My Last Word on the Kiva Controversy

by Nathaniel Whittemore

category: Dissent

Published November 12, 2009 @ 12:59PM PT

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The controversy around Kiva's marketing reached a new level earlier this week when an article appeared in the New York Times titled "Confusion Over Where Money Lent on Kiva Goes." For those who had been following the story, there was nothing particularly new. But because it was in the New York Times, it's gotten a whole lot more traction. Personally, I think it's time we moved on. To that end, here's my last word on it.

1. (Most Important) Do the people on Kiva actually get the money? The answer is yes, and this is why despite all the ruckus and important questions about transparency, I think Kiva should come out of this with our support. The difference between perception and reality is about the flow of capital. The way it actually works is that Microfinance Institutions make loans to people before their pictures go up on the site. The money donated goes to those MFIs to support the loans they make. Kiva borrowers DO get the money they're promised; where you, as a loaner, come into the equation, is just a little bit different than some thought. For my part, I think that their actual process is the correct one for maximizing efficiency, for the reasons CEO Matt Flannery articulates here.

2. Do I think that Kiva messed up? I sure do. This one has been a bit difficult for me to blog about because while Kiva is one of my favorite nonprofits in the world, I think this was a tremendous goof. There is no more important capital in today's world than trust. And there is nothing more important for a site like Kiva than to create a compelling giving experience. By fudging the perception, or at least not working too hard to change people's misperceptions that ended up being advantageous (depending on how you look at it), Kiva has lost the trust of some of its lenders, perhaps irrevocably.

3. Do I think our whole sector bears some responsibility? Absolutely. The myth that Kiva allowed to flourish played into the deepest, most gut level challenge for the nonprofit sector.

We all want to feel that our particular efforts have done something tangible and knowable for the world. As human beings we carry around our imperfections, our hopes, dreams, and desires in a confused bundle. When we're offered the opportunity to do things that are unequivocally good, we tend to jump at the chance. When we're affirmed and told how our specific efforts have created a specific change, we can often reset our expectations to only want that sort of experience.

The reality of the world is that the contributions we make as people are a messy, confusing combination of daily actions and life time pursuits. The jobs we create, the people we make smile, the charity we give, the family we protect - these are all part of our contributions.

There are some instances where we can know our impact in real time. Helping friends and family is the most obvious, but with the onset of the internet, there are newer opportunities to extend that real time knowing further than ever. Ironically, despite the fact that a farmer in Uganda is not standing at the Microfinance Institution's door waiting until your check clears, the giving experience that Kiva provides is still dramatically more engaged and tangible than most of what people have experienced since the advent of charity that extended beyond people like ourselves some two hundred years ago. Indeed, one of the ironies of this whole thing is that even David Roodman, the researcher who wrote the original post that kicked this whole conversation off thought that the problem was communication, not impact, because the actual practice that Kiva was engaged in made the most sense for the people they were trying to help.

I worry that the donor community has become addicted to an illusion, or, if not an illusion, at least an irregularity.

Most of the good we do in the world will not be knowable, direct or tangible. The sooner we embrace it and use our whole selves and our whole lives to contribute rather than vainly seeking the fleeting moment of compassionate triumph, the more we will help good organizations and good efforts succeed without contriving to mislead (or at least not inform) donors.

4. Do I still think we should support Kiva? Unequivocally yes. Kiva is a young organization, and one of the first to really harness the internet to extend the experience of giving in dramatically new ways. In my mind, they may have goofed on the trust that they have with their lenders, but they have not undermined the trust that we must have in any nonprofit to be committed to delivering the services it promises in the way that most effectively helps the people it's trying to serve. They've changed their communication, they're proactively seeking to rebuild trust with lenders, and at the end of the day, the amount of good that has been done through Kiva remains immense.

This has been an incredibly important chance for us to learn about the importance of trust between nonprofits and donors, and to ask hard questions not just of our institutions but of ourselves.

But we have a lot of good left to do, and at least for me, I think it's time to move on.

(Photo: A farmer in Mbale, Uganda explains how he has made use of microloans and local training programs to add additional crops, from nlw)