Learning to Give: What *I* Can Do to Fight Poverty

In our recent discussion about tithing, I made a confession:

I do not tithe to church or charity. I feel guilty about this. My rationale is always: “Once I take care of myself, I'll take care of other people.” Yet what do I mean by “taking care of myself”? I don't know. Sometimes I think “once I've saved X, then I'll start sharing my wealth”, but X seems to be a moving target.

I've thought a lot about this over the past couple weeks. I've looked at my own life: I have a $10,000 emergency fund, a growing business, and no consumer debt. I own an 1800-square-foot home on half an acre, a car, and a pantry stocked with food. Despite all this, I still sometimes feel poor. I'm not. I know this. According to the Global Rich List, my wealth places me in the top 1% of the world population, and that will likely increase as I get older.

I have enough. I'm ready to share. But how?

Learning to give
I've written many times how important it is to start saving for the future, no matter how much you set aside. If you can only afford to save $5 a month, then start with $5. If you can afford $50 a month, start with $50. The key is to develop the habit. In time, most people find they can bump their saving rate higher — $10, $20, $200.

In our recent conversation about tithing, Kathleen M. urged me to consider using this same technique to develop the habit of giving:

If you do want to start giving regularly, start with something small, like $5 or $10 per month. A lot of people make a practice of giving the same amount that they put into savings.

Starting small with giving works the same as starting small with saving: The amounts may not really affect your budget, but they teach you the habit, the mechanics of contributing. Once you see that you can save, or that you can give to charity, you can begin to increase the amounts.

I started my own saving by setting aside just a few dollars a month. Now, four years later, I contribute about $1,000 a month to high-yield savings accounts. If I can save that much for myself, I can certainly afford to set aside a few dollars (or more) to help others.

So, I've made the decision that I can afford to give, and that giving is good. But where should I direct my money? There are hundreds of programs I could support. For example, I believe strongly in the missions of these groups:

I contribute to these organizations already, though. If I'm going to begin a campaign of personal giving, I want my money to do something more.

Micro-lending
Last fall, I wrote a review of Banker to the Poor: Micro-Lending and the Battle Against World Poverty, which describes the work of Muhammad Yunus, winner of the 2006 Nobel Peace Prize. Yunus established the Grameen Bank, which offers small low-interest, collateral-free loans to the poor. These micro-loans — most of which are given to women — are used for entrepreneurship, and are surprisingly effective at helping recipients escape the bonds of poverty.

I like micro-lending. I like that it combats poverty through personal entrepreneurship, a notion I value highly. It's like teaching them to fish instead of giving them fish. But how can I, one man in Oregon, provide a small loan to somebody halfway across the world? Fortunately, there's an easy way to do this.

San Francisco-based Kiva is “the world's first person-to-person micro-lending website, empowering individuals to lend directly to unique entrepreneurs in the developing world.”

Kiva allows average people to act as micro-lenders. You can browse profiles of entrepreneurs from around the world, choose somebody to lend to, and then Kiva works with the actual micro-finance organization to distribute the loan. When lenders get their money back, they can re-lend it to somebody else in need.

This video explains more about the Kiva concept:

My goal for today is to set up a Kiva account, and to fund one micro-loan. Though this is a small gesture — a very small gesture — it's a start. It's a first step on the road to charitable giving. In time, I hope to apply the same discipline toward this as I did toward saving. The battle against world poverty is made up of many such small gestures.

Fighting poverty
Kiva is not the only organization working to fight poverty, of course. Other organizations I may consider donating to in the future include:

  • Though Grameen Foundation is not a part of Yunus' Grameen Bank, the two work closely to fight world poverty through micro-finance. If I wanted to just donate money (instead of getting personally involved, as through Kiva), I might choose to do so here.
  • Heifer International is a “non-profit, humanitarian assistance, and sustainable development organization that specializes in providing livestock and related services to limited-resource families worldwide. Heifer does this regardless of race, creed, religion or national origin.”
  • Oxfam International is an “international group of independent non-governmental organizations dedicated to fighting poverty and related injustice around the world.” Oxfam's lousy web site is vague about how this is accomplished, although several GRS readers have recommended this group in the past.

