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Crack The Cycle Of Poverty With No Effort Or Cost
September 22, 2014

Crack The Cycle Of Poverty With No Effort Or Cost

Written By: Andrew Hallam

Imagine the government rounding up people.

Those exceeding grade 8 educations, come this way.
You wear glasses.  You must be smart.  Step forward please.

Cambodia’s leader, Pol Pot, did this between 1975 and 1979.  His goal?  To eliminate the educated.  He viewed them as threats to his regime.  In just a few short years, genocide reduced the country’s population by 25 percent.

Last year I got together with a group of friends to start what we now call Cambodia’s Future Foundation.  We hired a Cambodian community organizer, flew to the country in March then traveled by motorbike along dusty roads to impoverished communities. Most of the homes lack running water. Their histories were horrific. During the genocide, the Khmer Rouge often dumped bodies into wells.  This brought disease.

The landmines they left still dismember.

We visited local schools to select a handful of promising kids: those who cooperated well with others; those who were well respected; those with intellectual and creative promise.  We administered tests in the local language and carefully observed the students during team-building activities.  Teachers shared feedback on their top students.  Even peers were asked for input.    

After three sweltering dusty days we chose 10 fifteen-year old kids.  Then we promised them room, board and a local college education---with strings attached.  During their final two years of high school, we asked the students to pursue a community project of their choice. Some are selecting farming enhancement; others are developing community cleanups.  Others may start a fresh water project or community sports program.  We’ll mentor these kids, providing resources and money where it makes sense to do so.  Those following through with their project will be offered a scholarship.

My wife and I aren’t saints.  We’re more like control freaks.  When donating money we want to know where it’s going, whether it’s strengthening or weakening, and whether there’s a rajah reaping rewards through the NGO.

If you ask similar questions, you could start your own foundation or roll up your sleeves to find a worthy cause.  Kiva.org is a great place to look. Founded in 2005 by Matt Flannery and Jessica Jackley, Kiva Microfunds raises money for microloans.  Best of all, you don’t have to be wealthy (or even financially stable) to help.  Here’s how Kiva explains its service.

You log onto Kiva.org and scroll through the profiles of those seeking loans.  Let’s say you find a seamstress in Bangladesh needing $200 for a sewing machine.  Her photo is on the website. She’s a widow with two children.  So you loan $25.  The key word is loan.  When the seamstress repays it, you get your money back. Roughly 99 percent of the loans get fully repaid.

Does this sound too good to be true?  It is.  Reality is a bit more complicated. When loaning with Kiva, the money gets pooled into a local micro-financer’s account.  Kiva is just a middle- man. The Bangladeshi seamstress borrowing $200 might pay up to 30 percent interest to a local micro-financer.  If she defaults, the micro-financer may pitch in to cover for Kiva donors.  Keeping on Kiva’s good side is key to their business. 

 You could loan $25.  Once it’s repaid, you could loan it again, and again and again.  By keeping it circulating, you could strengthen hundreds of people. Remember that these aren’t donations.  Gifting money (whether to your child or to a developing world entrepreneur) can weaken pride, creativity and grit. 

To change somebody’s life you don’t have to start your own foundation.  In fact, you could have better luck with Kiva.   You might not break the concrete feet of poverty.  But when millions of people loan small sums, we can create some mighty cracks.

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