BellaOnline Forums Money Charity Traumatized about Kiva

This tends to be why I 1) really read any fine print when I choose to support a charity and 2) do most of my charitable giving to organization that are close to me or in which I am actually some sort of involved volunteer and not just a financial contributor.

Right they get their money for the overhead fund separately and they do actively draw in that money. I did an origami speaking engagement recently (demonstrating origami at a women's club) and when they gave me my $50 check I asked that it be made out to Kiva. That went to their general fund, that's the only way they accept check donations. So they most definitely get money to cover their admin costs, as a separate stream.

Nicki - I understand their policy of supporting the local "credit groups". If Kiva themselves tried to create the infrastructure to have lenders in all these little villages and go collect the monthly payments and so on it would cost a TON of money in time and personnel and training and security and so on. By using the local network that exists, they help that local lending group become more sturdy and become able to help more locals by themselves over time, as they build up that reputation iand stability and so on. So I think a key part of an area becoming financially stable is that the local lenders become solid and viable. So I think Kiva does an awesome job of both helping individuals and also helping the local financial situation become a stable one.

If Kiva wasn't sending money in through that stream, then the local financial groups would have to themselves borrow money from bigger banks - meaning *they* would be paying interest, which they then pass along to their clients. So while a farmer getting a Kiva loan might be paying say 20% interest, if they had to get a loan without Kiva through that same institution they'd have to pay say 50% because now the institution would be re-lending money they themselves are paying interest on.

So I very much feel that using the native infrastructure is absolutely necessary in these cases.

Rae has an awesome point that in general if you donate locally and are involved with the group that you can actually see where your money is being spent and know it's being done in a way you agree with. Also, investing your time is one of the most useful ways you can help out!

There's an expression that says charity begins at home. To me that expression means those we know, as we'd know family members.

I've always kept that in mind and give directly to individuals I know need help.

I've been burned giving to a group, as you can probably tell from my attitude.

very disappointing...

Bottom line: They were intentionally dishonest. If we continue to support them, we're giving a message that what they are doing is okay. So what if you spank me on my hand as long you continue to give me money. It sounds as if they are playing on peoples' emotions. Plus, what other half-truths are being told? I say; move on.

I have already posted that I don't think that Kiva should be supported. However, you have a difficult decision to make Lisa. It is easy for me as an individual to donate to local charities. I am also lucky to have trusted friends who do volunteer work in other countries so I can give them money that I know will go directly to the people that need it with no admin costs deducted or governments or other organizations involved in determining what will be done with the money. However, if you decide not to support Kiva, you have to decide who you will support. Since the support is through free advertising for them, it will necessitate supporting another organization which needs that advertising. That will be another difficult decision. Whatever you decide I am sure it will be the best one.

I reviewed the posts here and then went to the Kiva site where the original article is posted as well as a response by the Kiva CEO is also posted. I understand the emotional response that says that they have not been telling us that our money is not going directly to the person we so carefully picked out from the pictures and information and I admit I'm a bit upset about that fact. But I did read how the financing was handled and did not absorb the truth that the business had changed. And we must all understand that this is a business -- not Kiva's end of it, but the microfinance lenders. Kiva's model has been so successful that the lenders have changed the way they do their business -- they can now make loans based on their criteria with a good chance of acquiring the money to fund that loan from small lenders at Kiva. Do remember that Kiva has made $100 million dollars available that would not have been available otherwise. This is a remarkable feat and they deserve a lot of credit for providing the framework.

We need to take a look at why we are lending through Kiva. I do so because it makes me feel like I'm doing something to help someone else even though I have only a little bit of money to help with and Kiva makes it easy to do so. The person-to-person business model provided me with choices based upon my own internal criteria and provided positive feedback each month to make me continue to feel good. That has not really changed with the insertion of the MFL into the equation, I still can help and feel good about it. It is just not quite as personal as it was.

So what does that mean? I plan to go back and download information on all the loans I have made and review the MFLs that have appealed to me previously. Rather than look at the picture of the person, I will look at the MFL. Which ones lend with the lowest interest rates? Which ones lend in the areas I am the most interested in? And instead of lending to those borrowers who chose short term payouts I will find the longest term loans from those MFLs that I have chosen. Short term loans are more administratively expensive than long term loans. That way I can maximize my impact. I can still get the positive feedback each month from repayments and the occasional loan to feel good.

Don't take your money out in a knee jerk reaction to what is essentially the price of success -- changes in the original business model which cannot be sustained when the amounts of money involved get too great.

Susan - I agree that business models often need to change over time, but I also feel that we as the ones fronting the money should be told about these changes.

If we think solely about the time issue, how many productive hours did all of the thousands of supporters waste on doing "worthless clicking"? Clicking that Kiva *knew* was meaningless but actively encouraged us to do anyway?

I agree 100% with Susan. I have worked for 6 or 7 non-profits and I know firsthand how difficult it is. They are trying to help people. This is the model that has been working - really working and making a change. And as i said earlier, many very respectable non-profits have been doing the same kind of thing with this kind of 'adopt/sponsor/feed' program.

Does that make a rainforest group not worth supporting..."but I though my money was going to THIS rainforest, not THAT one..."

Does anyone at all see what I am saying. Maybe you wanted to send Red Cross funds earmarked for new Orleans after Katrina and they went to Biloxi, or Mobile. Or maybe they went to some small town that had a completely different disaster that no one has heard of and that Katrina was convenient for drumming up general funds: in which case people were helped. Bottom line.

I am trying to give them an out here, having seen the not for profit world from the inside. Its is very difficult work, with limited funds and the sense of always being in a crisis situation. You get very little accolades and a whole bunch of logistical nightmares to wade through. You have to be happy when the end result is something positive at all.

I am afraid that if we start digging too deep into any charity - at least the successful, long term models - that we are going to uncover less-than-totally-truthful elements. Does that mean we can't run ANY of their ads? No more Red Cross, no more Humane Society, no more Rainforest Action Network or Wildlife Defense Fund.

The only alternative would be to go local and small, as many have suggested...or make run regular paid-for-ads and earmmark the funds towards good causes each year...or forget the non-profit angle completely and run ads for worthy small businesses/artists; that kind of thing.

I kind of think that last one could be very creative. We could be helping an artist, crafter or small business get a leg up, be able to feed themselves/family, achieve their dreams. That sounds like us. $50 to someone trying to make a monthly living from their art is $50 in their pocket where they can not have to worry about whether they can pay the rent.

Just some suggestions.

If we are going to toss out Kiva, then I am afraid we will start seeing lots of large charities doing things that seem underhanded as well. It's so easy to throw rocks from where we stand. I don't know if we really want to start digging like that. Better to dig at truly evil companies than someone trying to help and using the model that actually works.