For more on the subject of giving and micro-finance, check out the following stories from the Get Rich Slowly archives:

I'm not naive — I don't believe that poverty will ever be eliminated from the world completely — but I hope that through my actions I can help a few other people achieve their dreams, as I've been able to achieve mine.

Poverty does not belong in a civilized human society.
Its proper place is in a museum.

   — Muhammad Yunus, Banker to the Poor

Today is Blog Action Day. The topic this year is poverty. This is the first of three posts about the subject today at Get Rich Slowly.

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Tim
Tim
11 years ago

Among other people and groups I give money to, I think it is important to include:
supporting poor people in poor countries
supporting poor people in my own community

Automatic regular bank transfers and having money deducted from your salary are very convenient ways of giving. I think it is good to increase the amount you give when you get a pay rise.

Caleb Nelson
Caleb Nelson
11 years ago

That is such a touching story. I can relate so much. I’m still just at the beginning of my “success” story, but I’d love to start out giving just as much as I save. There’s just some mental block there: I suppose it’s saying “well, you can give when you get rich”, but as we all know, like you said, ‘rich’ is a moving target. The more you accumulate, the more that you need to be considered ‘rich’. I think the philosophy that you would need to incorporate is, just like saving, no matter what X% of my incoming funds… Read more »

MattA
MattA
11 years ago

You’ve mentioned before that giving leads to prosperity. I think this is a wonderful idea, JD.

I have issues with Kiva… I really want to help people in Third-World countries, but I do not really like their system. Kiva isn’t really a “charity” — it’s more like a hand-up than a hand-out. The average interest rate borrowers pay to the Kiva Field Partners is 22%, sometimes higher.

I think it is best to stick to donating to local causes, like the Humane Society, food banks, shelters, etc.

William Mize
William Mize
11 years ago

After seeing the movie “About Schmidt”, I ‘adopted’ a Korean orphan. I’ve seen her grow from a newborn infant to (now)6 year old who loves Mickey Mouse, her twin sister (also in the orphanage) and wants to grow up to cook good food for others.

Highly recommend Children Inc.
You can change someone’s life for only $28 bucks a month.

Ken
Ken
11 years ago

I don’t know much about Kiva, but Heifer International does some amazing work. One of their principles is that when livestock that are given to people reproduce, the family is to give some of the offspring to others in need. There’s a big “Passing on the Gift” ceremony when this happens…pretty cool.

A. Dawn
A. Dawn
11 years ago

Muhammad Yunus has been fighting all his to put poverty in museum. Not sure why it took so long to give him noble prize.
A Dawn
http://www.adawnjournal.com

plonkee
plonkee
11 years ago

I have a loan out with Kiva. It’s true that the interest rate is high, that’s mostly because loans cost money to process and that cost is essentially independent of the value of the loan.

Oxfam does some of the same things that Heifer International does. It also supports health workers (both through training and funding), campaigns for debt relief, provides emergency disaster relief, provides funds and equipment needed for schools,… Generally, the things that help. It’s my favourite charity.

Kirn
Kirn
11 years ago

Oxfam do a tremendous amount of good in developing nations. I think that if you found their website vague it’s probably just because their scope is so large. I’d suggest checking out their online shop for a sample of some of their projects. (http://www.oxfam.org.uk/shop/content/OOS_bestsellers.html?oxpromo=HomeCol3_BestsellersPage) For example, a donation of £6 buys 100 school dinners, £24 buys equipment and materials for a family in poverty to grow an allotment or to train a schoolteacher, and £25 provides training for women to start their own small businesses. They work to alleviate suffering, both day-to-day and from major humanitarian disasters (their own report… Read more »

Tim L
Tim L
11 years ago

Woo Hoo!

Excellent Post!

Is it ok for me to say I’m proud of you?

Anyway, I also like Opportunity International at opportunity.org

Beth
Beth
11 years ago

When I was a student, I tried to buy a jar of peanut butter for the local food bank every time I went into the grocery store. (Sometimes I would buy tuna or other canned meats when they were on sale instead). My thinking was that if I could afford food for myself, I could afford to help someone else as well.

