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Giving to Charity
By Jay | January 4, 2008
I wrote a few weeks ago about my frustration with pressure at my office to give to the firm’s charity service. I never like feeling pressured or guilt-tripped into giving, but I do like to give when it’s my own decision to give.
Especially important to me is knowing that the money I am giving is being used to build something. Giving for the sake of giving doesn’t do much for me. For example, I never give money to panhandlers, but I will give to the religious organizations like Salvation Army, even though I am not religious, because they run programs to help people without hope to transform their lives.
One group that I have been involving myself with lately is Kiva.org. Kiva.org is a “microfinance” organization. A microfinance organization provides loans, savings, and other basic financial services to the poor.
Photo by Mauro Quilombola, Belo Horizonte, Brazil
I’ve traveled to Brazil several times, and am always shocked by how hopelessly poor so many people are there: almost half of the population in major cities like Rio de Janeiro or Belo Horizonte are impoverished. It is easy to choose not to give money to panhandlers in New York City because we have so many charities and social services, rent subsidies such as the Section 8 rental voucher program, and food stamps. In many parts of Brazil there are NO social services, and to be poor means eking out a subsistence in a favela, or shanty town. When you see someone who is old and poor in the favela, there is NO help for that person whatsoever; people usually die early in the favela.
After learning a bit about how Brazil works, I agree completely with the statement below from Muhammad Yunus, founder of Grameen Bank in Bangladesh:
“Poverty is not created by the poor. It is created by the structures of society and the policies pursued by society. Change the structure . . . and you will see that the poor change their own lives. Grameen’s experience demonstrates that, given the support of financial capital, however small, the poor are fully capable of improving their lives.”
One of the biggest problems in the favelas of Brazil is the complete lack of access to credit and banking services. Many favelas have populations of 10,000+ people, yet is impossible to get a loan to open a small store or other service. With no functioning economy there are no opportunities, no jobs, and the cycle of poverty continues, generation after generation.
Another way of thinking is that there are 10,000+ potential customers in a favela. They may not have much money, but if one enterprising person is able to get a small loan to finance the opening of a small store, that person can earn several hundred dollars per month – a year’s salary for many people in the favela. If that money is spent in the favela, it will start circulating in the favela and, bit by bit, a middle class can establish itself and the cycle of poverty can be broken.
Kiva.org allows you to make loans to different enterprises in emerging countries on their website. Kiva.org is endorsed by several large corporations, including Starbucks and Google; and by politicians such as Bill Clinton.
The minimum amount you can loan is $25.00. Some examples of people who wish to borrow money are:
The best thing about this group is that the money is usually repaid, though you do not receive interest. Once the loan has been repaid, you can either withdraw it or fund another loan.
I’ve recently been selling books and cds that I don’t want anymore, and have made my first $200. With every $100 that I make I am lending 25%, or $25, to Kiva.org, so am up to $50 so far. One of my New Year’s resolutions this year was to put 20% of any money I make outside of my salary for the year to Kiva.org. It will be interesting to see how large my “Kiva lending account” becomes.
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Topics: Giving |
January 5th, 2008 at 2:26 am
I absolutely love the idea behind this website. I think a reason why a lot of people refrain from giving to charity is because they just don’t know where their money is really going; Kiva.org eliminates that fear. Wonderful idea. Thanks for sharing.
January 6th, 2008 at 1:37 pm
I love Kiva as well. The idea that not only can you give to help someone build an income, but that they have a 100% payback and I can use that money to give again to someone else!