Kiva, Heifer International, the American Red Cross, and donor trust

This post has been moved to Good Intentions' new website. Click here to read the post.

Comments

[KG]

looking back at this debate, coupled with my time in '08-'09 as a Kiva Fellow, I had the feeling that Kiva actually underutilized the controversy to show that they are ahead of the game in terms of peer to peer connections. Here's my interpretation explaining why I believe they do better than average:

1) I loan $25 to a microentrepreneur group in the DR on Jan 1st. Loan is fully funded the same day.

2) At the end of the month, my $25 gets added into all loans directed towards that MFI. The MFI has records of ( not kidding here): the total amount they receive from Kiva for that month, AND which groups/entrepreneurs that bundle of money represents.

3) The repayment schedule that the lenders receive is generated based on the repayment schedule of the entrepreneur group. At the MFI level, we are responsible for reporting the actual repayment schedule of the group or entrepreneur. This is policy.

4)If the group or entrepreneur is delinquent or defaults, Kiva's monthly accounting communication with the MFI records this. There is an actual roster like listing that Kiva uses to match what is due with what has been repayed. The MFI uses it's real internal data, client by client, or group by group. MFI's will have made (and the lenders are informed) the decision whether to protect the lenders from the delinquency or to have the lenders lose the money. Thus, the true repayments that the lenders are getting are based on the results of that actual group.

5) Ultimately I do see it as a very very close approximation of real peer to peer lending. Now, I believe that some MFIs may not follow policies diligently enough, but the guidelines and policies are there,honest MFI's and the policies make the peer to peer thing pretty darn REAL.

I think lenders have been a little hung up on the fact that there are some time lags, and that their "lend" button doesn't dispense money to borrowers faster, more immediately. People very much like having the feeling of influence in an instantaneous fashion...

[Peter Mantice]

I have been a volunteer at the Tampa Bay Chapter of the American Red Cross for only three weeks. On my second day, I accompanied a team of 6 to greet a medical plane carrying injured Haitans bound for hospitals in the area. We waited for seven hours, and only briefly saw the refugees and gave them some water and care packages-and a stuffed bear to a little boy. The next night was different-I wasn't there, but our team was in the triage room, helping out where they could. By the way, there was only one paid staff there-the rest were volunteers. In fact, our chapter serves an area with a population of 2.5 million-with only 27 paid staff members. The rest are volunteers. The national headquarters in DC-which oversees all the branches in the US and coordinates all major disaster relief efforts, and much more-is run by a paid staff of 1500. Try finding an organization of that size in corporate America with only 1500 paid staff. 97% of the ARC is made up of volunteer staff. I say all this to give you a better understanding of the ARC. On my third day, I helped process $36,000 worth of checks that had come in as donations. If the check said anything about Haiti on it, it went into one pile. If it was specifically designated for another area, it went into another pile. If there were no accompanying instructions on or with the check-and there were plenty of those-they went into a separate pile. THEN-the donors from the last pile were contacted and were ASKED WHERE THEY WANTED THEIR DONATION TO GO-most said Haiti, so they went into the Haiti pile. Sure,we're not perfect-but a lot of good has been done by the ARC. Get to know your local chapter, maybe even volunteer-then, and only then in my opinion-can you have an understanding of what the ARC is all about.

[Saundra]

Kay

See today's post for help in choosing an organization to donate to for the Haiti earthquake relief efforts

http://informationincontext.typepad.com/good_intentions_are_not_e/2010/01/suggestions-for-donors-in-choosing-ngos-to-donate-to-after-a-disaster.html

[kay stonefelt]

well, what is the most effective way to give to aid the Haitian crisis? donors are busy, want to help, can't always do the research necessary for efficient use of funds. lots of conflicting info out there.

[Saundra]

Sasha,

Thanks for letting me know about your post and explaining your thoughts more. There are many areas where we are in agreement and I too feel that these types of debates are healthy for the industry.

[sashadichter.wordpress.com]

Saundra, thank you for this post and for your comment on my blog post. It inspired me to elaborate on my thoughts about Kiva and what they tell donors. My full post is here:

http://sashadichter.wordpress.com/2009/10/15/connection-not-deception/