I’m on a very tight budget, but I think I’m going to start doing this again.

UnderstatementJones
UnderstatementJones
11 years ago

Hi JD – awesome that you’re starting on a discipline of giving – the charities you’ve picked out look pretty great. I’d like to suggest that you also look into groups that have political missions, instead of simply charitable ones. Charities are great at allaying the world’s problems, but they are often restricted from addressing the root causes of those problems. Political groups, on the other hand, can advocate for policy changes that reduce the need for charity. Both are important – I tithe to causes, and like to split my gifts half and half between traditional charities and candidates… Read more »

Battra92
Battra92
11 years ago

My problem with charity is that in many cases I may agree with the cause but not necessarily the administration.

I tend to give almost exclusively to the Salvation Army and other church based organizations.

The Lions are a great organization and I try to support them when they are set up selling food.

April
April
11 years ago

Another charity that uses microlending is Women for Women International, which is one of my causes.

Women for Women International provides women survivors of war, civil strife, and other conflicts with resources to find a job or to start their own small business. You get matched with a new woman each year, mine this year, for example, was from Rwanda. We write back and forth throughout the year, and when she has completed the program, I’m matched with someone else. You can pick a country, or let them match you where the need is greatest.

http://www.womenforwomen.org/about-women-for-women/victims-to-survivors.php

Spaceknarf
Spaceknarf
11 years ago

Maybe, instead of giving an X percentage of your income to a charity, you could donate X percent of your time to do volunteer work.

I once read of an organization of people that do house visits of elderly people and try (among other things) to help them with their finances. The elderly often have no clue, especially with paying with plastic, internet banking, filling out tax papers and so forth. That touched me, and once I am ‘rich’ myself I intend to volunteer at that organization.

Kathleen
Kathleen
11 years ago

You’ve mentioned before the concept of paying yourself first, as in, that first 10% isn’t really yours to spend, it’s earmarked for saving (or whatever percent). As people of faith, that’s how we work giving into our budget. We feel that the first 10% of our net income isn’t ours to spend– it belongs to someone else. That mindset makes it easier to automatically write the check to support my missionary friends, or the local school, or whatever. (Choosing who to give to is harder, but what a fun problem to have!) Another catchphrase I’ve heard is this: what if… Read more »

Susy
Susy
11 years ago

Mr Chiots and I started giving 10% of our income when we first got married to charity. Each year we increase it by .5%. So now that we’ve been married for 10 years we’re up to 15%. It’s true, start small and you won’t notice it’s gone. We are able to save plenty of money and live very comfortable and we are giving large sums of money to our favorite charity. We currently are focusing on providing education to poor children in Colombia. We know that through an education they will be able to have a better life. We are… Read more »

James
James
11 years ago

I like the concept of providing financing to third world entrepreneurs. It’s great. And I think that as a “fighting poverty” thing, it’s a great topic to discuss. Kiva, specifically, as has been mentioned, charges interest rates that border on usurious. But even if no one has a problem with that, the fact is that it isn’t really “giving.” When talking about giving money to charity, or tithing, that’s giving. You don’t expect that money back. With Kiva, assuming all goes well, you get your money back that can go right back into your savings account. It is helping, certainly,… Read more »

Patrick
Patrick
11 years ago

JD, I plan on doing Kiva today also. I’ve written about it and planned to open an account, but hadn’t yet done it. We give at church, but I like the idea of helping entrepreneurs – essentially paying it forward.

I also like helping people around the world – I feel that we have the responsibility as world citizens to look outside our own borders.

