Helping in two clicks: technology and charity

Helping in two clicks: technology and charity

Why use aid agencies? To ‘do good’ all you need is a phone and Google Maps. Amy Hall looks at ‘direct giving’.

An SMS tells people - in countries like Kenya – they can get their money at the local mobile money agent. © Ton Koene/PA Images

Zoran, 45, has two children and lives in Kosovo. He and his wife work all day, but, to make more money, he also grows vegetables to sell at the market. Zoran needs $1,700 to irrigate his greenhouse. If he borrows $25 from you, it could help him do that.

There are more than 5,600 other people or groups from across the world that you can lend money to through the Kiva website in a few clicks.

You can choose a borrower and say how much you want to lend. Local people eg. microfinance institutions (MFIs) or non-profits, then make the loans. When the borrowers pay the money back, the money goes back in your Kiva account and you can lend it again, donate it, or take it out. So far, nearly 1.5 million people have lent a total of nearly $12.2 million through Kiva.

These ‘microfinance platforms’ eg. Kiva, Zidisha or Deki offer this ‘direct’ approach to helping people in need. Others, eg. GiveDirectly, let you give money directly to people to do with what they think is best with it.

GiveDirectly finds very poor communities using public data. Then they find the people who need money most eg. after checking if their house has a grass or permanent roof. They can transfer about $1,000 to families using electronic payment systems, usually an SMS to tell them to collect the cash from a local mobile money agent.

These organizations get past traditional NGOs and give money straight to people living in poverty.

Like child sponsorship?

‘People are not so happy with charities now,’ says Deborah Doane, international development and sustainability consultant. ‘Often they have paid direct debits for 20 years but we still have the same problems.’

David Nichols, 27, from Bristol, has lent money through Deki, similar to Kiva, for about six years. This is now the main way he gives to charity. ‘I prefer to know where my money is going,’ he explains.

Many other people agree. 78 per cent of people in a British YouGov survey said they want to know more about how charities spend the money.

‘When you give to a large charity – a monthly donation – you don’t know the exact effect,’ says Doane. ‘This doesn’t mean NGOs don’t do useful work. It’s because it’s difficult to show some of what they do.’

But we still generally trust NGOs. The 2016 Edelman Trust Barometer found that trust towards NGOs across the world is at its highest level since the global financial crisis.

Oxfam has learnt from Projects Direct. It not has a direct-giving platform. People can choose from a list of community projects to donate to and get regular news from.

The marketing of many direct-giving and lending platforms is similar to marketing for child sponsorship. New Internationalist criticized this model in the 1980s and 1990s for many reasons: paternalism, choosing individual children, misleading donors, and not helping the basic causes of poverty and inequality.

HumansFor works with individual donors to help them find ways to give money that really do something about problems of power and inequality.

The internet gives personal connections and giving and lending money seem more democratic. And people like this. In Britain, the average online donation went up by 20 per cent from 2010-14.

But there are problems. People have criticized Kiva, for example, because it is not as ‘direct’ as it seems. The local microfinance partners lend the money before someone has donated it. And sometimes people who borrow have to pay a lot of interest eg. more than 20 per cent, (but the loans come from Kiva with 0-per-cent interest).

People say the people lending money should pay the costs of the intermediaries or MFIs, not the poor people who borrow. But Kiva the borrowers are getting better rates than they could get locally.

Another problem with GiveDirectly is that there can be some tension in communities, because some people get money and other people don’t.

And there is a problem with mobile phones. Men are more likely to have a phone than women. GiveDirectly says that borrowers don’t need a phone – they only need a SIM card. And borrowers can buy a mobile phone from GiveDirectly, as part of the loan.

Responsiblity

Adina Claire, from War on Want, is worried about how data is used to find people to help. ‘Where’s the data coming from? What about all those communities that you can’t find because we have no data? Those are the really poor communities,’ she says.

GiveDirectly has also had problems with people stealing money. The aid monitoring group GiveWell says that in 2014, two GiveDirectly staff worked with mobile money agents to steal $20,500. Since then, GiveDirectly has changed how they work to stop this being possible.

Julia Kurnia, who started Zidisha, another microfinance platform, has said giving money is not enough. She prefers microfinance - a small business agreement that people feel more responsible for.

Doane disagrees. ‘We need to think more about aid as a social benefit like welfare. You give it, then people are responsible for their lives and what they do with it. Some people will succeed and some people won’t.’

GiveDirectly is now doing a basic-income experiment. The plan is to give at least 6,000 Kenyans enough money for their basic needs for 10 to 15 years and then test the results.

These platforms are just some of the ways technology works together with charity. In 2014, 12 of the 50 people on the Chronicle of Philanthrophy’s list of the biggest US givers came from the technology industry. But sometimes it is difficult to see the line between making a profit and not-profit activities.

For example, Pierre Omidyar, who started eBay, also started the Omidyar Network to make investments in both non-profit and for-profit businesses. The Network gave Kiva $5 million in 2010.

There are close links with the very big, powerful technology companies. Google’s Global Impact Awards gave $3 million to Kiva in 2013 and $2.4 million to GiveDirectly in 2014. Google staff are on the board of directors.

Facebook co-founder Dustin Moskovitz and his wife Cari Tuna started Good Ventures and gave $25 million to GiveDirectly.

So how can someone with money to give decide who to give it to?

‘Look for organizations that are analysing and challenging the policies and power of our governments and global institutions,’ says Erdman.

‘It’s nice to make a connection; it feels good, but what effect does it have?’ asks Claire. ‘Development is not like online shopping.’

Amy Hall is a freelance journalist for New Internationalist.

NOW READ THE ORIGINAL: https://newint.org/features/2016/07/01/helping-in-two-clicks/ (This article has been simplified so the words, text structure and quotes may have changed).