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Inspiring Stories

Fantastic Friday: Reid Hoffman Edition

I’ve been an advocate about the need to get away from paternalism and move towards more participatory ways of solving problems and governing our society.  See here, and here for examples.  Today, I learned that Reid Hoffman has donated $1M to allow 40,000 people to donate $25 via the microfinance site kiva.org.  There are still almost 2,000 free trials remaining, so if this interests you, follow the link.  Personally, I think this is newsworthy in the way that it promotes more participation by individuals.  According to the Huffington Post:

This is the first time Kiva has given its users the ability to lend out an individual’s personal wealth. Already, the site has seen a monthly record 43,000 new users sign up for the service in March.

Some of those new users have lent their own money on top of the $25 of Hoffman’s money, totaling roughly $110,000 so far. The add-on funds suggest that the program is having a larger effect than if Hoffman had just handed over the $1 million to Kiva and relied on the site to dole out the loans.

Premal Shah, Kiva’s founder, said in an email that “other generous supporters are following in Reid’s footsteps.”

It doesn’t escape me that Hoffman is on Kiva’s board and could certainly be using this as a way of just publicizing the organization that he is a part of.  But, I’m not sure that’s a bad thing.  Kiva, as an organization, is decentralized.  People put up their loan requests.  Individuals respond and fund them.  Unlike much of the rest of how the world of development and microfinance works, there is no puppet master controlling the money and agenda and idea generation while everyone else is just tasked with implementing.  Further, in most instances, when donors donate money, they want so much control over how it is used and administered, and Hoffman has actually done the exact opposite.  So advocating for more decentralization seems positive to me.  Kudos to that.

However, at the same time Hoffman’s Kiva initiative is not exactly escaping paternalism given that people from far away (the West) are still making decisions on which projects to fund for the rest, largely on an emotional level, without much, if any, local knowledge.  That should be addressed, whether by Kiva or by some other innovative philanthropic organizations that are on the horizon.

But all that being said, it’s a step in the right direction.  And I’m hopeful there are many more steps to come.

Have a Fantastic Friday everyone!

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