I enjoyed meeting Five Talents friends in North Carolina a week ago. They shared important questions about the effectiveness of our work compared to others who work in micro-finance. This made me reflect on how we leverage the gifts of our funding partners like you.
Leveraging Your Charitable Gift
The best way to look at leverage is to look beyond simple percentages and consider cumulative impact. If I give a dollar to an organization I like, and they get 90 cents of that to those I want to help, at first I might think that’s great. But if I learned that a lot of my gifts were going, year after year, to buy basic commodities, and that the people I want to help are just as dependent on subsidized goods as they were ten years ago, I wouldn’t feel too good about that.
By comparison, when my wife, Lynn, and I give to Five Talents, we know most of the money will go to pay trainers who live and work in poor countries around the world. The work of those trainers is leveraged as they teach volunteer facilitators who offer their time to support local savings groups. Then, in each group the members put their own money into “the box”, leveraging local capital, so that their friends and neighbors can take out loans and become new entrepreneurs. When those new business owners pay pack their loans and put their profits into the lives of their family members, they further leverage those profits and improve the livelihood of the whole community.
And when about 80% of participants graduate out of our programs, they break the cycles of poverty and dependence. Now that’s effective leverage.
So, why did GuideStar just give us a platinum rating?