Charity 2.0

It is becoming harder and harder for charities to raise funds. There is an increasing public indifference to the endless lotteries, fetes and nude calendars trotted out by charities each year and general suspicion that the bulk of funds collected finance the administration of the charity rather than the intended recipients.

Whether these perceptions are fair is a moot point, but NGOs and charities could do themselves a huge favour by checking the following organisations out before their next big internet strategy meeting.

Kiva.org
Mercy Edogiawere is a 30-year-old woman who sells food and drinks in Benin City in Nigeria. She needs $400 to buy provisions in order to increase the turnover and profitability of her store. Normally this would entail a microloan from a local moneylender at interest rates of 120% or more, but thanks to Kiva.org and its field partner, the Lift Above Poverty Organisation, she will be able to raise the $400 and pay it back over eight months at a far more reasonable interest rate of 24%. Mercy’s loan is ultimately funded by Kiva.org‘s users, who pledge their money in $25 increments until her required loan is filled.

It’s a stunningly simple idea that works brilliantly. You open an account and fund it with your credit card or PayPal. It works in the same way as a stock trading account except that you are investing in real people and making a huge difference to their lives. You earn no interest on your loan (and neither does Kiva.org), but the field partner’s charge an affordable rate to the lender to cover their costs. Incredibly, 99,7% of all loans are repaid.

A large part of Kiva’s attraction is that it creates a one-on-one relationship between you and the person who is ultimately benefiting from the loan. You can track their progress on the Kiva blogs and actually see the difference that your loan is making in their lives, which makes the whole process a lot more rewarding.

Mukuru.com
Mukuru.com is a United-Kingdom-based site run by Zimbabwean expats that lets its users send money or buy petrol, cellphone airtime and, bizarrely, DStv subscriptions for their Zimbabwean compatriots. Once a friend or relative has logged on and paid for fuel, Mukuru.com sends an SMS with a 10-digit number that the recipient can exchange for petrol at selected service stations in Zimbabwe, a far more elegant solution than trying to send money via the country’s notoriously corrupt and unreliable banking system.

A large proportion of Zimbabwe’s population is reliant to some extent on money from the diaspora, and Mukuru helps to cut out the exorbitant middleman fees that are generally incurred when importing goods or cash into Zimbabwe. One of the other advantages of Mukuru’s service is the ability to track your transaction in detail from initial payment through to collection of the goods that have been ordered.

Toms Shoes and the OLPC laptop
Toms Shoes offers a simple proposition. Buy a pair of their shoes and they will give another pair to a child on your behalf. It’s an attractive way to assuage the guilt of buying yet another luxury item, and Toms Shoes sweetens the deal by providing videos of previous shoe drops on its site (its next big drop is next month here in South Africa where it is expecting to give away 50 000 pairs of shoes). Similarly, the One Laptop Per Child project announced their “Give 1 Get 1” promotion a few days ago that gives one laptop to a developing-world child for every $400 OLPC laptop that you purchase. These promotions work because there is a tangible benefit to your largesse.

None of these companies are charities in the strict sense of the word, but they are all using the internet and social media to personalise the experience of helping others and to ensure that the transactions are as transparent as possible — lessons that any charity can take to heart.

Link: Del.icio.us links for all of the organisations mentioned in this article