One month later…the NY Times on Kiva

November 10, 2009November 9, 2009 ~ Sasha ~ Leave a comment

In case you missed it, the New York Times has picked up the Kiva story. What I’m struck by is:

The story was broken by David Roodman in his original blog post.
How quickly the conversation spread online, including response by Kiva to the blog posts and changes to their website.
The analysis is definitely deeper online than in the Times story, which almost feels like a story about the story.
It took more than a MONTH from the time David wrote his post until the Times picked it up.
For all the blogging/Tweeting buzz about the story, there’s been no real impact on giving to Kiva, which makes me think that the online conversation was really “inside baseball” and that the Times story will be what reaches 99% of Kiva’s donors.

Blogging and tweeting all have a role to play, and for some things it’s clearly where the deeper conversations happen. But we also can fool ourselves into thinking that just because everything we read is talking about something, then everyone knows about it.

It’s true only as long as you know who you mean by “everyone.”

Connection, not Deception

October 15, 2009 ~ Sasha ~ 3 Comments

Continuing on the Kiva thread, I wanted to pick up on my previous post where I argue that what Kiva is doing is nothing new, and put a sharper point on my argument.

(But first I have to applaud Kiva for already making prominent changes to its website in explaining how they operate: old vs. new; and old vs. new.)

Saundra Schimmelpfennig of Good Intentions Are Not Enough describes my take on this as “Sasha Ditcher argues in his blog that to get people to donate aid agencies have to use half-truths.”

This isn’t what I think at all. Lots of nonprofits get lots of people to donate in lots of ways, and it’s simply empirically incorrect to say that they “have to use half-truths.” Most don’t; some do. I firmly believe that transparency and accountability will win; that, especially now, any organization that makes claims that it cannot support will lose (faith, trust, brand, credibility, donors) in the end.

What I’m saying is that “give to help this person” pitch is both true enough and compelling enough that it’s not going anywhere, no matter what we wish for.

Why is it so compelling?

A parable: imagine you’re walking in the woods on a crisp fall day, the leaves have just begun to turn, and you can see your breath as you crunch down the still trail. You come upon a clearing and see mist rising above a flat, wide lake, and across the lake and close to the opposite shore you see a single rowboat. As you approach, you notice the boat is rocking and you catch a glimpse of the boater’s face, agitated. She whips her head around to see you, and starts waving frantically. “O my gosh!!!” she gasps. “Thank goodness!! Please help me!! My boat has a leak and I don’t know how to swim! I’m going to drown! Please help me!”

You will swim into the water and help. Nearly everyone will.

Now change the story. The lake is in a park, and fifty people are around. What are the odds you’re going to help? Low. And in fact the odds that nobody helps are better than you’d think.

Need proof? According to newspaper accounts, in 1964, Kitty Genovese was stabbed to death by a serial rapist and murderer. The killing took place over the course of nearly half an hour, and 38 people witnessed the attack and did nothing – they didn’t even call the police. This wasn’t an isolated incident. It is easily replicated by social psychologists, enough that it’s been coined the “bystander effect.”

As Saundra points out, there are lots of reasons to bystand when faced with people in need half a world away: maybe someone else will give; maybe the money I give won’t get there; maybe it will be mismanaged. The reasons not to give are so compelling that it reminds us that each time someone does give it is an act of generosity, of faith, and of trust.

How do you counteract the natural tendency to do nothing? Kiva gives us at least one very compelling answer. Create an experience for a potential donor that’s as similar to walking by a lake alone with one person in danger. How does Kiva do it? They present this potential donor with:

A specific borrower
With a real story with strong emotional content
Needing a specific amount of money
With a deadline
And the ability to see what happened to that person
And they present this all to a web-savvy, 21^st century consumer who has lots of experience clicking on things online and having real things happen (e.g. when they use Amazon)

The ask is concrete, tangible, direct, has emotional content, a feedback loop, and it’s presented to someone who is used to using online tools. It’s brilliant, and it’s well-executed.

And let’s remember: these are real people who are getting real loans from real microfinance organizations and really paying them back. And Heifer International really is buying livestock that goes to real people in the developing world.

It does seem like Kiva is already making some adjustments, and my guess is that they will lead the pack given their commitment to transparency. But just last month I received an email from another international NGO titled “Help millions of women like me” with a personal letter from one woman whose story was alternately heart-wrenching and triumphant. It’s a true story, it’s compelling, and it’s not going anywhere.

To summarize:

Do I think that giving to individual people in need is ever going to get to the root of the problems of poverty in the world? No.

Do I think that there’s some blurring of the lines of what exactly is happening versus the appearance of what is happening when a nonprofit says “help someone like me”? Probably.

Do I think that fundraising in this way ultimately serves to undermine the hugely important role the nonprofit itself plays, inevitably leading to the spurious conclusion that all “overhead” should be minimized so nearly all of the dollar given goes to the person in need? Yes.

Do I think that we desperately need both nonprofits and donors to lead with a different story that has strong emotional content and connection AND that helps us build real, large-scale solutions that work to solve these problems in a fundamental way? Absolutely.

And do I think that the “help this one person” ask is going away, ever? No chance.

The good news is, conversations like the one that just flared up around Kiva will keep the system in balance, and there are more tools than ever to create this kind of accountability.

But the real challenge is for all nonprofits to look at the Kiva playbook and really understand why their ask is so effective. We need better stories to donors that explain all the nuance, challenge, importance and complexity of this work, but these stories will only serve their purpose if they have all the concrete, tangible, direct, and emotional content that Kiva creates for hundreds of thousands of people every day.

