I found choosing among these organizations still challenging; hopefully, I can save you some of that effort. Here’s information I gathered on one while researching the field.

Overview

In 2006, CEO María Otero spoke at Google.org, about ACCION’s history and approach.

1. 01:38 – Background
2. 08:10 – ACCION’s approach and anecdotal history
3. 14:23 – Linking microfinance to traditional banks
4. 24:47 – Technical assistance
5. 26:50 – Equity funds
6. 28:40 – Summary
7. 37:54 – What differentiates microfinance organizations?
8. 42:20 – Does ACCION market entrepreneurship?
9. 46:05 – Are women better borrowers?
10. 51:13 – What’s the next breakthrough?

Some Numbers

ACCION started microlending in 1973, now it:

• sets up and supports microfinance institutions in twenty-three countries
• 2.4 million borrowers today
• 1.57 million through partners
• four star rating from Charity Navigator

Choices

There are many network support organizations; in 2004 the Consultative Group to Assist the Poor compared thirty-three in What is a Network? Diversity of Networks in Microfinance Today:

This graph from the report shows ACCION, and most, serve borrowers in multiple levels of poverty.

Elsewhere

The Economist covered ACCION in From charity to business, MIXMarket has a brief profile, and GuideStar has the 990s. ACCION is on ChangingThePresent and mapped on Xigi.

[…] 8% of donations provide food, shelter or other basic necessities. At most, an additional 23% is directed to the poor […]

The rest went to education, health-care, arts, religion, etc. She also cites a Bank of America study:

[…] people who earn more than [US] $1 million per year give only 4% of their donations for basic needs and an additional 19% to other programs geared toward the poor.

I don’t know of either study, if you do, please comment with a link or reference.

Bank of America’s Study

I did find a 2006 study, by the Center on Philanthropy and the Bank of America, Study of High Net-Worth Philanthropy, that covered households with incomes over USD 200,000 or assets over 1,000,000. They reported 5.2% (6.5 billion) donated to basic needs.

These donors gave 27.8 billion to religion, i.e. 22%; the rest of the population gave 60% to religious organizations. But, they reverse roles on basic needs, the wealthy gave 5.2% v. 11% for everyone else.

Elsewhere

Todd Cohen covers this in Google finds disturbing charity gap on Inside Philanthropy, with interesting data on overall personal and foundation giving in the US.

Critics put trendy poverty lenders to the test, and find they’re neither a real business nor a real help.

Margolis cites two “ wonk” studies and an essay:

The Myths and Magic of Microcredit

This was presented in June, 2006. I don’t know the message delivered then—considering only the slides, I see an optimistic review of microcredit and microfinance experiences:

1. The poor need more than microcredit, i.e., microfinance
2. Reducing poverty through microfinance is possible, though not easy or straightforward
3. Microfinance isn’t a panacea for post-disaster redevelopment
4. There are “interesting” technical developments in microfinance, e.g. using smart cards and ATMs

Money Is Not Enough: Social Capital and Microcredit

Referencing this paper by Angelyn Zephyr is stranger, it’s about the relation of social capital to two US microcredit initiatives, the Women’s Self-Employment Project and the Southern Good Faith Fund. Each attempt met some failure and resorted to traditional US approaches, i.e., business training, background checks, etc.

Zephyr thinks lack of social capital among US poor eliminates a microcredit strength, i.e., peer pressure against defaulting. But, Grameen 2, implemented years before this paper, doesn’t espouse that pressure—a change also noted in The Myths and Magic of Microcredit.

Microfinance Reconsidered

While I couldn’t find this one by Thomas Dichter, the Cabot Institute has a February, 2007 essay from him, A Second Look at Microfinance—maybe what Margolis was referring to. But I hope not, it’s a comparison of the economic histories of rich countries, which still have serious poverty problems, to the use of microcredit for developing Dichter’s idea of “real businesses.” Still, it’s worth reading as exercise for the facial muscles:

As many practitioners of microcredit (including this author) have learned, however, money is fungible—it can be used for anything.

