Kiva Review: Giving a Virtual Hand Up, Not a Handout

I’ve written about Kiva before, but since I loaned some more money out today I thought I’d bring it up again. Kiva.org allows individuals to make loans starting at $25 to low-income entrepreneurs in the developing world, also known as microcredit. By doing so, you can provide affordable working capital for the poor (money to buy a sewing machine, livestock, etc.), empowering them to earn their way out of poverty.

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So far I’ve lent money to people in Samoa, Ecuador, Ukraine, and Azerbaijan. Now, even though I’m not earning any interest on the money I loan out, I’ve read that the borrowers do pay interest on the order of 10% or more. However, these rates are still much better than their alternatives from loan sharks, and the interest goes to fund the local operations. You can view the interest “lost” as charity if you’d like. I kind of just see it as lending money to a friend – no interest, but you’re hoping to create some positive change. Payments are handled through PayPal, and they have a 100% repayment rate so far.

Here’s my favorite loan so far:

Vitolina owns a set of beach fales that she rents out to back-packers or picnickers passing through the village and works hard to keep the structures in good condition. Fales are simple, small open huts with thatched roofs built in the style of the traditional Samoan house. Vitolina?s fales are situated on a white sandy beach on the Samoan coast. She readily welcomes guests and provides them with a simple roof, unbeatable views, and home-cooked meals. She will use the loan to renovate the beach fales.

I would certainly pay for that! Now imagine that she makes a profit, builds more huts, and hires other Samoans as employees. She’s now making a self-sustaining living for herself and several other people. I get my money back, and can lend it out again somewhere else across the globe. Beautiful.

Modest Needs and Kiva: See Where Your Money Goes

One of the things I don’t like about some charities is the lack of specific impact. Where is the money really going? Here are two charities that use the internet to add transparency and interaction to your charitable giving. In addition, they offer a way to leverage your donation to create even better change.

ModestNeeds.org is a non-profit 501(c) charity, operating predominantly online, with a goal of helping people who live paycheck to paycheck survive past life?s unexpected speed-bumps and perhaps save them from a slippery slope to financial ruin or even homelessness. Most of their ?grants? are less than $300 and go for things like unexpected medical bills. You can see all the money requests, and even vote on which requests to fund. The neat thing is that it started with just one teacher giving 10% of his salary every month.
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Giving

Although we should be giving back throughout the year, I know I tend to give at the end of year. Thanks for all who responded to my charity suggestion post – my wife and I have decided where to give this year. We are giving at least $100 to each of the following:

Local Food Bank
Modest Needs
4-H National Council
School Alumni Scholarship Fund

Modest Needs (mentioned before), has found a donor that will match 100% all monthly donations for 2006. So I’m going to start a monthly match in 2006 instead of a lump-sum now.
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Gimme Gimme Gimme, err.. Give Give Give

‘Tis the Season of Giving. And that means tons of snail mail from all kinds of charitable organizations. Everyone wants of piece of your generosity. I haven’t even heard of half these organizations – Endangered seahorses? Home-bound elderly folk who want more rap to listen to? I’ve got a lifetime supply of ‘free with a side of guilt’ mailing labels.

My wife already has her list of organizations she plans to give to: 4-H, and her alma mater. Me, I was never very attached to my school nor their sports teams. Last year I gave to Modest Needs. So, I’m opening it up to you all for some suggestions, just leave a comment and I’ll check them out.

Hurricane Katrina

My have I been out of the loop. The damage done by Hurricane Katrina is much worse than I had thought. I don’t like to preach, so here are some links to learn more if you wish:

- FreeMoneyFinance is matching donations up to $1,000. You can donate anywhere you’d like, just e-mail him where and how much.
- If you are a blogger, you can join the Hurricane Katrina: Blog for Relief Day. If not, try the Katrina Help Wiki.
- My charity of choice is ModestNeeds.org.

Modest Needs: Small Change. A World Of Difference.(TM)

ModestNeeds.org is a non-profit 501(c) charity, operating predominanlty online, with a goal of helping people who live paycheck to paycheck survive past life’s unexpected speed-bumps and perhaps save them from a slippery slope to financial ruin or even homelessness. Most of their “grants” are less than $300 and go for things like unexpected medical bills. Much of it is based on the honor system, and all the money flow is very transparent and shown online. The neat thing is that it started (and continues) with a teacher giving 10% of his salary to others in need.

Instead of the $5 suggested monthly pledge, I only gave a one-time $20, but I thought I’d spread the word a bit as well. Happy Holidays!