Community & Current Events

How to make the biggest difference when giving to charity

How to make the biggest difference when giving to charity

Author: Canadian Living

Community & Current Events

How to make the biggest difference when giving to charity

Giving well
Before most of us learned to talk, we learned to share. It's a lesson we learned from parents at home, teachers in the lunchroom, and friends on the playground. Now that we're all grown up, and we earn our own lunch money, sharing is both easier and more difficult than it was when we were kids. We are in charge of our own assets, and we probably have more of them, yet so many organizations want our money, and it's time-consuming and confusing to figure out who will do the most with what we give.

To a responsible citizen with a desire to change the world, knowing how to give effectively matters. Those of us who are fortunate enough to have spare pennies can spur progress by donating them. We don't need massive wealth to be charitable. A number of great systems exist for stretching modest contributions, building philanthropic networks, and fund-raising successfully from numerous small donations. Remember, it's not the size of the coffer that counts, it's how you use it.

New rules for global giving: the virtuous circle
While there's no shortage of opportunities to support important causes, there's usually very little opportunity to see our money have measurable effects on the people we wish to help -- especially when we only have a small amount to give. But there is a way for us to leverage the least amount of money into the largest measurable effect over time; there is a type of giving that multiplies itself.

Think of this approach as "enabling philanthropy": a virtuous action that enables someone else to take a virtuous action, like giving someone a microloan to start a small business that will eventually provide for all their needs. We don't have to give annual cheques to umbrella organizations and hope that our money has actually done some good. We can take a relatively small amount of money and aim it at the precise point where it can do maximum good. We can give this money not as charity, but as an investment in the latent ambitions of poor people in villages and squatter cities, on the condition that the recipients magnify this seed by starting a small business or enlarging an existing one. In addition, we can strongly encourage them to take some small portion of their growing investment to help someone else as well.

This is a virtuous circle that keeps on giving, paying its benefits forward generation after generation. It's a beautiful thing, and it's the only type of love you can dispense with money. There is also an optimistic assumption in this scheme: the 2 billion poorest people in the world are really 2 billion entrepreneurs just waiting for their first seed money. If you give it, they will build upon it.

As you look for opportunities to start your own virtuous circles, keep in mind the following important guidelines:

Aim your gift at those with the least means, to whom small amounts make a huge difference.

Give at least $200. Though it may seem like a small amount, it's enough to make a real impact on the poorest recipients and to allow them to address their dreams of tomorrow. If you give less than that, the money can only help with immediate needs.

• Ask yourself if the gift will be able to expand itself, gaining amplitude with each cycle.

• Focus your efforts on gifts that have a global range.

• Make sure that the agency that facilitates your donation sends the funds directly to individuals. The more steps between your donation and the recipient, the less impact it will have.

The following three organizations are highly evolved programs that produce amazing results. Giving to these organizations will go far to make you optimistic about the world's future:

Heifer International
For 50 years, the Heifer Project has been providing families in developing countries (and in areas of the United States) with breeding pairs of animals: cows, goats, pigs, rabbits, water buffalo, ducks, and so on. In the world's poorest regions the cost of a cow or goat can exceed a year's income, preventing many families from acquiring animals. When a family received a breeding pair they get meat, milk or eggs, but more important, they get a source of income: they can sell the offspring.

Each recipient must agree to give one breeding pair of offspring away to another family, thus paying the gift forward. So a small contribution can multiply as families gain food, a source of income, the means to help someone else -- and pride. It's hard to imagine a better gift, or a more practical, proven lever for making a difference in communities of need.

Opportunity International
Microfinancing is quite the rage in international circles for one truly amazing reason: the payback rate on tiny loans to workers in developing countries is greater than the payback rate on large loans to their home countries. In other words, from an outright profit perspective, you are better off loaning money to a Bolivian peasant than to the Bolivian government. Several nonprofits, starting with the Grameen Bank in Bangladesh, have pioneered microcredit loans on a large scale and for large investors. For a helpful citizen, though, it's easy to contribute funds to a wide variety of microloan programs through Opportunity International. This organization has been providing microcredit loans for 30 years, since even before the term microcredit was coined. It works through Trust Banks, groups of 20 to 30 (mostly women) borrowers who meet weekly to cross-guarantee the loans.

