Joyce Meng's Blog

Enabling Clarity in Charity

The article in the New York Times "Confusion over where money lent on Kiva goes” flags some key issues about transparency that ought to be considered carefully. Every online giving marketplace strives to introduce a one-to-one connection between donor and recipient, but often times, a false sense of security results, especially since cash funding is by definition fungible. As the article points out, even though you may donate money to support an enterprising group of women in Peru, there’s no way to guarantee your money isn’t just being used for general business purposes of the sponsoring MFI. Hence, the question surfaces, if that one-to-one connection is merely a illusion, then what’s the purpose of an Internet microphilanthropy site if donors can just support the work of partner organizations such as the Grameen Foundation, Microplace, and Acción directly?

I certainly don’t claim to have all the solutions, but some of the processes and strategies that we’ve implemented at Givology (www.givology.org) may help elucidate some ways to make these connections real. After all, the purpose of internet Microphilanthropy is to enable clarity in charity by introducing transparency and granular reporting – we certainly don’t want to mislead our supporters! The NYT identified the controversies of peer-to-peer charity, but I don’t want this article to cast doubt on the relevance and importance of letting this sector of philanthropy grow.

Rather than just debate generalities, I’d like to focus on specific solutions to address the issue of transparency, integrity, and in essence – honesty – in Internet microphilanthropy. When we first launched Givology, transparency was one of our core values and we spent a long time figuring out the best way to make sure that we’re abiding by our principles as fully as possible. As a result, we’ve identified four different ways to circumvent the challenge of money being used for purposes other than the indication.

First, we partner with small-scale grassroots organizations, rather than large foundations – that’s where we can make our largest value-add. Most of our partners are highly localized within their respective communities and maintain close relations to all the students they support. They have the time and the resources to provide us with information and are fully committed to developing project and student profiles carefully, as $500 can be a very large sum of money to them. Very few of our partner organizations have operations in more than one region of a country, thus allowing them to focus. Most importantly, because our partners are small-scale grassroots organizations, Givology is an important resource to raise awareness and funding. Many of them don’t have the skills or resources to develop a sophisticated website or the infrastructure to manage small donations, so we play an important role in helping them tap into new networks to magnify their impact. Perhaps a billion dollar foundation is more apathetic to committing fully to using funds raised through microphilanthropy in the specific manner as published on the site, but a small grassroots partner that has incorporated Givology in the planning process is much more likely to follow through. I’m not disputing that Kiva is an important partner to the Grameen Foundation or to Acción, but both of those partner organizations have so many distinguished grants, private, and corporate donors that they aren’t nearly as dependent on the source of funding raised through Kiva. Hence, in my humble opinion, the real value contribution of a P2P community like Givology for both the donor and the partner organization is two-fold. For the donor, Givology identifies innovative grassroots organizations that are worthy of support and allows them to track their impact. For the partner organization, Givology connects them to resources for awareness and funding that they otherwise would not have.

Second, we commit partners to very specific updates. As you can read from our student updates and project updates, we receive very granular information from our partners about the progress of the specific student and project. In every partnership agreement, our partners commit to using funding in the way that they have described in the project or student profile. Although it’s true that we can’t guarantee that they will always follow through, the specificity and the granularity of the updates suggest that something very concrete has been implemented in a fashion as outlined on our site.

Third, we allow donor messaging – anyone can send a letter to a student encouraging him or her to continue schooling, or asking how he or she used the scholarship money. Our ultimate aim is to really develop that one-to-one relationship, promote cross-cultural exchange, and allow both donor and recipient to inspire each other. It’s such a shame that not many of our donors use this option, even though it means so much to our sponsored students when they receive letters from Givology! For example, take a look at the wonderful letter written by Yincong Fan who addressed a letter specifically to Danielle, a donor in our community who took the time to use our messaging function. When donors don’t send messages, our Givology translators fill the gap in writing a personalized letter. The effusive, empowering messages that we get back just serve to remind us how important it is to provide emotional support, not just financial support. For example, take a look at this inspiring letter from Shangui Yan! Whenever I’m feeling down about my own midterms and problem sets, I re-read his letter and feel inspired to never give up – if he can keep trying under such hard conditions, then so can I! Now on this point, Kiva mentioned that one concern was the legal aspect to preserve identifies. That’s a huge concern for Givology, and we’ve done as much as we can. We keep the location of the child very general, use pseudo-names upon request, and never give any addresses out to a donor – all letters are delivered and sent through our team, and we keep the highest degree of confidence.

Fourth, we admit mistakes when they occur and never promise more than what we can deliver. We’ve had instances in which we learned that due to adverse circumstances, a student dropped out of school. Immediately, we sent a letter of notification to the donors and refunded the money. We’ve also admitted when certain partner organizations don’t meet our standard for transparency; in such a case, we’ve de-listed them as partners. As the article in the NYT highlighted, the problem wasn’t the strategy of Kiva and GlobalGiving, it was the lack of clarity on how the one-to-one donations and lending actually worked. To be honest, I think it’s a travesty that Global Giving cast a for-profit project as a non-profit project to donors! I know at Givology, we’d rather just admit our mistakes and apologize sincerely rather than try to mislead or misinform (even through omission).

We’re certainly not perfect – far from it. In particular, it’s true that sometimes even if the funding isn’t fully raised online, we’ll pull every string possible and make every effort to ensure that the student still manages to go to school. We wouldn’t want it any other way! We tell our partners upfront that we can’t guarantee the timing of donations – as committed grassroots organizations, they understand, having battled with funding concerns for years. That’s why we’re launching chapters and getting donors to hold microfundraisers in their own community to help us smooth out our online donations. In very urgent cases, we’ll scramble and make the capital contribution before the money is actually raised online and then repay our own coffers. In such a case, the project is still a 100% wholly Givology-sponsored project and the donors know that their money is being used specifically for that purpose.

Let me highlight a recent example to clarify. For the last 15 years, the Peace Primary School in Kampala, Uganda has delivered free education and comprehensive care (medical treatment, housing, emotional support, clothing, supplies, etc.) to children who otherwise would not be able to afford the cost of schooling, many of them AIDS orphans. Despite 15 years of inspiring work in the community, the school faces eviction in December 2009. If we don’t get $10,000 together, 200 students will have to leave school. So, even if we’re not close to target in December 2009, we’ll just scramble using our reserves and then wait for eventual repayment from our donors.

As many of you know, Givology is a 100% volunteer-run organization. I’m one of the founders and the CEO of Givology, but I’m also still a student myself. Frankly, many of us are still strapped for cash with our own student loans, but all of us believe in the importance of enabling students from around the world to benefit from the transformative power of education.

Education opens doors – we all have so much to give, and in the process of giving, we form connections and learn something about ourselves. That’s why our motto is “Learn to Give, Give to Learn”.

To summarize, where does the value add of peer-to-peer philanthropy come from? Well, first, from creating a community – we have blogging, messaging, group blogging, among other features. Second, from democratizing philanthropy and introducing greater transparency. Through Internet microphilanthropy, it’s no longer the big donors who have voice and inclusion in the activities of a charity. No matter the size of the donation, the act of giving can be participatory and engaging for everyone – every Givologist has the opportunity to track his or her impact and get involved! The NYT flags some controversial concerns, but I do believe that in the long-run, the challenges are surmountable and that P2P philanthropy is a sector well deserving of further attention.

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