YouTube, for example, has donated million free banner ads to Kiva. Google Inc. Yahoo Inc. Microsoft Corp. Kiva staff members frequently met with donors and board members at Blowfish, and so became familiar faces there. Eventually Kiva and Blowfish brokered a deal for big discounts on meals. The team worked long hours and could now meet potential donors next door, without worrying too much about who might pick up the bill.
Jackley zeroed in on the idea of optional transaction fees at the Net Impact Conference. She was on a panel with members of two related nonprofits— DonorsChoose. An audience member asked the panel how each organization covered its costs. Jackley learned that DonorsChoose suggested that users make an optional 15 percent donation in addition to their base donation. Extracting what she thought was the best of both worlds, Jackley suggested asking users to make an optional 10 percent donation to Kiva, in addition to their base loan to borrowers.
For the remainder of its funding, Kiva relies on three other revenue streams: grants, unused Kiva credit e. Being a nonprofit also makes Kiva eligible for foundation funding. The organization receives large grants from foundations including Skoll, W. Kellogg, and Draper Richards. Although foundation funding has been generous, says Flannery, a major drawback of being a nonprofit is that Kiva has to pass up commercial capital.
Flannery indeed considered converting Kiva to a for-profit model. I bet that we could raise money from angel investors, so I brought that idea to the board. But the board said no, unanimously, right off the bat. Over time, Flannery came to agree with the board. If we did convert to a for-profit model, our users would probably trust us less. A second possible disadvantage of being a nonprofit is the need to orchestrate the interests of the board, staff , and other stakeholders.
But the other side of me is very thankful to be in a community where everyone has buy-in. With more stakeholders comes more scrutiny, however—a third cost of being a c 3. Since its founding, Kiva has produced a number of compelling results.
The site regularly sells out of loans. Most businesses listed on the site are funded within hours. New borrowers are added hourly and potential lenders are urged to check back often to participate. When push comes to shove, we would rather have more people involved and connected to each other than fewer, especially if the money will come either way. At this time, the nonprofit has 95 field partners that is, partner MFIs in 44 countries around the globe.
Both the number of lenders and the average number of businesses funded by each single lender are steadily increasing. Imagine if Kiva actually worked the way people think it does.
Phong Mut approaches a MAXIMA loan officer and clears all the approval hurdles, making the case that she has a good plan for the loan, has good references, etc. But instead of giving you one, I'm going to take your picture, write down your story, get it translated and posted on an American web site, and then we'll see over the next month whether the Americans think you should get a loan.
Check back with me from time to time. And it would be demeaning for Phong Mut. Moreover, the way Kiva actually works is hidden in plain sight. So while Kiva is feeding a misunderstanding, it isn't technically hiding anything.
And finally in Kiva's defense, its behavior is emblematic of fund-raising in microfinance and charity generally, and is ultimately traceable to human foibles. People donate in part because it makes them feel good.
Giving the beneficiary a face and constructing a story for her in which the donor helps write the next chapter opens purses. Our sensitivity to stories and faces distorts how we give, thus what charities do and how they sell themselves.
What if the best way to help in some places is to support communities rather than individuals? To make roads rather than make loans? To contribute to a disaster preparedness fund rather than just respond to the latest earthquake? And how far should nonprofits go in misrepresenting what they do in order to fund it?
It is not an easy question: what if honesty reduces funding? The big lesson is that the charities we observe, the ones whose pitches reach our retinas, are survivors of a Darwinian selection process driven by our own minds. This honesty is probably one reason MicroPlace has badly lagged Kiva. Who wants to click on the FDL icon when you can click on a human face? Nicholas Kristof once tweeted that he "Just made a new microloan on www. Great therapy: always makes me feel good.
It should not just be eating your brussels sprouts. Indeed, Kristof might argue that Kiva. Still, we should take responsibility for how our pursuit of that pleasure plays out. Surely it is better to invest in an institution such as FDL without requiring it to incur the expense of posting pictures and stories of every borrower. Historically microcreditors have scaled to reach millions of people by cutting costs to the bone.
Surely it would be better for us to give in a way that allows the microfinance institutions to put more of their limited energies into helping poor people manage their difficult lot and less into making us feel good. I do not know the full answer to this conundrum, this tension between the need to draw donors and operate efficiently. Still, subtle dissembling makes me uneasy, perhaps because good intentions so often go awry.
