Tag: philanthropy

If you could get your donation back, would you?

~ Sasha ~ Leave a comment

I always read the Kiva blog with interest.  In it, Matt Flannery, the founder and CEO, gives a candid, blow-by-blow account of Kiva’s growth.  Kiva is an innovative organization that allows donors to lend money directly to clients of microfinance organizations in the developing world.  This means that donors have the chance to connect to an low-income individual who needs a loan, lend that person money, and then get the money back.

There is a lot of interest in the idea of using invested capital (meaning funds that eventually will get returned to the investor) to fight poverty.  Which is why I found Matt’s recent post on the Kiva blog so fascinating.  In this latest iteration, Kiva “lenders” (the donors) get their money back as it’s paid back, rather than as one lump sum at the end of the loan cycle.  The effect, as Matt writes, was that people quickly turned around and lent money back to other borrowers:

We had a lot of activity, in the first 10 days since the event, our users have lent about $2.5M on the site.  Before that, we had been lending about $3M every month, so this is a significant jump.  However, instead of new funds being injected into the system, this surge of lending is compromised mostly of dollars that are already in the system.  Instead of sitting in our account, they been liquidated…headed next into the hands of entrepreneurs on the site with the help of our Field Partner MFIs.

This is an incredibly interesting observation, as it speaks to the mentality of the “philanthropic investor” who has the option of getting their money back.  My suspicion has always been that people who have this option would, in general, choose to reinvest the money that comes back to them — that the return of their donation is really more about accountability than about actually getting their money back.

As the social investing world expands, it will be interesting to see how this further develops.  It’s perhaps the first real data set that will help us all to understand how people really think about their giving.

How much is too much?

~ Sasha ~ Leave a comment

I was just thumbing through a catalogue on my kitchen table, one

$198 cashmere sweater from Best & Co.
$198 cashmere sweater from Best & Co.

which offered the opportunity to buy $98 corduroys and $198 cashmere sweaters for my 4-year old.

Outside of the proof that marketers don’t yet know everything about us — the catalogue definitely arrived in the wrong house — it got me thinking: how much is “too much” when it comes to consumption?   As a friend of mine once described about religiosity, it’s common to think that everyone less religious than you has no values or spirituality, and everyone more religious is some sort of kook.  Which may be why I let myself off the hook for buying at Whole Foods or for the occasional tin of Stonewall Kitchen Pancake Mix (yum!) as an occasional luxury, but decide that $100+ for kids cords is borderline offensive.

I’m not arguing for a society without luxury — in fact, luxury goods played an important role in consumption over the past decade and in some ways drove the U.S. economy (let alone being things of beauty).  I’m more curious about how any society tramits a system of values that determine what to consume, what to save, and what to give away.  Religion is probably a good starting point, inasmuch as it emphasizes community, piety, charity, and giving.  Leading by example is likely another, which is why Bill Gates and Warren Buffett should be praised both for giving AND for showing the world what is expected of people with great wealth.

This question will only become more important as more wealth is created in the Middle East, India, China, and other emerging nations.  Is there anything that can be done that can strengthen and reinforce the impetus to give and support those in needs?  And how big a role should breakthrough non-profits play in setting an example of what can be done with philanthropic dollars?

A week for review

~ Sasha ~ Leave a comment

I will be out for a week and not blogging. The last time I took a few days off, traffic to my blog increased. I’m not sure that’s a good sign, but who knows?

The good news is that this blog is borrowing a much-maligned campaign by NBC networks to justify summer reruns: “If you haven’t read it, it’s new to you.”

This is your chance to review some posts you may have missed. Read one every day if you like, and it will be almost as good as new posts:

Philanthropy:

– Donations that Make a Difference

– Reflections on Maimonides’ 8 levels of Charity (tzedakah)

– What would Maimonides think of Kiva?

Storytelling

– Explaining Complexity with a good Analogy

– Even Fiji water can be green?

– 4 in the morning

Pro-poor businesses

– 1298 ambulances in Mumbai

– The need for maternal care in the developing world

– Acumen Fund breakfast discussion on energy

…and, for some reason, the single most popular post on the blog: About Sasha.

Thanks to all of you for reading and for the positive feedback. It really means a lot and it’s exciting to know you’re out there and tuning in.

What would Maimonides think of Kiva?

~ Sasha ~ Leave a comment

(First blog Milestone reached: a blog post inspired by a reader’s comment. The next milestone will be when the same thing happens and I don’t know the reader personally).

A blog reader of mine brought up Kiva in response to yesterday’s post, which I thought was interesting – both because I didn’t mention Kiva and because it was on my mind too. So what would Maimonides think of Kiva?

In Maimonides’ discussion of charity, he says that you should not put money into the tzedakah box unless you know that the person responsible for the box is faithful, wise and trustworthy. If not, you’re not sure if the donation will help improve a person’s life.

This sense of distrust has become more common in recent decades, especially in international charity. There’s a sense, fair or not, that little has been accomplished with the $2.3 trillion the West has spent on foreign aid in the last 5 decades, since much of the world is still very poor. William Easterly in his book The White Man’s Burden has been one of the most vocal critics in this camp, explaining the many failings of international charity and international aid. On the other end of the spectrum, Jeff Sachs argues in The End of Poverty that we could end global poverty by increasing global giving.

