3 things and a newsletter

Canaan Gondwe found Moringa powder at a health fair in Malawi.

Canaan Gondwe found Moringa powder at a health fair in Malawi.

1. Fall newsletter is here!

The newsletter is off to the printers! You can get early access to the stories and photos of local empowerment (in FULL COLOR!) by downloading a copy here.

2. Grant impact continues in Ghana

In 1992, even before SIA was officially born, Del Anderson sponsored Newton Amaglo to learn about the “miracle tree” Moringa. The encouragement, support, and information has made a lasting impact. For the last three years, Newton has been traveling back and forth between his native Ghana and China where he is researching Moringa as part of a PhD in Food Science!

A 2008 SIA grant to Newton and his team of researchers in Ghana helped them start Moringa garden plots in schools and prisons. (Read about the prison project here.)

Moringa is highly nutritious and fast-growing, which makes it a good supplement for the poor diets of vulnerable Ghanaians. Newton wrote me this week saying, “The legacy [of the project you funded] still lingers on and has been taking different impacts and dimensions.”

Further proof that a small grant can ripple out to reach many more people than ever imagined.

For more about Newton and Moringa, see here and here.

3. When things don’t work out, share.

Feel-good story of the day: Family Hosts 200 Homeless People for Dinner After Daughter’s Wedding Gets Called Off

4. Pray for Kenya

The standoff between militants and Kenyan forces at a Nairobi mall seems finally to be over, after three full days of terror and over 70 deaths. (Read the latest news here.) There are reports that some of the militants were Somali-Americans from Minnesota, though it hasn’t been confirmed. The situation worries and saddens me and so I ask you to keep all involved, including Somali communities around the world, in your prayers.

Let there be peace on earth and let it begin with me.

The case for giving grants, not loans

The case for giving grants, not loans

Micro-grants? Micro-loans? A conversation with a friend about how our Small Business Fund grants compare with micro-credit programs gave me the chance to explain why SIA gives grants and not loans to help alleviate poverty.

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It used to be common sense that micro-loans were the only way to ensure the sustainability of a micro-finance program and that the act of paying back the loan would instill the sense of “ownership” in the grant recipients. How could a micro-grant – labeled a “hand out” – do anything but create a sense of entitlement on the part of the grantee? We’ve thought that loans were better than grants because they promoted long-term, individual responsibility; but in some markets, loans wreak havoc with indebtednesshostile payment collectors and inflexible repayment schedules. Grants, unlike loans, can create independence and cultivate sustainable development in a community.

A new pottery business in Uganda.

A new pottery business in Uganda.

In 2006, just as the Grameen Bank and Kiva were becoming household names, there was a rush to start new micro-finance organisations and benevolently provide money to the poor. Unfortunately, those funds come at a great cost and with inconclusive effects. Interest rates of 40-100% of the loan principle and travel costs to get to and from the bank mean that people are stuck from the moment they get the money.

Why grants?

A loan is just a financial arrangement in the business of making money for a bank, but a grant creates space for positive relationships and an empowered individual. Spirit in Action provides $150 micro-grants to groups of 3-5 people throughout communities on the African continent. Instead of a debt-collector, we have local coordinators who train grant recipients in business planning, marketing, and basic accounting. The grant cohort also forms a support group.

Receiving a $150 grant – rather than a loan – means that the first $150 in profit from their successful enterprise can help group members go to school, improve their house, or pay for medical care, and is not used to pay back donors. And through our program, some of the additional profits are gifted to others in the community, generating goodwill and further development on the local level. (Read one family’s success story here.)

Sharing the Gift in Malawi.

Sharing the Gift with a cash grant in the community (Malawi).

We are Grant Recipients

Our model for micro-grant sustainability reflects our home-office organisational practices. We recognise that since Spirit in Action relies purely on donations from individuals for our funding, we also are grant recipients. Our supporters don’t ask us to pay them back – they ask us to pay the gift forward to help people as defined in our mission and programmatic plans. By asking our Small Business Fund grant recipients to pay it forward to a neighbor or community member rather than paying the organisation back, we are asking them to do only what we ourselves do. Paying it forward starts with our donors and passes on to many more throughout the world.

