ. Hi, my name is Laura Sanchez.

Ms. KAUFMAN: Hi, Lauren.

FESSLER: Tonight, Gather and Give, Let's Eat has invited Linda Kaufman from a charity called Pathways to Housing. They want her to explain why they should give their money to her group as they whittle down a list of possibilities. The circle's organizer, Sunitha Malepati, who works for a nonprofit by day, tells Kaufman that the circle has decided it wants to help alleviate homelessness.

Ms. SUNITHA MALEPATI (Organizer, Gather and Give, Let's Eat): So we wanted to get a sense of what you guys do, how you're different from other organizations in the city. And give us a sense of your needs as an organization and how we can make a difference whether that's, you know, volunteering there, you know, making a one-time contribution.

FESSLER: So Kaufman makes her pitch. She explains that Pathways works with the chronically homeless and mentally ill, first by getting them into housing. She says $2,000 might not seem like a lot, but it can set up two people in apartments with furniture and supplies. She appears to win the group over with poignant stories of people whose lives have been turned around - and with her closer´┐Ż

Ms. KAUFMAN: I can't tell who's going to make it and who is not, but I think we have an obligation as a country to offer people the possibility of the dignity of housing.

Unidentified Woman #5: Amen. That's a great ending.

(Soundbite of laughter and applause)

FESSLER: Laura Sanchez is very impressed.

Ms. SANCHEZ: Well, you've totally converted me. I'm, like, Pathways, all the way now.

(Soundbite of laughter)

FESSLER: Still, she has a question. Why aren't there any volunteer opportunities at Pathways to Housing? Wouldn't that be more efficient? Kaufman says they're looking into it.

These giving circle members are very serious about where their money ends up. Angela Eikenberry of the University of Nebraska at Omaha says that's pretty typical. She's written extensively about giving circles and says those who join tend to be reacting against the increasingly bureaucratic world of fundraising.

Dr. ANGELA EIKENBERRY (University of Nebraska, Omaha): Giving circles are very appealing in that context because they enable people to get together, socialize with people, but still do good.

FESSLER: She estimates there are now about 600 circles around the country, but no one knows for sure. What she does know is that those who participate say they give more as a result and end up being more involved in nonprofits. That's according to a study released today by the University of Nebraska at Omaha and others.

Dr. EIKENBERRY: The money from the giving circles sometimes is kind of beside the point. Those members may talk about the nonprofit to other people that they know, and new connections are made.

FESSLER: Connections that can lead to future giving. And the members of GAGLE appear right on track.

(Soundbite of music)

FESSLER: They've been volunteering at the charities they're most interested in, in part to check them out. On a recent Sunday, several GAGLE members join two dozen volunteers at So Others Might Eat, a Washington nonprofit that provides meals and other services to the homeless.

Ms. PATRICIA DAVIS (So Others Might Eat): First of all, I'd like to say welcome to SOME. Thank you for coming today. I need everybody to wash their hands over there at the sink for me, please.

FESSLER: Patricia Davis of SOME divides the volunteers into two groups: one to help set the tables for lunch, the other, including three members of GAGLE, to man the serving trays. Like assembly line workers, they fill plates with potato salad, fried chicken cutlets and greens, biscuits and brownies, and pass them toward the lunchroom door.

Ms. DAVIS: How are you doing, sir? (Spanish spoken)

Unidentified Man #1: (Speaking foreign language)

Unidentified Man #2: (Speaking foreign language)

(Soundbite of laughter)

Unidentified Man #3: How are you doing?

FESSLER: Men, and a few women, some carrying satchels and coats, file past to collect their food. The atmosphere here, for the most part, is cheerful and very efficient, but Natalie Leonhard from the giving circle is a little hesitant when she scans the room during a break.

Ms. NATALIE LEONHARD: It seems really well-run. There's an abundance of volunteers, which usually means a good thing, like, there's a good reputation about the organization. It's too bad there's not more work to do, but I mean, that happens.

FESSLER: Still, she and the others start to wonder, does So Others Might Eat really need their money? The charity has lots of community support already. Maybe they could have a bigger impact somewhere else. The giving circle members report back at their next meeting. The volunteering has been an eye opener. Sunitha Malepati says one feeding program for homeless women was the complete opposite of So Others Might Eat.

Ms. MALEPATI: It's a zoo in the kitchen. There's people running all over the place. There's this guy, like, who was clearly, like, the person running the kitchen, screaming, out of the way, hot plate. You know, it was just chaotic.

FESSLER: But that raises an interesting question for Patty Wynn.

Ms. PATTY WYNN: So is that the type of organization that we could make better if we had money to give, or do you think even if you gave more money to that organization, they would run it in the same way?

Ms. MALEPATI: What I thought was sort of lacking was that connection between the women and the staff and then also between the women themselves. But I don't know how you - can't fix that sort of thing with money, you know, I don't think.

FESSLER: The group eventually decides to drop both SOME and the other nonprofit from their list. They agree on four finalists, including Pathways to Housing, and say they'll do more research before making a choice next month. They want to check out the groups' financial records, things such as how much money the executives make. No matter the outcome, the members of this circle say the experience has been good. This is Michelle Lin's third giving circle.

Ms. MICHELLE LIN: Even if we don't feel like we're giving away a lot of money, I think it's just building in commitment that'll expand to other things that we do. So beyond our involvement in this giving circle, I think we're all probably going to be more engaged with our communities overall.

FESSLER: She's the one heading off to business school in Michigan, but first she plans to spend four weeks doing volunteer work in Guatemala.

Pam Fessler, NPR News.

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