In my money blog, Throw Away Your 401K, I have started to examine the question, “How can I help poor people?” Since “‘tis the season,” let me just cut to the chase and offer a suggestion that I believe might actually be directly helpful to poor people and, conveniently, can also be achieved with a few clicks of the mouse and make for an excellent Christmas gift!
For the same amount you might spend on buying your mother a new sweater or piece of jewelry, how about giving a gift in her honor that would make a positive impact in the lives of people struggling in poverty? Sounds easy enough, but the problem for me is how to ensure that my gift is actually going to make the impact I’m being led to believe it is. For instance, I sponsor a child, David, through World Help, but I am not at all convinced that my $26-a-month contribution is actually making an impact in the life of the young man whose picture I have taped in my prayer journal. Supposedly, my gift is enabling David to go to school. But what do you think would happen if I decided not to sponsor him anymore? Would he be called to the office one day during math class and informed by the principal that, regrettably, his sponsor withdrew and he has 10 minutes to clean out his locker and leave the premises? I highly doubt it.
I believe, instead, my $26 is aggregated with other funds to sponsor free education for all the children in that area, one of whom is David. Further, I feel sure that not all of my $26 is reaching that school. Even though, according to their annual report, less than 10 percent of funds collected are used on administration and fundraising, that other 90 percent likely goes to pay for staff, facilities and operating costs in the countries where World Help has program offices. Yes, those are legitimate program expenses that boost local economies, but if I want my $26 to go directly to David? Not happening.
Call me jaded, but I like giving models that are a bit more transparent (though I continue to fund David out of fear that he’ll be expelled from school if I stop). I’ve spent a considerable amount of time in the last couple of days researching organizations I thought had such models, only to find that they simply have more crafty ways of doing the same thing World Help does: taking my gift that I believe is doing one thing and doing something else with it. Even if that something else is all-together good, as a funder, I like to know, really know, what my money is going for. Which is why I am excited to tell you about microlending. There are several notable organizations that do this, and I encourage you to research it further, or just click through to Kiva. Kiva’s mission is to connect people, through lending, for the sake of alleviating poverty. With Kiva, you can actually give a gift that keeps on giving. Rhetoric aside – you can spend $50 on a “gift” through Kiva, and use that same $50 to give another gift next year. So this year, give a $50 microloan in honor of Mom to a 27-year-old woman in Tanzania who wants to open a café. When she pays you back, you can use that same $50 to give a microloan in honor of Granddad to a barber in Mali who wants to purchase 5 new clippers, 6 pairs of combs and brushes, 5 containers of bleach, 5 bottles of 90% alcohol, 10 bottles of hair ointment, etc. Truth! These are actual microloan requests from Kiva. Best of all, there’s a field partner on the ground who is making sure the money is used correctly and reporting back on the impact the loan made. As for the administrative costs so many other non-profits try to act like don’t exist? Kiva suggests a 15% processing fee on each loan, which covers their overhead, but each and every one of your $50 is going to that barber in Mali. If you don’t want to pay the processing fee, edit the amount to $0! Right now the Omidyar Network is giving a matching grant to Kiva for each processing fee. So if you’re feeling generous, go with the suggested 15% or even higher, and your contribution toward operations will be doubled.
I hope I’ve said enough to drive you to click through to Kiva and learn more about what they do. It’s no secret – the organization issued more than $66 million in microloans last year. That’s a lot of $25 and $50 donors! So why haven’t I heard of this before? Probably because I haven’t been looking for ways to help the world’s poor. I’ve been too busy asking, “What will I eat?” or “What will I drink?”or “What will I wear?” this holiday season (Matthew 6:31).
Kiva offers “gift-giving” possibilities for any budget. There’s also the option of giving $25 loan gift cards, so your friend or family member can get the thrill of choosing the borrower. So, stay in your jammies, take the laptop to the sofa with a cup of hot chocolate and finish your holiday “shopping” with gifts that will not only warm the heart of the receiver and the giver, but will also honor God (Prov. 14:31).
P.S. Stay tuned for more insights on how to actually help poor people by subscribing to my money blog.
*Not in the sense of being “holier than thou,” but as a double entendre meaning “cool,” “awesome” and “amazing,” as well as “ethical,” “scriptural” and “virtuous.”