BellaOnline Forums Money Charity Traumatized about Kiva

Lisa, I too don't know how you could have "lost" your money.

Perhaps a different option is DonarsChoose which focuses on donations to specific classroom projects?

Lisa, I had this same situation - a default for $25. It seems the bank or microfinance institution should 'eat' these, not us. It seems quite hypercritical that our money goes into a group fund at these institutions instead of to the individuals we select, but then when the person we select defaults, the loss goes directly to us. We are shouldering the risk without the direct connection benefit that we thought we were getting.

However, I am going to think about this one a little more before stopping with KIVA, because I still do believe in microfinancing in general, and no one seems to be questioning that KIVA facilitates a lot of amazing loans. I just think they need to do some major explanations on their website now...So personally, I am not opposed with continuing the ads on BellaOnline, but I also support whatever decision you make...

I need to go read the link you provided, but my first reaction is to suggest keeping Kiva. They are still providing the micro-loans. People are still being helped. That is the ultimate goal and what is being achieved.

I do agree completely that they are doing good in general, I should probably make that clear. They are giving loans to people who need them. However if my choice is to support a taxi driver in a big city who wants to buy more taxis, or a single mother in Kenya who needs food for her family, I really want to make sure my money is going to the mom who needs food. At least for my own personal cash donations. I will look around and see at least for my cash, if there's an organization who has that more precise focus. I suppose Heifer is always good for that - their whole focus is on those very basic life-support missions where they help the people learn, grow and become self sufficient.

I nearly signed up to loan a woman money a few days ago, before I saw this post.

What bothers even more than the NY Times article is that I just went to the Kiva site and they are saying nothing about it. If I had anything to with running Kiva I'd have something posted as an answer you can be on it. Their silence is simply not a good sign.

I don't know how you can qualify a non profit 100%. If you go with the bigger ones, well, you know they all have those large funds and there is a % of waste of money there.

I'm glad I decided not to become one of their lenders now. But, it's such a beautiful idea that I wish either they'd make their system work or that some other org would!

Nancy
BellaOnline Yoga Editor

I think with any charity you are essentially giving up the ability to choose where your money goes. You just have to trust they will use it to the best of their ability to help the cause. So for me, that means my choice lies in which charity to let them use my money for.

I like what the Humane Society does. I like what the Wildlife Defense Fund does, and the Red Cross. I do not get to choose if my money goes to paying their president, running their marketing campaign, or actually feeding a homeless pet. But it is my hope they my contribution enables them to help the cause, ultimately.

I know you know this, lisa. I also understand that you feel wronged by Kiva misleading people into thinking the funds were directly earmarked to certain folks in need.

However, if you think about it, that makes no sense for ANY charity. They need funds to run the organization, to pay rent on their offices, to buy computers, to market themselves, to design their website and ads, to do the zillion things any organization does. If everyone is sending money directly to a donor, then where does the money come to run Kiva itself? It makes no sense to bypass the general fund - the system would quickly fall apart.

I don't see this as a problem, personally, the misleading part. I think it is part and parcel of charities. You 'adopt' a polar bear. You 'buy' an acre of rainforest. You 'feed' a child. It gives the donor a nice sense of ownership. And your funds really DO go towards those things...just in a more indirect fashion.

You just have to trust the charity will do what they see fit with your money and that ultimately the people you 'chose' to loan to will benefit.

A little off topic here, but connected. I just clicked on the "Obama wants moms to go to school ad" (dancing cherries?), and my "Web of Trust" software flagged the site (Classes USA) as having a poor reputation. Anybody know more about that?

The thing is, when you make a donation to 'an individual' on KIVA they ask you if you also want to donate a certain percentage for KIVA's overhead expenses, so they make that separation very clear. And none of the articles seem to be questioning whether the 'loan' money actually goes into the 'overhead' fund, it's just that us loaners don't seem to actually be selecting and therefore helping to determine who gets loans, since they've already been given out. So, like Lisa Shea, I thought I was essentially donating to women, because that is who I selected...but really, if I want to help women specifically, I am probably better off going to a women-centered organization...my selecting women on KIVA wasn't necessarily influencing who was getting loans, from what I am reading in these articles...

After reading the NY Times article, I felt a whole range of emotions from sadness to disillusionment to anger. To me, giving people a wrong impression of what is actually taking place with their money shows a lack of integrity even if,in the end,they really are using that money to improve the circumstances of the poor in the world. Therefore I feel that the organization should not be supported nor should any other organization that isn't totally above board to their contributors about what they are doing. This reminds me of a slick used car salesperson who lies about a car. If I know or think he/she is lying I would never buy the car whereas if I am told the truth, I might be able to live with the defect and buy the car anyway. Kiva should have been upfront about how the money was being handled.

To be honest, I've never been that comfortable with the concept of Kiva. Unless I've misunderstood it, then I'd love someone to set me straight...

It would be one thing to me if Kiva was providing loans directly and because donors were fronting the money and taking the risk that it was done at low interest rates. But my understanding is that interest rates for microfinance loans range from 10% up to even 40-50% (Kiva's site says about 10-36% in their examples). My understanding is that microfinance is an interesting investment because it is very high risk but very/relatively high reward.

But Kiva seems to use regular microfinance institutions, but the donors are fronting the money and taking all the risk, and the bank/MFI is keeping all the interest profit and returning the principal (generally redonated). If the money is lost, the bank loses nothing. So I don't get it.. it seems more like charity to bank to me, than to the actual people. Am I misunderstanding???

Personally, unless I'm way off here, I'd rather see our support go elsewhere.. especially given these latest revelations.

Nicki :-(