If a charity obscures how it operates, should we trust its claims about its impacts? My wife Mai heard someone say that the world needs both playwrights and critics—if more playwrights. I treasure this observation because, as this blog must make obvious, I'm a critic.
I can testify that being a critic can be bruising, especially when the playwrights you critique are alive. It's solace to think that the world needs me. But the observation also helps me appreciate playwrights. They are the people who create things that weren't there, the people who are a tad insane in the sense that they confuse fantasy and reality.
They see something in their mind's eye and believe they can make it real. Precisely because I am not like them, I hold playwrightsvisionariesin some awe. The most skillful, passionate, and lucky of them "put a dent in the universe" as Steve Jobs said. An early employee described Jobs's uncanny ability to create a reality distortion field that altered bystanders' perceptions of the technologically possible.
Without playwrights, we might be still living in caves. At least, we wouldn't have iPhones. And we wouldn't have Kiva , the person-to-person microcredit web site founded by Matt Flannery and Jessica Jackley.
On the other hand, without criticsanalysts driven to understand the world rather than change itwe might not have mastered electricity. So we needed them too to get to iPhones. Critics and playwrights are yin and yang. Of course the two essences exist within all of us.
Critics seem to parse matters into quantities and concepts while playwrights seem to speak, and perhaps think, more in pictures and stories. Or am I over-reaching here? Like most innovations, Kiva is not entirely new. Rather, it is an ingenious fusion of older ideas.
One is child sponsorship , which Save the Children pioneered in In return, the family receives a photo and an update at least once a year. When I was perhaps eight, my family sponsored Constance, a Greek girl about my age, through Save the Children. I remember looking at her solemn face in two successive black and white portraits, trying to judge how much she had grown in a year. Child sponsorship grew explosively in the United States in the s, thanks mainly to groups with names like the Christian Children's Fund, Children International, and Childreach now Plan International.
Starting in , editors and reporters at the paper sponsored a dozen children in such countries as Guatemala and Mali. Then the reporters tracked down the children:.
The Tribune's yearlong examination of four leading sponsorship organizations A few others received a hodgepodge of occasional handouts, such as toothpaste, soap and cooking pots.
Some got clothing and shoes that frequently did not fit. One child, a year-old Malian girl sponsored through Save the Children, died soon after being sponsored, although the charity continued to accept money on her behalf for nearly two years after her death. A subsequent investigation by Save the Children found that at least two dozen other sponsors had sent the charity money on behalf of dead children in Mali for varying periods of time, in two cases as long as five years.
There was more to the story. Childreach ran a disastrous experiment in Ecuador with a novel intervention called "microcredit. Undoubtedly some hard-sell charlatanry was at work. But the problem was deeper than that: a tension between creating the psychological experience of connection that raised money and the realities of fighting poverty.
Often the fairest and most effective way to help poor children is by building assets for the whole community such as schools, clinics, and wells. Often charities contract with locals to build these things. Often things go wrong because of corruption, bad luck, or arrogance among outsiders thinking they know what will work. In the best cases, charities learn from failure. All these factors break the connection between giving and benefit, sponsor and child.
But admitting that would have threatened the funding base :. As MacCormack puts it, "An awful lot of people who sign on to a personal human being will not sign on to a well. That's their problem. The Catch is that the only way to raise money is sponsorship, but that is not the way to development. The show is the biggest part of what they do. So, they say, let's keep the show going, but try to find ways to make it better. Within a year of the Tribune series, the Missouri attorney general had slapped restrictions on Children International while the non-profit umbrella group InterAction committed to developing a set of voluntary industry standards.
Many of the rule changes related to how clearly the charities disclosed how they operated. We envision a financially inclusive world where all people hold the power to improve their lives.
More than 1. Kiva is an international nonprofit, founded in in San Francisco, with a mission to expand financial access to help underserved communities thrive. We do this by crowdfunding loans and unlocking capital for the underserved, improving the quality and cost of financial services, and addressing the underlying barriers to financial access around the world.
Through Kiva's work, students can pay for tuition, women can start businesses, farmers are able to invest in equipment and families can afford needed emergency care. Become a lender , borrower , volunteer , fellow , employee , Trustee , Field Partner , supporter.
We believe lending alongside thousands of others is one of the most powerful and sustainable ways to create economic and social good. Lending on Kiva creates a partnership of mutual dignity and makes it easy to touch more lives with the same dollar. Fund a loan, get repaid, fund another. You choose where to make an impact.
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