Deceptive advertising hurts the entire aid industry

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Comments

[Alison]

Thanks for the article, Saundra, I agree with you on many fronts. But I do want to point out some ways that Kiva is different from the child sponsorship model.

(I'm a KF8 Kiva Fellow, and repeating arguments from my comments on this blog: http://sashadichter.wordpress.com/2009/10/13/kiva-customers-don%E2%80%99t-receive-the-loans-you-give/)

Kiva is different from the child sponsorship model in that when you "sponsor a child," perhaps you’re actually paying for some other service to the community. With Kiva, when you “buy a loan” – you are actually “buying” or funding a loan for exactly that amount from the MFI who has lent the money to the individual. With your loan, you’re not paying admin fees to run an MFI, you’re not giving to a community development fund, and you’re not paying Kiva’s admin costs.

As you pointed out, there ARE other costs associated both with sponsoring a child and with buying a loan. But in the case of Kiva, the borrower actually covers those costs (through their interest payments) – and in that case, Kiva is not misrepresenting the “cost of aid.” Kiva is clear about this – lenders aren’t providing aid, they are LENDING interest-free capital that borrowers pay back with interest to an MFI. I think that is an important distinction. I agree that more could be done to emphasize the role of the MFI and its associated costs. . . but MFIs are Kiva partners for a reason, because they equally benefit from this interest-free capital.

Kiva has had its operating details available to interested parties all along- and since this discussion, they are making it more explicit to first-time visitors on the site. I think it's incorrect to call the organization "deceptive" on those grounds.

[Saundra]

Kayza,

You make some great points about trust from donors. You'll find that my next post is on that very topic.

[www.facebook.com/profile.php?id=651407383]

J. you have a very, very good point. But, it strikes me that misleading advertising just makes the problem worse by perpetuating incorrect ideas.

There is another issue here, as well, and one that also harms the relationship between aid providers and the broader public. To take an example, the American Red Cross has in the past used misleading publicity more than once. For instance, in the run up to Y2K, they seriously over-hyped the danger. I hear an interview with one spokesman, where the interviewer called them on it. The interviewer admitted that they KNEW that they were overstating the case significantly but justified it on the grounds that they were thus accomplishing the goal of getting people to have some sort of disaster readiness plan and kit in general. Similarly, after 9/11 they created a huge hype wave asking for blood donors, although all the local hospitals were telling people NOT to come in. Again, when they were called on it, they admitted that they didn't really need all those donors just then (and even had to DISCARD some blood, because they had so much more than they could use in the time-frame that blood stays usable), but, again, they justified it by the claim that it supported their longer term goal of getting more people into the blood donor system.

The problem that this presented to the ARC is that it seriously damaged their credibility with many people and alienated people who might have become donors, or even volunteers. In fact, many of the people in the "new pool" of blood donors were nothing more than useless numbers, because they never donated again; they felt taken advantage of and were no longer interested.

In other words, it's not just in how we raise funds. No matter what the purpose - if we mislead people, once they realize, they feel used and cheated, and they feel that they have been disrespected - which is true. That is a pretty sure way to alienate people, which is exactly the reverse of what you want to happen.

[Saundra]

J,
Thanks for the comment and you're right about the point I'm trying to make. I agree that effectively fundraising to a general public that really doesn't understand aid work is difficult. But to be both fair, ethical, and professional we have to find ways to make it work.

[J.]

Hey Saundra - good post. Thanks for getting it out there. If I read you correctly, you're not taking a stand on whether or not Micro-Credit and Child-Sponsorship are viable programmatically. Rather, you're questioning the manner in which most NGOs advertise and fundraise for those kinds of programs. That about right?

We all (at least if we're honest) know that what NGOs and aid workers actually do, and what the general, aid work non-insider public perceives that we do are two rather different things. Presenting our work to the public in a manner that is succinct, yet also sufficient and also honest and that does not mislead, particularly in the context of fundraising from a public that fundamentally misunderstands aid work is one of our biggest challenges, currently (my opinion).

[Sonia Singh]

As a fundraiser and proponent of microfinance, I have really been impressed with Kiva's model and growth. I thought the article "Kiva Is Not Quite What It Seems" was thoughtfully written and asked a lot of good questions. Matt Flannery, founder of Kiva, provided an equally thoughtful response here (http://bit.ly/A28UV).

[twitter.com/cynan_sez]

Hear hear. This is something I mentioned over at J's place (http://talesfromethehood.wordpress.com/2009/09/08/re-asking-some-basic-questions/#comments) about a month ago, in reference to the illusion of unmediated P2P models. Glad to see you have addressed this more thoroughly. Great post.