Comments on: Kiva.org & The Social Capital Markets II

By: Gabe Roberts

Gabe Roberts — Wed, 26 Nov 2008 00:28:40 +0000

Congratulations to kiva.org for having the principles to refuse money when they had not identified suitable funding opportunities. I take issue with some similar organizations for not doing this; take globalgiving.org as an example. $3.9M in revenue but only $1.6M was passed through to the grass root organizations and they show $511K in program expenses for tools, analysis, and evaluation of the projects before disseminating the $1.6M? After giving out the $1.6M and paying overhead, they still show a profit of $1.2M which was then loaned to a for-profit sister company (Many Futures Inc) which shares key executives with the nonprofit? They are sitting on $4.4M in reserves, all of which appears to have been loaned to Many Futures Inc … why not just give the money to the grass root organizations? Why does a nonprofit loan money to a for-profit?

I’m no financial expert but something appears puzzling at globalgiving.org.

Here’s their 990 from last year; tell me if I’m wrong: http://www.guidestar.org/FinDocuments/2007/300/108/2007-300108263-038cfd51-9.pdf

By: Sean Stannard-Stockton

Sean Stannard-Stockton — Fri, 03 Oct 2008 21:01:10 +0000

That’s an interesting point Tony. I’d never thought of Kiva as an educational tool for young people. But it could be a good tool for that.

By: Tony Searight

Tony Searight — Fri, 03 Oct 2008 20:04:07 +0000

Kiva.org is a great model for our Youth Investors in that it shows them third world entrepreneurs who with just a small helping hand, pulling themselves out of poverty in the form of a loan and not a donation.

http://www.tonysearight.zoomshare.com
Searight Investments, Education, & Entertainment For Youth And Families
A & P Searight Investment Group For Kids
THREE GENERATIONS CARE, INC.

By: Fiona Ramsey

Fiona Ramsey — Tue, 05 Feb 2008 04:30:01 +0000

Sean:

It’s exciting for me, as Kiva.org Public Relations Director, to read your comments about one of the most intriguing parts of Kiva’s model. I agree with your comment that “Kiva?s problems are a great example of how strongly donors respond when social capital markets are created” – which is an exciting indication of how far lenders/investors will take this!

A couple points of clarification:

Kiva.org does not consider DonorsChoose.org or GlobalGiving.org to be competitors. While these models are similar in that individuals can choose the specific project they would like to contribute to, they are donations, not loans, and Kiva only facilitates loans at this time.

One element of the Kiva model that is often under appreciated is that the platform operates 24/7, so a “shortage” that exists at one time, may not exist a matter of hours later. Kiva’s Field Partners update loans for funding from the developing world as they are received, they are translated and submitted to the live site as quickly as possible. So, we can literally have a site with no funding needs one minute, and thousands of dollars with of funding needed minutes later. This is the beauty of the Kiva platform – needs being delivered from the developing world. Real-time, real people and real needs.

Of course the flip side is that a potential lender can come to the site and not find any lending opportunities at that time. However, that’s what makes the site so “addictive” for many lenders. Because you don’t know what needs will be listed an hour later, and find yourself checking back hours later to get an update.

One additional comment: there is not a shortage of people in need of a loan. What there is, is a bottle-neck. Kiva.org undertakes a significant due diligence before partnering with any microfinance institution, and it takes time to both satisfy Kiva.org’s due diligence and train MFI staff on the Kiva system. As such, the Kiva.org partner portfolio is not growing at the rate of our lender community. The other solution to building our partner portfolio is to increase the amount of funding each partner can raise (each partner has a monthly fundraising limit), but that simply wouldn’t be responsible. Kiva.org is committed to creating an online microlending platform that helps MFIs to scale only at a rate that is healthy for both the MFI and Kiva.org.

On a personal note, watching these “shortages” occur excites me because it sends a strong message to our Field Partners, that Kiva Lenders believe in their work and wish to support their programs, and to developing world entrepreneurs, that Kiva Lenders are supporting them from over 70 countries in the world, and want to give them a chance to be successful entrepreneurs.
As you said, Sean, this is a “great example of how strongly donors respond when social capital markets are created.”

Fiona Ramsey
Public Relations Director
Kiva.org

By: Reza

Reza — Fri, 01 Feb 2008 23:41:21 +0000

Dear Friend,
A group of researchers at University of Nevada, Las Vegas, are investigating effects of Weblogs on “Social Capital”. Therefore, they have designed an online survey. By participating in this survey you will help researches in “Management Information Systems” and “Sociology”. You must be at least 18 years old to participate in this survey. It will take 5 to 12 minutes of your time.
Your participation is greatly appreciated. You will find the survey at the following link. http://faculty.unlv.edu/rtorkzadeh/survey
This group has already done another study on Weblogs effects on “Social Interactions” and “Trust”. To obtain a copy of the previous study brief report of findings you can email Reza Vaezi at reza.vaezi@yahoo.com.

By: Peter Panepento

Peter Panepento — Fri, 01 Feb 2008 02:09:22 +0000

Sean:

This is an interesting analysis and you raise some important questions here.

I invite you and your readers to raise some of these questions directly with Kiva co-founder Matt Flannery, who will be taking questions on Tuesday, Feb. 5 at noon Eastern time as part of a live discussion sponsored by the Chronicle of Philanthropy.

You can find out more at http://philanthropy.com/live

Thanks