Giving Till It Helps

How your small donations can make a big difference; from <em>WorldChanging: A User's Guide for the 21st Century</em>

| November / December 2006

To a responsible citizen with a desire to change the world, knowing how to give effectively matters. Those of us who are fortunate enough to have spare pennies can spur progress by donating them. We don't need massive wealth to be charitable. A number of great systems exist for stretching modest contributions, building philanthropic networks, and successfully raising funds from numerous small donations. Remember, it's not the size of the coffer that counts, it's how you use it.

Enabling Philanthropy

While there's no shortage of opportunities to support important causes, there's usually little opportunity to see our money have measurable effects on the people we wish to help-especially when we only have a small amount to give. But there is a way for us to leverage the least amount of money into the largest measurable effect over time; there is a type of giving that multiplies itself.

Think of this approach as 'enabling philanthropy': a virtuous action that enables someone else to take a virtuous action. We don't have to give annual checks to umbrella organizations and hope that our money actually does some good. We can take a relatively small amount of money and aim it at the precise point where it can do maximum good. We can give this money not as charity, but as an investment in the ambitions of poor people in villages and squatter cities, on the condition that the recipients magnify this seed by starting a small business or enlarging an existing one. In addition, we can strongly encourage them to take some small portion of their growing investment to help someone else.

This is a virtuous circle that keeps on giving, paying its benefits forward generation after generation. There is also an optimistic assumption in this scheme: The 2 billion poorest people in the world are really 2 billion entrepreneurs just waiting for seed money. If you give it, they will build upon it.

As you look for opportunities to start your own virtuous circles, keep in mind the following guidelines:

  • Aim your gift at those with the least means, to whom small amounts make a huge difference.
  • Give at least $200. That's enough to make a real impact on the poorest recipients and to allow them to address their dreams of tomorrow. If you give less than that, the money can help only with immediate needs. For ways to leverage a smaller donation, see 'Giving Circles.'
  • Ask yourself if the gift will be able to expand.
  • Make sure that the agency that facilitates your donation sends the funds directly to individuals. The more steps between your donation and the recipient, the less impact it will have.

The following organizations take three different approaches to enabling philanthropy:

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