NC
NC
11 years ago

I was inspired by Kiva and other microlending projects that I was involved with in college and after. With a colleague of mine, I started a microcredit program in Mozambique that gives small loans to people that want to grow gardens and sell the produce (keeping some for their family also). Anyways, you can read about it and see photos here: http://www.massamba.org/ Microcredit is a great way to really use what is a small amount to us here in the US or Europe and can go a long way to helping break the cycle of poverty for people in less… Read more »

Brad
Brad
11 years ago

Coincidentally, I’ve also decided that I need to start giving to charity regularly. It’s been a goal of mine for a while, but like you I was trying to get my own finances in order first. And my savings goal has also been a moving target. I like Heifer International and have it on my list of organizations to give to. I lived in Africa for a while, and cows are a good source of income, nutrition, and even status. I’ve also considered Kiva, but if they’re charging 22% interest, I don’t think I can use them. I worked in… Read more »

Betsy
Betsy
11 years ago

There are a number of excellent charity watchdog sites on the ‘net. I like GuideStar.org or CharityNavigator.org when I’m researching giving. (Edited to add: GuideStar is a for-pay site; Charity Navigator is less comprehensive but free research that works well when paired with other sites like CharityWatch.org.) Anyone who’s considering structured charitable donations (as opposed to change on the street or the odd canned good to Boy Scouts) should approach them with the same discipline that we approach any other investment. Research is key. Some charities — even the ones that do good work — have extremely high overhead. Other… Read more »

DCGal
DCGal
11 years ago

Don’t forget about the value of your time. Though I am not able donate as much to charitable causes as I’d like I volunteer at least 2 hours every week. Based on my billable rate, I’m a technology consultant, that’s a lot more than I could comfortably contribute financially!

Nick
Nick
11 years ago

I use Kiva, but until reading the comments I didn’t know that their field partners charge 22% interest! That is insane!

I will continue to re-lend funds in Kiva, but I think I will find another platform for helping alleviate poverty with my future funds.

Also, for the x-mas gift exchange in my family, every year I ask for a donation to Heifer International on my behalf. Whomever has my name can pick whatever package they want, but thats what I ask for.

C Jones
C Jones
11 years ago

For $10 you can save a life: http://www.nothingbutnets.net/

Joerg
Joerg
11 years ago

John, welcome to Kiva and congratulations to your great post.
I joined Kiva myself today, and was able to give the first loan. It feels great.
Just in case, if you find there no one, who needs your money, come back. New borrowers will show up each day.

James M
James M
11 years ago

I am not a big fan of micro-lending organizations, or any global relief efforts. These sorts of “high profile” charities compete directly with the underfunded organizations in my own community. I have plenty of needy people right here on my doorstep… I don’t need to look 10000km away.

Keeping with my “pay myself first” philosophy, I tend to donate the bulk of my funds to local organizations. I also sleep better knowing these organziations tend to be lower overhead (more money to those who need it).

elisabeth
elisabeth
11 years ago

I’d like to second the idea of giving locally — whereever you live, the poor are nearby. Helping locally is really helping yourself, too, since it creates a better environment to live in…. And there’s really good accountability, you can see how your funds are used. My favorites are the local homeless center, the domestic violence center, the free medical/dental clinic, and a local women’s clinic that provides sliding scale reproductive medical care to women, men, and teenagers. On the other hand, my husband thinks the best plan for his giving is to go to large national and international organizations,… Read more »

KC
KC
11 years ago

I’m like you – I really have a lot, but I’m always worried I might need it, especially in this economy. But I overcome this by giving locally because I know it will ultimately make my life better. I know that by helping my public library, or food programs in my county or giving to local scholarships for medical students I know I am helping my community and in turn, helping myself. It sounds somewhat selfish, but I want to help where I know the money is needed – and it is needed in my community.

PDXgirl
PDXgirl
11 years ago

Sorry, gotta work so I didn’t read thoroughly, or all the comments (bad commenter!)

Alternative Gifts International is a great way to make charitable gifts to people who appreciate that.
http://www.altgifts.org

They have many different kinds of gifts, help for the poor, the sick, people escaping violence all over the world.

bethh
bethh
11 years ago

Thanks for the excellent reminder. I still have some debt and need to beef up my savings, but I’ve certainly managed to give myself some good times this year. I can find some room to help others too!

