n Kiva’s defense, its behavior is emblematic of fund-raising in microfinance and charity generally, and is ultimately traceable to human foibles. People donate in part because it makes them feel good. Giving the beneficiary a face and constructing a story for her in which the donor helps write the next chapter opens purses.
Our sensitivity to stories and faces distorts how we give, thus what charities do and how they sell themselves. What if the best way to help in some places is to support communities rather than individuals? To make roads rather than make loans? To contribute to a disaster preparedness fund rather than just respond to the latest earthquake? And how far should nonprofits go in misrepresenting what they do in order to fund it? It is not an easy question: what if honesty reduces funding?
The big lesson is that the charities we observe, the ones whose pitches reach our retinas, are survivors of a Darwinian selection process driven by our own minds. An actual eBay venture called MicroPlace competes with Kiva; but MicroPlace is more up-front about the real deal. Its page for sample borrower Filadelfo Sotelo invites you to “invest in the organization that helped Filadelfo Sotelo: Fondo de Desarrollo Local” (FDL). This honesty is probably one reason MicroPlace has badly lagged Kiva. Who wants to click on the FDL icon when you can click on a human face?
There is no end to the desire for wealth. Recently, I asked an entrepreneur, whose net worth is in the nine figures, if he thought greed or pride was a greater problem. He said greed has no end and that he knows people who are unhappy with their private Gulfstream jet because they have friends whose jets are slightly better. . . .
I once visited a microfinance loan group in Manila. These people were poor. We were in a one-room house. It was raining and water was pouring down the wall and flowing across the floor. At the end of the meeting, they took up an offering for “the poor in their community.” The total was $2.80. They made a vat of porridge, took it to the center of the slum and within minutes children were emerging to eat. Several were obviously malnourished.
We are in a global economic crisis because of this: The rich see the very rich and want to live like them. The poor see the very poor and want to help them.