(There’s a book’s worth of discussion that this opens up, which I’ll avoid for now and just point out that the US GDP last year was just under $14 trillion, so if my math is right the total spending on foreign aid by the West over 50 years is equivalent to two months’ worth of the U.S. GDP. Two months worth of output for .25 billion people vs. 600 months’ worth for ~3 billion people? So maybe it’s not that much after all…)

While Easterly’s focus is more on international NGOs (e.g. the World Bank), someone like my friend who raised the question about Kiva can’t be blamed for thinking, “Why would my $25 make a difference, and how can I know it’s being spent wisely?” To me this is just a step removed from the legitimate fear that the tzedakah collector is unfaithful or dishonest. The worry is that your money goes into the box with the intent of helping someone, but that someone isn’t helped as a result.

To me this helps explain why most giving in the United States is local and through religious organizations: it is much easier to feel confident that your donation will make a difference when you personally know the person asking you to give, are giving as part of an established community, and have first-hand exposure to the problems your donation is meant to address.

So what would Maimonides make of Kiva? There are lots of organizations doing international work that are incredibly effective and trustworthy stewards of people’s charity (yes, I think that Acumen Fund is one of them). The brilliance of Kiva is that it has found a way to create that personal connection and the sense of empowerment on the part of the donor, allaying the fear (conscious or not) that the $25 donation will be lost in a sea of larger donations, or will never reach its intended recipient. Kiva has used the Internet to get rid of the tzedakah box altogether, allowing the giver to “give directly to the poor without being asked” (Level 5 in terms of honorability, for those keeping score).

My own hope is that this is increasing the number of people giving and increasing people’s comfort with and habit of giving – especially by people in their 20s and 30s –and that this will lay the foundation for more generosity, education, and awareness of the problems of international poverty and the innovative solutions now available to address these challenges.

Reflections on Maimonides’ 8 levels of Charity (tzedakah)

~ Sasha ~ 13 Comments

Good timing. Just as I’ve started this blog I came across a description of charity (the Hebrew word tzedakah) by the 12th century Jewish scholar and physician Maimonides

Maimonides wrote a code of Jewish law, the Mishnah Torah, based on the Rabbinic oral tradition, and he described charity from the least to the most honorable as follows:

8. When donations are given grudgingly.

7. When one gives less than he should, but does so cheerfully.

6. When one gives directly to the poor upon being asked.

5. When one gives directly to the poor without being asked.

4. When the recipient is aware of the donor’s identity, but the donor does not know the identity of the recipient.

3. When the donor is aware of the recipient’s identity, but the recipient is unaware of the source.

2. When the donor and recipient are unknown to each other.

1. The highest form of charity is to help sustain a person before they become impoverished by offering a substantial gift in a dignified manner, or by extending a suitable loan, or by helping them find employment or establish themselves in business so as to make it unnecessary for them to become dependent on others.

This got me thinking about what motivates people to give. I asked this question of someone today and she said that people give because they want to see an impact, want to see a positive change in the world. I think that is true, but there’s more to it than that. People give for lots of reasons, many laudable, some base.

Maimonides suggests that all giving is not equal, that the motivation behind the gift has some moral content. My reading is that the greatest gifts are those that create a relationship of equals between the donor and the recipient. Otherwise, the gift can create subservience or obligation, can undermine the dignity of the recipient, and can keep the recipient subjugated to the giver and in a constant position of need. This means that we, people in a position to give and people who encourage other people to give, need to think about the power dynamics that we create, and about ways to make the dignity of the recipient paramount in everything we do.

What about times when it’s better not to be anonymous, when a gift can be a signal? There are times when putting one’s name on a list of donors, on the side of a building, or on the name of the world’s biggest Foundation, can be important as a statement about what can be accomplished with great wealth – a statement that can inspire others to act. Or a gift can make you part of a group of like-minded people, who are coming together to make a change in the world.

I don’t know how to unpack the moral pieces of this puzzle, but I think it’s worth some more thought. I’d love comments on this one in particular.

Blog launch

~ Sasha ~ 5 Comments

Six months ago I wouldn’t have considered starting my own blog. Having since written a few blog posts for the Acumen Fund blog (a few of which were cross-posted at NextBillion.net) and seen a real response, and now that I actually have an RSS reader that I check every day, I’m of a different mind. My feeling right now is that blogs are likely to be the new center of gravity for fresh, authoritative, and interesting content on the web. And they have significant potential to take a bite out of journalism, publishing, and plain ‘ol web sites. For example, I’ve been putting off getting a new credit card, since my card expires next month. I wanted to research online. Type “credit cards” into Google and you get a lot of industry sites without a lot of objectivity or depth. A blog search got me some seemingly objective answers in about 5 minutes.

My saving grace is that I’m quite confident that no one, for now, is reading this blog. At the same time I know that everything published online is essentially permanent – so I should try to get off on the right foot. For now I’m expecting this blog will be reflections on the nonprofit world, philanthropy, global interconnectedness, fairness, making change, and general reflections on marketing, sales and communication. I’m in no small part inspired by Seth Godin – both personally and by his blog – and while I hesitate to reference a blogospheric icon as an inspiration, what I love most about Seth’s blog is that he seems to see the whole world through a unifying lens of marketing, creating valuable customer relationships, and making positive change. I’m beginning to see that same level of unification and interconnectedness in a lot of areas, so I figured I’d take a stab at blogging about it. My hope is that blogging about these things will help me to sharpen my thinking, will improve my writing, and will force me to turn observations into (could it be?) insights. At the same time I’m fascinated to see if people will start reading, commenting, and furthering the conversations I hope to start, and maybe someday forming a tribe that cares about these ideas. I’m assuming that the focus of my blog, its themes and direction, will emerge over time, and I’m not going to work too hard to confine myself to a specific set of topics for now.

So, here I go…wish me luck.