November 15, 2009

kiva's transparency problem

my talk at TED India was especially targeted toward the leaders of social enterprises seeking support from generation y, a particularly timely message for i explained that a comprehensive online presence is table stakes, and to really win over the next generation of philanthropists, an organization must embody transparency (make it easy for us to figure out exactly where our money is going) and problem solving (solve the core problem / teach a man to fish).

i was only able to speak for a few minutes -- TED curators ensure speakers adhere strictly to time constraints -- but if i'd had more time, i was going to speak briefly about kiva, an organization i thought embodied those principles to a t. ultimately, the example got cut from my speech in the interest of time.

i'm now glad i did not hold up kiva as an example of transparency in a video that will live in perpetuity on the TED website. i would have been quite embarrassed...

just days later, stephanie strom's article about david roodman's blog post dropped in the new york times. it unearthed the controversy regarding kiva's disclosure of where lenders' money goes. it turns out that $25 lent "directly" to an entrepreneur doesn't actually go directly to her. it appears that kiva has a model similar to that of heifer international (another organization i love, by the way), where donors give to support a micro-cause -- a specific person or a specific animal -- but in reality, their money doesn't exactly go to that recipient.

i admit, i'm very disappointed to learn that i was wrong about kiva. i still respect kiva a lot, and i'm proud to have supported them in the past. i completely identify with the need to make charitable models easy for donors to understand -- it's a prerequisite for widespread engagement. that said, this debacle sheds light on an important lesson for all social enterprises: obscuring the truth about your financial model, even if benignly, can get you into trouble. like i said:, so important.

1 comment:

Farandthepeoples said...

Good take - completly agree on all counts - it's still a great charity and how they bounce back from this will show the true character of this organization. By the way - seems like your blog is rolling very nicely.