Becker-Posner

Margolis cites Richard Posner’s post in The Becker-Posner Blog, Microfinance and Third World Poverty and Development, interesting and coherent skepticism also commented on by Gary Becker, but not a “backlash.”

Bosna i Hercegovina

All I found, where Milford Bateman refers to a “bazaar economy,” is The informalisation of the BiH economy and the role of the microfinance model, a bitter and fascinating review of the negative results of microcredit in Bosnia and Herzegovina. This, more coherently than any other I’ve found, makes a case against microcredit.

As good as it gets?

As Margolis points out, there’s a disappointing lack of data on microfinance—ironically, given his disparagement of the study authors as wonks. Bateman’s paper is interesting, Becker and Posner have well-constructed opinions, and The Myths and Magic of Microcredit is a quick and interesting read. But, the Newsweek article points to nothing new or insightful, just examples of bandwagon jumping, reinforcing that economic understanding should first be of secondary effects, especially when governments meddle in markets.

[MicroPlace] is making microfinance loans available to the developing world in particular ―  Gary Briggs, eBay

[…] a web-based, eBay-like marketplace to connect ordinary people (with investable assets as little as $100) with microfinance entities that need capital. ―  MicroPlace

A companion

It looks like MicroPlace users will fund institutions, which would be an interesting companion to Kiva, where people fund individual loans.

When people remotely fund individual loans administered by a separate institution, i.e. Kiva’s Field Partners, I suspect local microfinance market forces are, ironically, weakened. If MicroPlace allows people to invest in institutions, they might access microfinance without that weakening.

A competitor

If MicroPlace competes with Kiva’s model of funding individuals, they would be the first and welcome for it. But, unless the competitors collaborate, the microfinance institutions costs could rise satisfying multiple partnership requirements and oversight.

Hopefully, this wouldn’t affect Kiva’s payment system; they have an arrangement with PayPal to process transactions for free and PayPal is owned by eBay.

Merrier

Whatever they do, MicroPlace is welcome to the party, it will only get better—and though Kiva’s model has some weakness from its strength, they’ll be an engaging contender for a long while.

The format will make it easier to update frequently and involve you. Take a look and tell me how to improve it or look at some of the other lenses, like Grameen’s on microfinance.

Become a fundraiser

Turn what you enjoy into a fundraising event with Firstgiving.

Crunch numbers

Download a distributed computing client, like BOINC, and contribute computer time to projects like FightAIDS@Home and Human Proteome Folding. Wikipedia has a list of projects.

10 More

Personal Finance Advice published 10 Creative Ways To Help Charities For No Money. They only err recommending eBay Giving Works, which uses MissionFish to process the donations at higher rates than others. Instead, sell items—on eBay if you must—and donate the proceeds directly.

Search the Web

Maki at Dosh Dosh has a great post about 14 Charity Search Engines that help you give money to charity for free.

And I bet there other ways to help without reaching for your pocket book. As with all things charitable: be creative, pragmatic, skeptical, and determined.

He has a point, the rich—and many of the rest of us—are greedy and power hungry. But, he’s criticizing the wrong group. Charities compete for customers, or donors, in the same market as businesses providing experiences of power and opulence.

The charities are providing a product everyone agrees should be in greater demand than competitors, but is not. The first suspects are the consumers, all cruel tyrants who find no pleasure giving. Or it may be the product, purchasers have already tried or analyzed it and found it lacking. Or the marketing may not inform them.

All are at fault. But, most importantly, the product is lacking. If the billionaires gave it all away tomorrow, I don’t think much would improve. Too many scandals, poor performers, bad ideas, and just plain too many.

The end first.

1. Commit to a giving strategy
2. Research with Charity Navigator
3. Give directly or with Network for Good
4. Before volunteering, examine extra earning potential
5. Volunteer with VolunteerMatch
6. Involve others in what you’re doing

Why give?

