There’s been a lot of work going on behind the scenes trying to take stock of the progress we’ve made, build on what has worked well, and make changes to what hasn’t quite worked like we hoped. One of those things that hasn’t quite worked is our mechanism for giving back.
Today, we’re really excited to announce a change to how Leave A Trace uses its commissions to make an impact. Rather than donate to charities picked each month, we’re going to fund individuals with amazing projects through a Non-Profit organization called Kiva. They’re the world leader in providing micro finance loans.
We think this shift will:
- Bring us closer to our initial mission of giving back to the places our community actually travels to around the world
- Cultivate a more engaged community around the impact we are having
- Better support Leave A Trace’s longevity
Read on to learn more about why we made this decision, and how we’re going to implement our Kiva based giving!
Why the charity polls weren’t working
To date, Leave A Trace has given over $1000 to 11 different organizations. We’ve done that without taking a dollar in donations and we are really proud of that success.
But we always imagined that Leave A Trace’s giving wouldn’t simply be mailing checks to great charities. The hope was that our giving would excite our community, generate lots of engagement, and be valuable for the charities nominated while helping us build strong relationships with them.
Our initial premise was to pick one charity per country our travelers visited. We would solicit nominations of possible charities, and then hold a poll to pick the winner. This initially started as one poll per country.
But this “one charity per country” model broke down pretty quickly. It diluted our impact (since our travelers were visiting tons of places, leaving very few dollars per charity) and was a logistical burden (we needed tons of charity nominations which we just didn’t get).
To fix those two issues, we gradually picked fewer charities, first moving to pick one charity per continent, and then moving to pick one charity globally. While that did concentrate our impact and ease the logistical burden, it still didn’t achieve our main goals of building community engagement and charity relationships.
We didn’t get many nominations or votes (so the community wasn’t excited) and even with a single monthly donation, weren’t giving enough dollars to get charities enthused. In the words of one director of development, “For ten grand, it’s different, but I just can’t go to my donors and ask them to vote for something with just a few hundred dollars on the line.”
We knew we needed a change.
While wrestling with these challenges, we came across Kiva. Kiva is a Non-Profit micro-finance platform, enabling anyone to fund small loans to those in need of funds around the world. You can read about project details, and select the individuals you want to support. They receive the money, and just like any other loan, pay you back over time. Read more about Kiva here.
Micro-finance was initially popularized by Muhammad Yunus, who won the Nobel Peace Prize for his work. These loans are typically made without the collateral required by traditional banks, broadening the base of possible recipients, and are disproportionately made to women, who’ve been left out of the business world in many countries.
The projects you can support on Kiva span a huge range, with options across 90 different countries funding everything from school expenses and medical bills, to small retail shops and farming operations. Further, you can support loans for as little as 25 USD.
Using Kiva, a Leave A Trace month with 300 USD in commissions can support 12 loans across 12 different countries. Rather than pushing to consolidate our donations to get noticed by large charities, our fund can support many small projects in a significant manner. We can actually support projects in all the countries our travelers visit, which was our aim all along. We can also tell the stories of those we supported in a much more tangible way than we ever could making small donations to larger organizations.
Finally, the loans may be paid back (Kiva has a 97% repayment rate). Supporters receive no interest, but typically get the loan amount repaid. We can use those repayments to fund further loans. Our dollars will have an impact now, and then again and again over time as the loans get paid back.
We love the sound of that, and we hope you do too.
Of course, Kiva isn’t perfect. They’ve been broadly celebrated for the work they’ve done, but have received two major criticisms. We’ll discuss those, and what we’re doing about them, now.
First, the loans lenders select have often already been made. That is to say, if you loan to “Mike” to buy inventory for his grocery store, Mike may already have received the money and have purchased that inventory. This has been criticized on the basis that it’s deceptive and thus Kiva is not as personalized as it appears. Here, however, we aren’t concerned.
The loan repayments are still personalized—we’ll only get paid back if “Mike” actually pays their loan back.
The loans are pre-funded to allow the recipients to take advantage of time sensitive opportunities. This makes sense to us. Someone may need funds now, not in a month once their Kiva profile is up and their loan supported.
Second, the loans often carry interest rates between 15% and 30%. Here, we are more concerned. Though we understand sourcing and collecting on small loans is much more expensive percentage wise than doing so for larger loans (like those more common in Canada or the US), the higher end of the range still seems excessive. For that reason, we are going to monitor the average interest rate of the loans we support, and if it ends up on the higher end, we’ll take steps to ensure we’re supporting only lower interest loans.
How this will work
Because, as we said, we haven’t run a charity poll in the last couple of months, we actually have quite a bit of money to loan right now ($1080 CAD). That could be as many as 32 loans we can make immediately.
Starting today, we’re asking people to help us direct that money. Take a few minutes, check out the loans available on Kiva, find one in the last country you visited, and email us the link. We’ll loan them $25 on the spot. Simple as that. You get to use Kiva, and track the loan you’re supporting, but don’t need to put in a cent.
Further, we’ll be continually soliciting loans to support. We’re imagining this just becoming a part of the travel experience for our community. Whenever you’re about to leave, or you’re just getting back from a trip, go check out some loans for the country, and we’ll support one!
We’ll tell the stories on this blog and in our emails, so everyone will get to see the impact we’re making together.
You go. We give.
What do you think?
While we are always excited to hear from anyone with thoughts on how we operate, and receive suggestions on what to do differently, we think now is a particularly important to get feedback. We want our giving to be transparent and consistent with the whole community’s values, so send us an email and let us know what you think!