Ramadan drives donations, memberships to giving circles

Sahina Islam can still recall the day when she heard an elderly Pakistani couple got kicked out of their New York City home by their son-in-law and were sitting near John F. Kennedy International Airport, stranded and with nowhere to go. The incident led Islam and five friends to help the couple find a place to stay and more generosity followed.

The episode sparked a realization among the group — all mothers -- that they can make a difference in their local community, Islam said. They started pooling $20 monthly to donate to charity, and organically, Ummah Giving Circle was born.

Giving circles are groups of people who pool their resources and collectively decide how to spend their money or time. This grassroots, and very democratic, form of philanthropy has exploded in popularity during the past two decades, making it difficult to know how many truly exist, experts say. However, some estimate there are more than 2,000 in the United States alone.

For giving circles that focus on the American Muslim community, Ramadan, which ended this week, is a time when they collect donations, expand their membership, and aid charities they support.

As Muslims mark the end of Ramadan with a celebration of Eid al-Fitr, the American Muslim Community Foundation, which experts say is the only foundation hosting giving circles that focus on the American Muslim community, reached a new record. The group distributed nearly $1.3 million, the largest it has ever raised during Ramadan, to over 150 charities.

Muhi Khwaja, the co-founder of the foundation, notes the foundation saw a bump in donations this year because more families joined giving circles that it hosts or opened donor-advised funds, which are like charitable investment accounts.

“The pandemic has influenced the way people want...