It helps that in my monthly spending, I have a line item for charity. It’s been zero (!) for most of the year, but I’ll donate some before the year is out. I tend to do food banks (have you looked at Oregon’s hunger rate? it’s one of the worst nationally) and also my NPR station.

allison
allison
11 years ago

i loved reading “banker to the poor,” and i would love to be involved in a micro-lending project. however, kiva isn’t true to the spirit of yunus’ micro-lending theory. his whole idea is that individuals who make the loan assume the risk, and if interest is paid, individuals get a cut of that interest. now, i’m not saying its wrong to want to forfeit that interest payment in order to fund the overhead of a great non-profit organization who deals with the administrative burden of making the loans happen. i’d be happy to do that! but i just looked at… Read more »

BC
BC
11 years ago

I’d like to pose a question to all of you, something that I have thought about (and not come up with an answer to yet) –

You decide you’re going to donate X amount to a charity this year, you can afford to do this. Now, what if there was somone close to you (such as parents) that could be really helped with that money.

Would you still give to charity, or would you give to people close to you in life first?

Susan Flemming
Susan Flemming
11 years ago

If you’re looking for an organization where 100% of the dollars you donate goes to help individuals, I recommend Modest Needs.

We started out with a one-time donation at Christmas time a couple of years ago and have now moved on to donating a fixed amount every month.

Their mission statement can be found here:
http://www.modestneeds.org/explore/mission/

Chris H
Chris H
11 years ago

I’m with DCGal on contributing time. I helped out coaching with a local kids sporting league and it was definately a fun way to give back.

On another note; I saw this band in Baltimore Sunday (Rise Against). After checking their website, I found they put on a “free” show the week before with a donation to the local food pantry (I think it was up n Boston). Just thought that was a cool idea for the band/venue, and wanted to share.

P.S. – Their new CD kicks a$$.

Seattle Veggie
Seattle Veggie
11 years ago

Another blog I read, 101 Cookbooks, started a Kiva lending team about six weeks ago, and now has 572 members (the third-largest of all teams!). If you wanted to amplify your lending power, maybe you could start a GRS lending team.

http://www.kiva.org/app.php?page=community&action=explore&kv_orderBy=n_users&kv_direction=DESC&kv_page=1

Moneyblogga
Moneyblogga
11 years ago

“Poverty does not belong in a civilized human society.Its proper place is in a museum.” In a perfect world, this would be the perfect solution. However, our world is far from perfect and poverty is a subject that I feel very strongly about. Having worked closely with the welfare crowd for some time, I have an entirely different view than the one I once held. Not wishing to be controversial BUT … You can only help those who WANT to be helped. For that reason, poverty (especially in this country where welfare handouts are plentiful) will never disappear. I have… Read more »

Mary Sue
Mary Sue
11 years ago

I’m not naive – I don’t believe that poverty will ever be eliminated from the world completely – Negative self-talk. Defeated before you even began. Tsk. My donations to charity are split between local, national, and international charities who are in line with my religious beliefs. But I’m Episcopalian, so that covers a broad and eclectic set of beliefs. The national leader of my church (who’s an Oregonian!) has committed us to the UN Millenium Development Goals which include the eradication of global poverty. As such, I believe in my heart and soul and with my dollars that global poverty… Read more »

PDXgirl
PDXgirl
11 years ago

Moneyblogga, I think the welfare system is outside the scope of charitable giving, don’t you? If I donate money to a homeless shelter, aren’t I doing so because I believe the right thing to do is give people a safe/warm place to sleep regardless of why they’re on the street? Ditto for a Food Bank, if I donate to the Oregon Food Bank, it’s because I believe all people deserve a can of beans, even if they got themselves in the situation of not having a can of beans in the first place. My $.02 I’m restraining from sharing my… Read more »

Rachel
Rachel
11 years ago

JD, I think you should look a little closer into you own community. People need help everywhere, not just in far away countries. Who knows – maybe you buy some groceries for your local food pantry and they guy who they go to is so grateful that he gives his time somewhere else… like maybe you one day with a broken down car on the side of the road! I know that our church lists the items the food pantry is short on each week at the bottom of the bulletin. That usually gives us a good place to start!… Read more »

Brooklynchick
Brooklynchick
11 years ago

Oh JD, all I can say is ABOUT TIME! Dear dear, this is long overdue. Ok, enough scolding, had to get that off my chest. Some nonprofits I love: -Heifer -Doctors Without Borders -Oxfam -DonorsChoose (projects in local schools) -Opportunity International I like Kiva, but if you prefer an alternative, you could look into Accion or FINCA, both of whom also do lending to low-income entrepreneurs. A small charity I give to every month is the One Acre Fund. They support small farmers in Africa and report to their donors on their successes AND challenges – they really pride themselves… Read more »

