Jessica Jackely, co-founder of Kiva and the newly launched Profounder, gave an intensely personal talk at TEDGlobal last week.  It was met with a standing ovation and actually, it was the single talk that brought tears to my eyes.  In addition to conveying her deep passion for development, Jessica had some very insightful things to say about the psychology of philanthropy and the mechanisms with which those who give engage with those who receive.

According to Jackley, the exchange that characterizes the way many give today can get in the way of the thing we want most.  We often give more to alleviate our own sense of guilt than out of a desire to truly help.  Doing something, she says, should not be a business transaction.  

Furthermore, the way we tell, share, and participate in stories is of deep importance.  The distinction between us and them and rich and poor are false dichotomies.  We shouldn’t think about the world along these lines, because it promotes the wrong mindset towards engagement.

Jessica goes on to say that the best way to change people’s lives is to give them control over what they believe is important.  We should be engage in a way that validates dignity and promotes respect (I imagine so many Tweeps doing cartwheels of joy at that statement).

Lending, rather than giving, enables this according to Jackley.  Whereas giving is transactional, lending fosters engagement through ongoing dialogue and continued attention.  Put succinctly, (Love + Money) > Money.

I think Jessica’s general points about philanthropic motivations and engagement are excellent. Personally, I’ve been fascinated by the psychology of philanthropy of late.  What motivates people give?  How do they make lending decisions?  What do they want in return?  These are critical questions for understanding the aid community.  Furthermore, I think she’s right on point that we should engage in a way that empowers, rather than paternalistically.  But I’m not sure I agree with her final conclusion about lending vs. giving.    

First, I don’t think that engaging in a way that validates dignity and gives people control over their lives and grant making are mutually exclusive.  Not all of the things done in development are market oriented, and I believe there should be a continued role in supporting non-profit activities.  However, in tune with Jessica’s points, I think that individuals on the ground should be empowered to determine and execute on those activities.  This validates dignity while also supporting a broader scope of initiatives than would be the case if the focus were on investments that bring a return.

Secondly, though the Kiva model certainly achieves Jessica’s first objective of empowering people to do what they believe is important, I’m not convinced a Kiva transaction is that different from just giving away money.  When we talk about social investing, I think an important question to ask is, “what’s the investor’s alternative?” It is a very different thing if that alternative is giving money to charity or investing in a mutual fund.  I think in many cases, especially cases involving small amounts, people make decisions as if they were simply giving money away.  When someone goes on Kiva, I don’t think they’re determining to whom to loan money based on creditworthiness (it would be impossible for someone sitting at a computer in London to assess an entrepreneur and opportunity in Nairobi at any rate).  Rather, I think they’re doing it based on a picture and to Jessica’s point, the story that the individual brings. Their motivation is more about charity and less about investment.  Perhaps that's just fine, but I think it's a distinction worth noting -- especially when looking to crowdsourcing for larger sums (which is what Profounder does).  

In my mind, it’s not the distinction between giving and lending that’s notable when it comes to Kiva, but the distinction between empowering and paternalistic interventions.
 
Bravo to Jessica for one hell of a TED talk, at any rate!