Saturday, January 3, 2009

Charitable giving in tough times

You know those things on your to-do list, the ones that just sit around because, well, that whole litany of excuses?

Yeah, me too. But I got around to one of them just recently. Kiva.org is, as they like to say, all about "loans that change lives".

This is absolutely not charitable giving in the traditional sense, where you give some organization some cash and they do whatever they want with it leaving you to question the efficacy of your dollars and cents. Kiva is different, because at Kiva, you fund a loan to an individual. Kiva is the mouthpiece to the internet, announcing which initiatives need money and keeping the user, you, as the underwriter of the loan, informed about what's going on. Kiva also deals with the balance sheets, making sure that the on-the-ground organizations they connect to users are appropriately distributing funds and collecting loan payments. And the real kicker, of course, is that like any loan, if it's successfully repaid, you end up with your money back; preferably, to loan to another entrepreneur in a developing area.

For me, the time wasn't right with Kiva when I first learned about it. I wasn't sure of my employment situation, I wasn't sure how much of the massive medical bills I had at the time would end up as my responsibility. I was still giving to other organizations as I continue to do today, but believe it or not, the downturn in the economy has made me realize the time is better now than ever for giving through this micro-loan system.

What I keep coming back to is that the money comes back to you. This isn't a donation, where your cash just disappears. It's a loan to help out an entrepreneur. And when the term is over, you can loan that same cash out again to someone else. Is this not an incredibly novel and opportune way to help people at an economically uncertain time?

To me, this seems like an fantastic opportunity to really drive some effect out of money you'd normally consider a charitable donation. I think I'm in a position now to really give this a shot. My challenge to you -- and to myself -- is: barring some unforeseen hardship, I'm going to loan $25 per month through the micro-loan system Kiva has set up, for all of 2009. My first loan is to Nancy from Bolivia, who's going to use her short-term loan to buy additional goods to stock her grocery store. Nancy's had a loan before, and is rated as a top-notch client who is always prompt with her loan payments. The company on the ground she's dealing with has loaned over $500,000 to over 1,000 entrepreneurs. Together they have a delinquency rate of 0.02% and a default rate of 0%. Good luck, Nancy!

You can check out my progress and loans here. Please feel free to drop me a line if you're up to the challenge so we can connect on Kiva.org. I think we'll have a good time giving this a shot, and I think we'll make a difference while we're at it.

1 comment:

Anonymous said...

It's really important to step forward and help out where you can with the economy as bad as it is. The secret is that there are a lot of ways that you can help and do good without it costing a lot of money.

I think that most people want to do good and make the world a better place, they just aren't sure how they can do it on their own. That is why these sites are so great. They leverage a lot of people doing a little bit to create huge results.

There really are so many little things we can do. We just have to remember them since they often get forgotten in the rush of our lives