Jadzia
Jadzia
11 years ago

I just discovered donorschoose.org, which allows you to choose specific programs at public schools to fund. I picked a high-poverty elementary school (in the rural and impoverished area of the country where I grew up), and funded a new set of books for a second grade class. You can sort the projects by school poverty level, location, type of project (reading, science, foreign language, whatever). I think this program is great because you have a feeling of making a very specific impact, as opposed to having your small contribution just be a drop in the bucket of a larger organization’s… Read more »

Rachel
Rachel
11 years ago

@ BC

“Would you still give to charity, or would you give to people close to you in life first?”

I guess that would depend on HOW I am giving –

If I think it is important to give to a food shelter, then I would only give the money to my family instead if they were hungry.

BUT if I thought the money should go to a scholarship and I had a sister who was trying to find money to go back to school – then maybe I would send the money to her instead.

All priorities I guess….

Christine Groth
Christine Groth
11 years ago

It’s a univeral law to give money away. Giving one percent to ten percent of your money away works the same as planting apple seeds. The hole that you give through is the hole that you receive through. If you give nothing you’ll receive nothing. Quoted by Foster Hibbard.

http://www.101WaystoMagnetizeMoney.com
Christine Groth

Rachel
Rachel
11 years ago

And JD –

Have you considered that this might be the time to start up your program for teaching kids about money? The money that would go towards that would be something that would be helping your community!

MattA
MattA
11 years ago

Brad: No, you do not earn a return on your money at Kiva. That 22% goes straight to the Lending Partner in the country where the borrower lives. YES, you are doing good by helping entrepreneurs, but you are also financing a loan company. Honestly, I’d feel better if the money went to Kiva; running a website of that size is not free.

If you wanted to earn a return on your loan, and help others, maybe consider Prosper.com? Different business model, and loans only go to US residents.

Wendy
Wendy
11 years ago

I’m just starting out as a freelance writer, totally strapped for cash, but still in a better position than so many people in the world. I’ve always been impressed by microfinance efforts, and the $25 minimum loan through Kiva is within my budget. So thank you, JD, for reminding me about Kiva. It feels great to start off the day by helping someone else, even in a small way.

J.D.
J.D.
11 years ago

Thanks for your comments and suggestions, everyone. The discussion about the high interest rates charged by Kiva’s lending partners is interesting. I’m still going to start a loan through Kiva (just as soon as I finish this comment, in fact), but I’m going to explore the other options you have suggested, too.

Christina
Christina
11 years ago

Good for you JD. I have “charity” as a line in my budget. I always have. I also give TIME, which is a great option for the frugal. I have limited my giving to 3 charities: My church, the St. Vincent de Paul Society (they do A LOT with very little. Amazing.) and the Lupus Foundation of America. Also, I will make a small donation to every personal friend who makes a personal request. You know… “I’m running in a charity marathon next month, will you sponsor me.” Anyway, they always reciprocate when I do my annual effor for the… Read more »

Moneyblogga
Moneyblogga
11 years ago

PDXgirl Says: Moneyblogga, I think the welfare system is outside the scope of charitable giving, don’t you? That wasn’t the point I was making. 95% of the people who have been through my building in the past 3+ years (that’s a LOT of people btw) know every trick in the book for garnering freebies. I’m not tarring everyone with the same brush. The point I was trying to make is that the charities that exist in my rental property’s neighborhood are being bilked out of food, clothing, etc by those who would rather spend their money on drugs. People who… Read more »

RenaissanceTrophyWife
RenaissanceTrophyWife
11 years ago

thanks for raising this very important issue! I love heifer international; been giving family members donations as presents for several years now. Another regular donation goes to Doctors Without Borders.

I also try to volunteer locally as much as possible, whether with Big Brothers/Big Sisters, shelters, or beach/park cleanup efforts. Every little bit helps, and you meet some incredible people along the way.

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