I don’t know. I am compelled to. Why anyone else would I can’t say. It’s not rewarding. You won’t find salvation. What you will find are cold statistics and brutal situations you’ll be powerless to change. Even when you give more than you can, kids will die in wars, mothers with AIDS, and fathers of hunger. But, if you’re compelled too, read on.

Which charities?

This is the most important question; how much we give isn’t so if organizations squander it on administration or help those not in need.

Most organizations are corrective or preventative. The corrective feed homeless, treat sick in developing countries, and close off stumps for children taken apart by ordnance. Preventative charities keep people from losing homes, inoculate them, and sustain peace. There are wonderful examples of both and the decision to support one approach, or divide resources between them, is a personal one.

Researching possibilities can be done on Charity Navigator and Google. If you use online networking tools, see whether anyone in your network lists your target organization in their profile—they’ve probably done the research.

Diversification is a topic I’ve not found good writing on. I focus all giving on just a few, but that approach isn’t pleasant—you’ll have to walk away from some cause: a kid with cancer, a woman moments from losing her life to hunger, or a homeless person’s last grasp at a roof.

What about microcredit?

Organizations involved in microcredit, lending to the poor, are not strictly charities. But, for those including supporting human rights and eliminating poverty in their goals, microcredit is an essential topic to explore. There are microfinance institutions that lend directly to the poor, such as Grameen Bank and Ahon Sa Hirap, Inc. and support organizations that establish and support microfinance institutions, such as the Grameen Foundation and ACCION (which provides institutional support as well as direct lending.)

I don’t yet understand microcredit well enough to offer practical advice other than to research the theory and institutions before supporting them; the basis of microcredit as an eliminator of poverty is not simple, some contend there’s little or no supporting data, and some institutions seem to be ignoring key principles.

How to give?

The ideal is directly: cash, check, or direct debit. Cards generally deduct a portion from the donation that ranges from two to five percent. Some charities offer a periodic direct debit, e.g., the Médecins Sans Frontières Field Partner program and Colorado Public Radio. These allow you to commit to giving more without requiring you have it all available now while avoiding the transaction fees from cards.

If a direct option isn’t available or practical, Network for Good can handle card transactions for most charities and allows you to pay the card fees yourself.

How much?

There is a right answer: exactly the amount you want to give. I don’t think it worthwhile to compare yourself to others in a competitive sense. But, it does create perspective to know what people are doing. According to JustGive.org the average U.S. household gives 3.1% of their gross income; households earning below $10,000 give 5.2%. There is a campaign encouraging Americans to Give Five—only the poor are listening.

If you do find value in comparisons, use percentage of disposable income. Jane may give more than John, but John has three kids and a mortgage to pay from factory wages, and Jane has no debt or dependents to support on a C-level salary.

Another factor to consider is tax savings. For people in the U.S., Charity Navigator has a Giving Calculator to estimate those. You may have more to give than you expect when taxes are considered. If you’re in the U.S., remember that the IRS now requires proof for all giving.

Volunteering

You can find opportunities to volunteer at VolunteerMatch. I think giving your time and skills is good. But, be sure you aren’t taking away from the charity by donating work that is less valuable than money you can’t earn and donate because you’re volunteering.

Then I subscribed Kiva’s feed: http://www.kiva.org/app.php?page=rss&action=businesses&status=fundRaising. Now I see dozens of borrowers being listed almost daily requesting loans from USD 150 – 1200, many with detailed explanations of their need, opportunity, and plan. Many are funded within the few hours that pass between the listing and my reading it. Very cool.

When institutions lend to the nearly-poor, they are helping—doing good. But, they’re not helping to eliminate poverty, because those that could help themselves were and those that cannot were not. We’ve had plenty of that—it’s the natural result in a market economy. What’s needed is the opposite—help the truly poor who cannot help themselves because of a systemic barrier like restricted credit.