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Kiva Community Conference Call

October 15, 2009 ~ Sasha ~ Leave a comment

The Kiva conversation continues vigorously online, including nice summaries by Sean (Donors Choose v. Kiva and Philanthropy Daily Digest) and Nathanial which are definitely worth reading. For those interested in a live conversation, dial in to Kiva’s next community conference call on October 20th at 3pm U.S. Pacific time.

Dial in US: 866-740-1260 Access Code: 6415483

Dial in (Outside US): +1 303-248-0285 Access Code: 6415483

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Kiva Customers Don’t Receive the Loans you Give

October 13, 2009 ~ Sasha ~ 39 Comments

If I wanted to get your attention, that’s the headline I’d write. Strictly speaking, it’s true. And when you only have a minute to grab someone’s attention, isn’t it your job to grab their attention?

That in essence is what’s at the core of the conversation that’s swelled up over the last two weeks about Kiva. David Roodman’s “Kiva Is Not Quite What It Seems” post kicked things off; Tim Ogden took things further in his post on the Philanthropy Action blog, and Sean Stannard-Stockton provided the definitive summary of the conversation, with his take on it, on the Tactical Philanthropy blog in a post titled “Is Kiva Misleading the Publc?”

Here’s the low-down: you can log on to Kiva, find a microfinance client in the developing world who needs a loan, and fund that person. The catch is that that person has already received their loan. In fact all the clients on the Kiva website have already received their loans. The microfinance organizations that gets money from Kiva does receive those funds, but the funds don’t go to that individual client. The GiveWell blog provides the picture that’s worth a thousand words by showing what the Kiva donor is told (graphically) and what the microfinance organization is told.

The thing is, what Kiva’s doing is nothing new. Heifer International raises tens of millions of dollars a year by sending out millions of catalogs that are every bit as sophisticated as the LL Bean or J Crew catalogs, only instead of buying rugby shirts you buy a chicken or a cow for a family in the developing world. But you’re not really buying that chicken or that cow. On the bottom of every page for every cow or chicken or trio of rabbits you “give” to someone, there’s a small-print disclaimer:

Gifts made through this catalog represent a gift to the entire mission. To help the most number of families move toward self-reliance, Heifer does not use its limited resources to track gift animals from donation to distribution. We use your gifts where they can do the most good by pooling them with the gifts of others to help transform entire communities. And, because you are helping Heifer fight hunger and poverty, your gift is tax deductible.

So the gift of a cow isn’t buying a cow, just like the Kiva loan isn’t going to that actual Kiva borrower.

Before we get on our philanthropic high horse, let’s be clear about what is and isn’t true here. To keep it as simple as possible, imagine you run a nonprofit that provides food aid to people struck by natural disaster. The simplest story goes:

People are suffering as a result of this natural disaster
One can buy food for one person who is hungry for one week for $10
We’re in the business of buying this food
So give us $10 and we’ll buy the food.

And when you’re writing a catchy headline to get a high open rate for your emails, you’ll lead with “A $10 gift will buy someone food for a week.” This is, strictly speaking, true.

So the question here isn’t really about truth, it’s about how big a sin of omission each nonprofit can and should commit as they play this game. Is it the responsibility of the nonprofit sector and donors alike to break down the myth that each gift does or doesn’t buy a specific thing? And will those who take the high road ever win out in the marketplace of ideas? It’s an empirical fact that people give more to help one person than to help many (check out this excerpt from Made to Stick for the startling experimental data), and this is wired deep into our brains, it’s not something that was created by the nonprofit sector.

Which is why I think Nathanial Whitttemore has it right when he says that this “problem” is here to stay, namely that nonprofits will, by and large, tell almost-truths to their donors – focusing on a specific connection between their dollars and a given outcome – and that a major shift for the majority of the giving population won’t happen any time soon (if ever), even though as professionals our aspiration might be to change the narrative to investing in nonprofit organizations, as Sean suggests. It’s a good aspiration, and we should keep at it, but it will never be the bread and butter for most nonprofits or for most donors.

It is true that philanthropists who makes major giving decisions and give considerable time and energy to these decisions have the opportunity to break this cycle; and the supporting infrastructure of philanthropic advising has an opportunity to push this conversation forward, aided by nonprofits who are willing and able to tell a different story. But let’s not pretend that we will someday divide the world into two, with the masses being duped into emotional decisions that get them to dig into their wallets while major donors dig in deep analytically and primarily make educated, highly rational, institutional-building investments. If it doesn’t happen in the stock market, why will it happen here?

All givers are essentially the same, essentially human, making rational and emotional decision based on the information they have and the amount of time they have to give to their giving decisions. The emotional connection is the starting (and often ending) point for everyone, and what matters is the ability of every individual donor (whether they give $20 or $20 million) to insert themselves into the narrative of a particular nonprofit organization, the problem they’re addressing, and the role that the philanthropist and their gift have in addressing that problem.

The “your money buys this” message isn’t going anywhere soon. If anything, what Kiva and Charity:Water and DonorsChoose have shown is that there’s a way to take this approach and adapt it to 21^st century tools – so that you can see an online photo of the microloan recipient or the well that was dug or the classroom that was helped — if not directly by your money, at least by that same amount of money as the amount you gave. It’s interesting that making this association more visible and tangible is calling into question the veracity of these claims (no one’s writing about Heifer, right?), when in fact all Kiva et al are doing is strengthening a tried-and-true narrative. The mechanics of gift -> organization -> recipient haven’t changed one bit.

If you think about it, it’s nearly impossible to change these mechanics and run an efficient, global nonprofit. So why are we all acting so surprised?

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