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Home Philanthropy Kiva Micro Loans vs American Red Cross Donations – Kiva WINS!

Kiva Micro Loans vs American Red Cross DonationsKiva.org is better than the American Red Cross! Yep, I said it and now you can send me hate mail. Before you hit send, let me explain why I think Kiva micro loans are a better alternative in comparison to American Red Cross donations.

 

Let me first say the American Red Cross is a great organization. They help millions of people each year affected by natural disasters and personal crisis. They provide disaster relief assistance, support American military families,  host health and safety services, sponsor a humanitarian network in over 180 countries, and provide more than 40% of America’s lifesaving blood supply.

 

The American Red Cross makes a huge impact by leveraging donations and volunteers to deliver on their mission and fundamental values. However, the Red Cross relies on your generous donations to continue their humanitarian efforts. This is where the American Red Cross, and nearly every other non-profit charitable organization, falls short in my opinion.

 

We’ve all heard the term “Give a man a fish and he eats for a day. Teach a man to fish and he will feed his family for lifetime”. With non-profit donations, you are essentially giving a man a fish. Once the donation is made and the money is spent, that’s it. Another donation must be made in order to sustain. Volunteers receive a rush of endorphin’s and the individual receiving the donation has their need met. But what happens the next time they need assistance?

 

I understand the American Red Cross helps those in need during times of personal crisis or disaster. This is not a good time to “teach a man to fish” and it is appropriate to remedy the situation promptly by throwing money at it. I often wonder if this is the right solution though. Is it better to be proactive or reactive? Everyone wants to help, but how can we focus on building and educating all underdeveloped  countries in our global community? What if we could help impoverished countries self-sustain and prepare for times of crisis? With 501(c)3 non-profit organizations like Kiva, this possibility can become a reality.

 

I’ve been following Kiva.org for some time and I couldn’t be more impressed. Kiva lets anyone loan as little as $25 to help people across the globe. They use the power of crowdfunding and micro finance  loans to provide people an opportunity to self-sustain, ultimately creating commerce and contributing to an improved economy.

 

This is how Kiva works. If you are a person who passionately wants to help others self-sustain and pursue a better quality of life, create a free Kiva account. Now, browse loan requests until you find one you like, and donate as little as $25 or as much as the entire amount of the loan. Kiva then combines the funds donated by the lenders and via a Kiva field partner, they distribute the funds to the loan requester. This is where Kiva is different than most non-profits. Rather than treating these as one-time donations, Kiva requires the borrowers to pay back their loans. Rinse and repeat, the money now comes back to your Kiva account where you can then make a loan to another person in need. Think about the power of this philanthropy model where your $25 has the potential to impact dozens, even hundreds of lives.

 

Kiva was founded in 2005. In a short amount of time, Kiva has created a crowdfunding micro-finance network with over 840,000 lenders who have contributed $369 million in loans. Want to hear something even more impressive? Nearly 99% of the loans are paid back!

 

So what do you think? Is the Kiva micro loan repayment and redistribution model more effective than American Red Cross one-time donations?

 

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