Free Warm Fuzzies!

Some time ago, I gave a plug for Donorschoose.org -- a nifty website that enables you to make small-scale charitable donations to individual school programs.  I've donated to them a few times -- basically, a teacher writes up a proposal for what they need for their classroom, folks (like, say, me) fund it, and then, in addition to sending the classroom stuff to the teachers, the website also sends cardboard cameras for the teacher and students to memorialize their use of whatever stuff you paid for.  Then Donorschoose sends all the donors a package full of warm fuzzies -- usually a thank you letter from the teacher, and sometimes notes from the students, too, and copies of the pictures.  I have three little Warm Fuzzies packages from Donors Choose -- and they really make me feel like my small charitable contribution actually made a tangible difference in some students' lives.

At work the other day, a friend directed me another organization.  It's even better than getting warm fuzzies for making a donation -- it gives you warm fuzzies for making a loan.  The folks over at Kiva.org (I looked 'em up on Guidestar -- they seem legit) have found a way for anyone with a PayPal account, $25, and an internet connection to get on the Microfinance bandwagon.  Much in the same way Donorschoose lists projects from teachers, Kiva lists individual loan requests from struggling entrepreneurs in poor and developing countries.  Kiva (working through various middle men) will pool your money with the money from other lenders and get the cash to the people who need it to help expand their businesses.  And then you get emailed progress reports on how the business is doing (and the loan is being repaid).  Warm fuzzies AND you get your money back at the end of the loan!  OK, yeah, it's a no-interest loan and there's no guarantee you're definitely going to get paid back.  But microfinance traditionally has very high repayment rates -- and when it's such a small amount, you can risk $25 on a chicken farmer in Cambodia or a woman who sells charcoal in Ghana, and help give 'em a shot, you know?

(DonorsChoose includes a voluntary 15-25% "Fulfillment fee" to cover their overhead.  Kiva loans100% of your cash to the business in need, and then asks for an additional voluntary 10% to help fund Kiva itself.)

I adore charities like these -- and they both demonstrate the really cool element of the internet that manages to bring people together where transaction costs used to prohibit it.  I mean, really, when I first heard about Microfinance, I thought, "Hey, if it only takes a $50 loan to help make some baker in an undeveloped country self-sufficient, I could do that."  And now, I can.