(Still) Not Ready For Prime Time

The recent New York Times article decrying the inability of Kiva.org to keep pace with its own success is just one more example of the problems caused by the absence of a "true" social capital marketplace. The article states, "Kiva is a philanthropic organization facing an extremely unusual challenge: maintaining adequate supply (people who need help) to meet demand (people who want to give it)." In fact, the challenge is not unusual at all.

The fact is that mechanisms to efficiently and effectively connect uses of social capital (in Kiva's case, the "uses of capital" are unique small businesses in the developing world, but one also must include--in the U.S. alone--nearly 1.5 MILLION nonprofit organizations) with sources of that capital (again, in Kiva's case, generous individuals providing loans, but in general, individual donors, foundations, government institutions, corporations and others) do not exist. That is why nearly half of all charitable giving goes to religious and educational institutions, while health, human services and public benefit organizations combined receive only 24% of those charitable funds. In the cases where tiny "marketplaces" are created to connect sources and uses of capital in interesting and engaging ways, as in the case of Kiva, there is an immediate problem if that marketplace succeeds: the organizations creating these "marketplaces" aren't funded or prepared to scale.

It remains to be seen how long generous "investors" such as those who are logging onto the Kiva.org site will tolerate being met with the message to "try again later," versus just going back and giving to their churches or their alma maters, which are ready and willing with open hands to take their money. Thankfully, many good people are working toward creating a social capital marketplace, but it's a long time coming. In the meantime, we can hope that if donors get turned away from one site for lack of giving opportunities, that they will be willing to "surf" for other engaging organizations that would be happy to put their money toward social benefit.

Caroline Heine