Kiva and the Future of Poverty Relief

Kiva has initiated something not far short of a true paradigm shift in donor relations; everyone else would be wise to pay close attention.By taking a model with some similarities to traditional child sponsorship (as World Vision and Compassion are well reputed for) and taking full advantage of the immediacy of the internet, Kiva has made philanthropy accessible and compelling for average donors in ways that go beyond what even the deepest pockets used to reach.The most significant misconception about Kiva is that they provide loans to poor entrepreneurs. In fact they are essentially a middle man, connecting donor dollars with recipients through the use of established MFI's (MicroFinance Institutions) who issue and administer the loan process. One of their partners on the ground is also one of Catalyst's Strategic Partners: Opportunity International.To begin understanding how all of this works, and more importantly the meaningful distance it makes, read this recent article or Kiva's blog response to some of the recent inaccurate media criticism.More than that though; Kiva has set this new standard of interactive philanthropy:

Kiva's influence extends beyond microfinance. Compassion International program director Bill Keen said one of Kiva's advancements is linking like-minded groups via social networking sites. Compassion, known for child sponsorships in 25 countries, is testing that principle with a site that will enable child sponsors to form similar networks. In addition, the ministry may start posting stories of projects its 5,000-plus church partners are involved in.

There are some risks in more direct relationship between donors and recipients, but for those who desire to be doing more than writing cheques and waiting for annual reports Kiva is something special.