Thursday, July 5

this redistribution of wealth is easier than i thought

once upon a time, i worked for one of those groups that hire activists. you know, those people who stand on the street corner opposite the homeless with a clipboard and way too much optimism? i fell for the ad and wanted a summer job to save the world. i was working on behalf of the wwf (this one, not that one), but they were also gathering signatures for save the children. i was not any good at it. i'm enthusiastic, but i'm not really a salesman... i can believe at you that this is something great, but you might not buy it. you'll listen to be polite, maybe ask for my phone number at the end. it felt very ineffective. so this is how i think of people who work at saving the children... well-intentioned, but not probably doing much actual saving much of the time. mostly they seem to walk around in front of barefoot, emaciated kids for cameras. industrial begging, with a spokesperson and everything. this has always turned me off. you put your capitalism in my charity, i thought. i didn't want to sit at home each month and send a pittance to someone who really needs a functioning country with infrastructure... receiving in return a letter to let me know just how bad it is. i wanted to do something though. something that didn't make me feel like i was taking up the white man's burden, when all i'm trying to do is return a semblance of fairness to the world. that's when i found kiva.

kiva is a microlender portal. instead of making a system to distribute resources themselves, kiva uses the ones that are already there. from what i've seen, it looks like the biggest problem facing the world's poor is access to capital. the banks don't lend to people who aren't already wealthy. their interest rates would make you choke. this seems to be true in mexico, the middle east, africa, south america, eastern europe... there is just no way to pull yourself up by your bootstraps, no path to middle class. and in the absence of social services, there is just more squalor and more sickness waiting to catch you and keep you from succeeding. and it seems like the market is just trying to keep it that way. walmart doesn't go to china to free people from wage slavery, but to take advantage of it. i do what i can to try not to encourage such things, but i feel like negative influence doesn't go far enough. these people need to be employed by somebody... and finally someone is trusting them to figure it out themselves. all kiva does, is enable you to lend money to someone across the world.

so why lend rather than give? well, i could give money. and i could feel good about that. most of the charity services really do ask for a pittance. and what happens to it?

Save the Children has learned that one of the most effective ways of helping children is to combine sponsorship gifts with those of other sponsors and donors- rather than giving them directly to your sponsored child- to support programs that help make life better for many children in the communities receiving sponsorship funding.

it doesn't take much money to make a difference. but what kind of difference should we make?

Experience has taught us that combining funds to implement programs are a more effective way to help children than direct handouts.

it reminds me of programs here for our homeless. and i know that sending money is what's needed, but i want to do more than just enable someone's existence. i don't want to just imagine them all begging. i want to do something empowering. something like this:

By choosing a business on, you can "sponsor a business" and help the world's working poor make great strides towards economic independence. Throughout the course of the loan (usually 6-12 months), you can receive email journal updates from the business you've sponsored. As loans are repaid, you get your loan money back.

wait a sec, aren't i a giant hippy? am i really advocating for lending money to businesses instead of giving money to babies? yes i am. babies don't need money... they need a family, then a home, then a school... they need stability. this comes from the community. that's why i've decided to start there instead of with the babies. these people don't need money either, they need an opportunity. each person on kiva is just waiting for someone to tell them yes, you can. that is all the loan does; they don't need it forever, it's just the spark that allows them to light their own fires. and the beautiful thing is; as each loan eventually gets repaid, you can lend the money to the next person and the next and the next... instead of just feeling like it is siphoned away to nowhere, to be spent on projects you've never seen. kiva sends 100% of what you loan to the lendee. they take no percentage, so i don't feel like i'm supporting a charity industry in addition to the charity. this is because they have taken advantage of the microlender system that already exists in these countries. not only have they saved on the r & d, but by actively seeking partners with lower interest rates than the average local rate, they drive down the interest rates at large. we can sneak our charity into capitalism. and maybe freedom into what was once just a free market.


The County Clerk said...

Now this is interesting. I'd heard of this before but never more than "microlender" - so I didn't know what the story was... and I didn't look into it.

I will now.

Thanks for putting this out there. This looks good.

bs said...

thanks! i have three loans out now, and i can go check my portfolio and see journal entries the loanees have written. i've been really enthused by the experience.