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    June 29, 2009

    Kiva's Bold Move

    I had been hearing rumors about this, but while I was on vacation in Peru, Kiva, a nonprofit organizations that works thru combining microloans, and in my opinion, is an organization that is truly tuned into how a web/mobile driven audience wants to interact with it's charitable giving, announced the launch of a pilot project to allow donors to loan to entrepreneurs in the U.S.

    Here are a few things about this announcement that really caught my attention:

    1. A U.S. based charity, reacting to the economic crisis and the constant flow of dire news at home, has reacted by allowing donors to choose where their funds go (abroad or help at home). Why is this important? If you are an international relief charity, you know the answer. Now I am sure there are some of you out there who are doing swell in this economic environment, but most of you are struggling with one main problem: not only is donor giving declining, but when given the option of helping someone at home vs. someone far away, donors are, for the most part, choosing to be patriotic (TAG numbers back me up on this, not just pulling out of thin air).

    So, instead of hoping for the best, and forcing its donors to make a choice between continuing their giving with Kiva or turning to an organization with a domestic presence, Kiva has taken that choice out of the equation. What to help folks at home? Now you don't have to leave us to do so.

    2. It is amazing how quickly the organization was able to make the decision. Less than 5 years old, the organization has quickly shot up to the be the "darling" of what's "innovative" and "new" in the nonprofit community. But roomers has swirled about its financial stability, how long they can keep going with no admin costs taken out of the donations/loans, etc. You'd think with their feet barely firmly planted in the nonprofit ground, now would not be the time to rock the boat.

    Perhaps the decision reflects the youth of Kiva's decision-making team (us younger folk don't have a tendency to think and evaluate every possible consequence, or at least we are not so afraid of them) and the upside of having a young organization that has not yet been weighted down by endless nonprofit decision-making red tape. Imagine, a much larger organization making a decision like this. Imagine the endless board meetings, reports, more board meetings, reports, departmental meetings, consultants, accountants, impact studies. Even if the organizational leadership was truly committed, a change like this would take years.

    There are good reasons why these processes have been put in place. But seeing Kiva do this also makes one wonder about the pace of change that IS actually possible in the nonprofit space vs. the pace that we are all generally accustomed to.

    3. Having made the decision, Kiva has allowed its community to have a full voice in evaluating how the program is going. Kiva's groups have had endless discussion on the matter. I have seen emails floated around from loan groups decrying the decision. Others think it's a good thing.

    But the key point here is, the folks at Kiva are not trying to hide the fact that the pilot program is controversial. They are not trying to suppress donors' responses. They have made a decision to try something, but are also allowing donors an outlet to express themselves, which may actually assuage the dissatisfaction some donors might feel, but more importantly shows donors that Kiva is a transparent organization, open to having it's decision discussed in the open.

    This to me is really the key takeaway of Kiva's new venture. How open they have been about it and allowing donors to talk back without panicking and retracking.

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