The Power of a Human Face

The nonprofit microlending organization Kiva has recently been in the news for less than flattering reasons. Essentially billed as an organization that links individuals (such as you and me) with burgeoning small business owners in the developing world who are in need of a loan, Kiva's hook was in adding the illusion of person-to-person contact. Donors literally believed that their small loan was going to the project and the person of their choosing: a woman creating a sewing business in Mozambique for example, or a local group creating a sustainable farm in Uganda. Much like those sponsor a child programs, there is something uniquely heartwarming in thinking our dollars were going to a specific person or group.

The reality (which admittedly was all readily available on their website), is that the money does not go to a specific entrepreneur but rather goes to creating a general microlending funding structure (much like Grameen bank). Fundamentally, nothing has changed, perception wise the recent uproar indicates that much has changed.

It turns out that Kiva is not the only nonprofit organization guilty of creating such misperceptions amongst its donors. Many of those nonprofits that encourage people to help a family in the developing world by donating money to purchase a family of geese or a milking cow does not always turn those donation dollars into an actual goose or cow. The money, which in part does go to purchase livestock, can also go to help with operating costs. A reality that doesn’t feel as heartwarming as believing we helped a family get its first cow.

Similarly, not all of the dollars collected in those sponsor a child programs goes directly towards maintaining the welfare of that child. Some of the money has to go to maintaining programmatic costs such as finding the children, making sure that the money is going to support their well being, and recruiting new donors.

In a culture that seems to value an almost ruthless sense of honesty, these obfuscations seem to have a thin veneer of bait and switch. But on a deeper more practical level, I’m hard pressed to say more than “so what?”

I’ve worked for non-profits and the reality is that getting donors to donate money for operating costs is nearly impossible. Donors want to fund projects they don’t want to hear that their dollars went to buy stamps. At the same time however, without funds for operating costs the projects that people happily donate their dollars to would not exist. Buying a goat or helping a specific person pulls at our purse strings and gets us to donate in a way that helping to pay a living wage for a secretary in San Francisco (where Kiva is based) doesn’t. But without that San Francisco secretary there would be no way to make the connection to that burgeoning business person in the developing world. There is no evidence that Kiva or any of these organizations are using their donor dollars in ways that are not in keeping with the spirit of the donation and in my opinion the transparency issue is moot as it was all clearly listed on their website. Donors simply chose not to read the fine print.

Kiva found a hook to get even the most jaded amongst us to open up our wallets and thousands of people have benefitted. All I can say to that is… where can I donate?