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Tuesday, January 10, 2012

Is it Like Micro-Finance?

I think it’s time to address head-on the oft-asked question:

“So is it like micro-finance?”

Well, readers, Benevolent is like microfinance in that:

  1. Benevolent provides validation on each need just as each microfinance project is (or should be) subject to due diligence by someone on the ground in that community who knows and has vetted the recipient.
  2. Multiple donors come together to meet each need on the Benevolent site just as some micro-finance providers allow for a crowd-funding model for investing in micro-finance enterprises.
  3. The individuals whose needs are listed on the Benevolent site are each striving for the next level of sustainability and resources for themselves and their families just as those who seek investment in their small enterprise are seeking access to sustainable and increased income streams through microfinance support.
  4. Those who financially support the needs posted on the Benevolent site can expect that their dollars will fuel progress and direct impact for those whose needs are met just as those who invest in microfinance can expect that their capital will fuel progress for those individuals and enterprises who receive microfinance loans.

The difference is, of course, that with Benevolent, investments are made to help people over hurdles and onto next steps and those investments are made as donations, not loans.

Why do we choose this approach? It’s values-based. Here’s a draft of a bit we plan to put up on the website to explain to anyone who’s interested why we choose a micro giving model for this platform…

We believe that Benevolent’s help to overcome hurdles should be grants, not loans:

  • Needs funded through the Benevolent site are investments in people’s progress. Each of these low-income individuals has a long path ahead and we choose not to encumber them with additional debts as they strive for sustainability.
  • Our needs are capped at $2,000 and average donations are under $200 each. These are small needs met by modest gifts.
  • The return each Benevolent donor receives is to know who they helped and how their support made a direct difference.
  • Each of us can recall when we received help - eyeglasses, a computer, tuition, a security deposit, pots and pans. Not all support necessitates a payout or payback.

Benevolent provides an avenue for people to seek the support they need without taking on the burden of debt at precarious junctures along their personal paths.

What do you think? Is this the platform you would have chosen?

- megan kashner, founder & ceo

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