No, sixpence is its worth. Its value is in how you spend it.
(paraphrasing someone in Mary Poppins)


Within and between countries, the distribution of wealth and opportunity is profoundly unequal. 40% of the world’s wealth is owned by the richest 1% of the population, while the poorest half own 1%. Out of 5 billion people in developing countries, 2.5 billion live on US $2 a day or less and 1.3 billion on US $1.25 a day or less. 925,000,000 people are malnourished. The poorest 5% in a Western country are better off than the richest 5% in Africa.*

Our mainstream political systems are disproportionately influenced by people who have an interest in maintaining the status quo or increasing the concentration of wealth. Although some emerging market countries have been able to profit from globalization, inequality within countries continues to increase.

Now, I’m too old and crusty to think we can just turn this around. But I also know that even a modest redistribution can make a very worthwhile difference. And thanks to the power of social networking, ordinary middle class mugs like us can pool our latte money (or more if we want) and invest it in something of far greater value – enhancing someone’s quality of life. Not a bad exchange rate eh, lattes for lives?

A 2012 Credit Suisse report** noted that more investors and entrepreneurs than ever are making impact investments  – “investments made with the primary intention of creating a measurable social impact, with the potential for some financial upside”.

I’m not Bill Gates, and neither are you – but collectively, our capacity to invest in social impact is quite significant. Organisations like Kiva and Hoop Fund are using online social networks to source crowd funding to help lift people out of poverty.

If you’re reading this post, the chances are you could spare $25 and not even notice it was gone. But to a Kiva borrower, a $25 loan can help start a business that provides increased income to a family, enables their children to go to school, and thus plays a part in changing their life trajectory.

Kiva money gets recycled: As loans are repaid, the money is lent again to new borrowers. For example, according to the Kiva website, my first loan helped a group in Tanzania to set up a food market, then went on to help a woman in Samoa to improve her house. It is now assisting a young man in Palestine to expand his business. (In reality, this is a bit of an illusion. Our contributions go from Kiva to microfinance institutions, where they are pooled and contribute to the totality of lending. The borrowers on the Kiva website are real but are not direct recipients of my loan***).

Kiva brings together more than a million lenders. Together, we have made over half a billion dollars worth of microfinance loans to nearly 1.3 million people in 76 countries.

It’s a start.

* Picciotto, R. (2014). Reviewing Democratic Evaluation – The case for a progressive evaluation model. Presentation to ANZEA Auckland Branch, February 20th, 2014.

** file:///Users/julianking/Downloads/Investing_for_Impact.pdf



April, 2014


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