Giving

The Power of One: My Experience with Kiva.Org

When you think of volunteering, the expression, “Think global, act local” may come to mind, right?

Volunteer at a soup kitchen. Walk animals for the Humane Society. Become a Big Sister. Work with Habitat for Humanity.

There are countless ways to get involved in your local community, but what if I told you there was a way to get involved, make a global impact, and you could do it at home in your jammies?

I first heard about Kiva.org when I was teaching high school Spanish. My colleague who organized the Spanish club asked the students what they’d like to spend some of their funds on. Instead of a Cinco de Mayo party or a video and pizza after school, one of the kids suggesting donating funds via Kiva.org to an entrepreneur in Latin America.

After that, I became hooked.

Who: Kiva gives funds to entrepreneurs all over the world, and more than 80% of them are women. Kiva likes to focus its efforts on women because they are more likely to suffer poverty in developing countries. With Kiva’s microloans, they are able to educate their children, renovate their homes, and have a greater impact on other local businesses.

There are currently almost 2,700 loans posted on Kiva, ranging from $1,000 to $30,000. The minimum crowdfunding commitment is $25.

What:

  1. Entrepreneurs apply for field loans from Kiva’s field partners (partnering non-profits who work directly with the loan applicants in the country).
  2. The field partner underwrites and approves the loan.
  3. The loan is put out for crowdfunding on Kiva.
  4. Once the loan has been funded, the borrower repays the loan to the field partner, who repays Kiva in turn.
  5. Kiva returns the money to the crowdfunders, who can either withdraw the funds or use them for another loan.

When: Founded in 2005, Kiva has helped more than 1.6 million entrepreneurs and raised nearly $1 billion.

Where: Kiva is currently distributing funds in 82 countries, from the United States to Zimbabwe to the Solomon Islands.

Why: This was a no-brainer for me. As an entrepreneur, I like to see others succeed in creating and sustaining small businesses. My very first Kiva loan was to a Haitian woman named Marie-Josiane who needed $1,850 to buy a supply of beans, rice, flour, and other staples for her market stand. The photo showed her looking extremely proud of her inventory, like she had control of her destiny thanks to the power of microfinancing.

The $25 I donated was repaid in $4.16 installments over 6 months. After which, I was free to do on and re-invest in another female entrepreneur in Africa.

Is Kiva.org perfect? No, it isn’t. While 97.1% of their loans are successfully repaid, almost 3% of the loans do not get paid. So there is a risk when you lend.

Some of the loan interest rates are pretty shocking. Field partners can charge over a 15% interest rate for repayments, which is I think is almost predatory. While Kiva’s investors don’t feel the difference, that definitely makes a difference to the entrepreneurs’ bottom line.

While it is a case of “buyer beware” with a small percentage of loans, I love Kiva.org and what it does to sustain local economies both here in the States and overseas. I love the idea of empowering women to take charge of their own affairs and lead their families to a place of economic environment.

Do you have $25? What are you waiting for? Hop on Kiva.org and make a difference today!

Have you ever helped out with an overseas charitable organization? What was your experience? Comment below!

How to Check Out a Non-Profit Before You Donate

TAX RETURNS!!! SQUEEEEEE!!!

I bet you can think of a hundred different ways to spend the automatic deposit or check that you’re getting from Uncle Sam, right? Are you saving it? Paying off some debt? Going on vacay?

Allow me to put a bug in your ear…Have you ever thought of giving some of it to a charitable organization?

I think a lot of us love the idea of giving back to a non-profit with either our time or our talent, but unfortunately the non-profit world is like the business world – you have to do your due diligence to make sure you are getting the most bang for your buck. Here are some simple tips to ensure your donation is going to a reputable organization, and that it’s not being wasted:

  1. Is the charity a 501(c)3? In order for your donation to be tax-deductible, it has to be registered as a 501(c)3, which is the IRS’ non-profit code. Go to IRS.gov to determine if the charity you want to donate to has this tax-exempt status.
  1. Examine the charity’s annual report. If the non-profit is truly transparent, they will have their annual report either on their website or will readily send it to you. If they have pie charts or bar graphs, you can literally see where the cash is going. If they are hemorrhaging money, that’s a bad sign. If they rely too heavily on volatile grants, that can be another red flag.
  1. Read the organization’s 990. The 990 is the non-profit equivalent of a 1040 that they file every year. This is where you find the real dirt. FoundationCenter.org is hands down the best place on the Internet to find out where the non-profit *really* spends their money. For example, the Los Angeles Opera Company spent $35 million in its 2014 filing. The famous opera tenor Placido Domingo made over $900,000 for being their general director, and the form even indicated he sometimes used first-class travel for “business purposes.”

The famous opera tenor Placido Domingo made over $900,000 for being their general director, and the form even indicated he sometimes used first-class travel for “business purposes.”

Wait, what?!

  1. Determine what percentage of their budget directly impacts programs. Continuing with the example of the LA Opera company, their 990 shows that $3.5 million went to the top eleven salaries. That’s equivalent to 10% of their operating budget. That’s a big percentage for such a small portion of their staff. I wonder what they pay their musicians…?

This isn’t an exact science, because of course non-profits’ biggest expenses are salaries. And people who work there deserve to make a living they are often hardworking and very underpaid.

But is an appropriate amount going to programs in the community? Are they making an impact among people you know or have heard about? Can the non-profit give you evidence of its footprint with statistics and press packets? Because if they can’t, something is probably fishy.

  1. Consider an in-kind donation. Give an old bridesmaids dress to a charity that provides prom dresses to those who can’t afford it. Donate books to a literacy center, or gently used toys to a shelter that takes in families. Or offer a donation to a silent auction fundraiser. That way you know your items go directly to support the organization’s mission, and receive a donation form come tax season.
  1. Or, better yet, give your time. Money is great, but time is even better. Play with shelter kitties. Cook a meal for soup kitchen. Pick up trash along a bike path. Do Meals on Wheels. There are hundreds of ways to donate your time and get some real skin in the game. Nothing will show your passion for an organization like the time you spend there. 

What non-profit is nearest and dearest to your heart? Comment below!