Trickle Up
Rather than dispensing loans, Trickle Up issues outright grants (typically $200) as seed capital for microenterprise hopefuls -- with strings attached. What the recipients get is some start-up cash and a lot of training. Trickle Up makes grants to those looking to open small businesses like food stalls or repair shops, on the condition that grantees undergo basic business training, commit a minimum of 250 hours in the first three months to their venture, reinvest at least 20 per cent back into it, and keep an account ledger. That means that when you contribute to Trickle Up, you are building up a social network of do-gooders to ensure good deeds persist. In 2005 10,000 businesses got started via Trickle Up donations, and 30,000 budding entrepreneurs benefited from this global program; about 70 per cent of grantees are women. Follow-up expansion grants are offered, too.

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Excerpted from Worldchanging: A User's Guide for the 21st Century, edited by Alex Steffen. Copyright 2006 by Worldchanging. Published by Abrams, an imprint of Harry N. Abrams, Inc. Excerpted with permission from Harry N. Abrams. All rights reserved. No part of this excerpt may be reproduced except with permission in writing from the publisher.

Smaller circles, enormous impact
The virtues of helping a person in the Global South jump-start a business are undeniable, but what do we do if we can't afford to make a $200 gift on our own? We can turn our $20 into $200 by coordinating our donations through giving circles.

Giving circles are easy to set up and easy to manage: we donate a small amount of money and ask our friends and coworkers to match our donation. Pooling our resources and directing the combined donation to smaller, more specific causes is much more effective than writing a small cheque to an organization that tackles "the environment" or "human rights abuses."

For example, One By One is building an online network to fight obstetric fistula, an injury to mothers during childbirth cause by long, obstructed labour -- the kind that would be easily remedied in the Global North with a cesarean section. When left untreated, obstetric fistula can be devastating, often debilitating the mother and rendering her incontinent. This condition is relatively inexpensive to cure (it costs about $300), but women in the developing world, particularly in Africa, rarely get the treatment they need.

One By One's network of fistula fighters come together to raise tax-exempt donations through the underfunded United Nations' Campaign to End Fistula. The donation of each giving circle goes directly toward buying one woman the surgery she needs. In other words, when 10 people write cheques for $30, one woman's life is drastically improved.

Effective philanthropy
What can $150,000 buy?

If you're a professional musician, it can buy a music video -- and it's easy to blow much more than that on staff, union workers, caterers, makeup artists, equipment and travel.

But if you live in Afghanistan, it can buy clinics and medicine; in Africa, classrooms and books, shelters for refugee camps, ambulances and irrigation and scholarships.

Musician Sarah McLachlan chose to spend the $150,000 allocated to her "World on Fire" music video on services for the world's needy. Instead of buying one ephemeral piece of advertising, the money paid the total running costs for a year of an orphanage in South Africa and a street children's hospital in India; purchased six months' worth of medicine for 5,000 people in Nairobi, Kenya; provided counselling and schooling for 70 child soldiers; and much, much more.

And then she went ahead and made a video, for $15, that puts faces on the faceless by revealing all that was done with the rest of the money and by making staggering comparisons between what the money could have bought and what it actually did buy. The video reveals, for example, that $5,000 can pay for hair and makeup services on a set or it can fund schooling for 145 Afghani girls.

This was much more than a mindless publicity stunt. McLachlan and her producer, Sophie Muller, decided to make the video this way after being moved to action by a story they'd read on the Engineers Without Borders website. Their hope was that by making the video they would be able to illustrate how easy it is to turn wealth, especially tremendous wealth, into worldchanging actions.

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Excerpted from Worldchanging: A User's Guide for the 21st Century, edited by Alex Steffen. Copyright 2006 by Worldchanging. Published by Abrams, an imprint of Harry N. Abrams, Inc. Excerpted with permission from Harry N. Abrams. All rights reserved. No part of this excerpt may be reproduced except with permission in writing from the publisher.


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How to make the biggest difference when giving to charity