Becoming a Giver

Our paying it forward program, Sharing the Gift, suggests to grant recipients that they have received the gift of a grant from Spirit in Action and asks them, “How can you share this gift with others?” The actual form of sharing varies among groups, with input from the local coordinators. Some tithe a percentage of profits toward future groups, others contribute seeds or baby animals to a new group, and sometimes business groups come together to support a project that benefits the whole community.

Sharing the Gift of a pig in Uganda.

Sharing the Gift of a pig in Uganda.

After receiving a grant, people are empowered to be givers in their communities. Fundraisers know that people receive genuine happiness from giving to others; the Small Business Fund and Sharing the Gift enable people who have grown up with very little to have more to share with others and to be respected for their gifts to neighbors.

Unlike loans, which create an immediate indebtedness in the community, grants and a “paying it forward” mentality make development sustainable in the communities where we have funded small businesses. Even without additional grants, local growth comes from small business owners themselves. The development of their community originates with their desire to pay forward what they have received. Grants are not a hand out; they enable people to invest in their communities in a grassroots manner.

**I originally wrote this post for the WhyDev blogWhyDev is an online community for individuals passionate about development, aid, and other global issues. This post was previously on the SIA blog on December 18, 2012.

Do-It-Together Savings!

Some of the CIFORD guardians at their weekly meeting.

Women at a savings group meeting in Meru, Kenya.

Have you noticed that many DIY (do-it-yourself) projects are best done DIT (do-it-together)? A friend’s DIY deck-building work party is much more done as a group rather than a drawn-out process done on his own. And the project is competed much sooner working together with everyone contributing!

So maybe it’s no surprise that the same is also true for DIY saving.

What is DIY saving?

It could be anything from the informal savings and loans group in Malawi (and the recently trained group in Zambia), to borrowing money from family members, to stuffing cash under the mattress for safekeeping.

DIY savings does not just happen in Africa, but in North America too, as highlighted in an NPR Planet Money podcasts* over the summer. This 15-minute episode discussed a man who gave small ($20) loans to friends and a woman in Harlem who was part of an informal savings group called a susu.

I got SO excited listening to the story about the susu because that’s exactly what SIA is helping to start in Kenya. The susus, also called merry-go-round funds, were something Del promoted back at the beginning days of SIA.

So what is a susu? In the story, the susu was a group of 13 colleagues who got together every-other week and at each session they contributed a set amount of money to the pot. Then they drew lots to set the order for when each person got to take the whole collected amount. For example, if there are 10 people in the susu and each person contributes $10 each week, then every week one person gets to take home the $100 pot. Clever, huh?!

It’s DIY because it is under the radar of the formal banking system. But actually, it is DIT with the group aspect making it a more fun AND more effective way of saving.

The group on the podcast mentions three benefits of a susu compared with formal banking. And the benefits are confirmed by stories I’ve heard from similar groups in Kenya:

ciford savings group

The group recorder makes sure that everyone has paid their part for the week.

Benefit #1: Peer Pressure

Raise your hand if you are sometimes temped to buy something that you can’t really afford. Well, a susu provides the good kind of peer pressure to get you to save at a consistent time and at a consistent rate. If you don’t contribute every session, you can get kicked out of the group and people will be mad at you!

If you didn’t raise your hand in answer to the question, you might have some valuable knowledge to share with other group members, providing extra peer pressure to save and ideas about how to do it.

#2 Limiting Access

DIT makes sure your savings are locked in for the duration of the savings cycle. Think of it like a CD savings account – you can’t access the funds once they are paid into the pot, thus saving you from impulse purchases. For women in Kenya, a savings group can help them save money from a harvest to have it ready when school fees become due.

After the savings group business is over; the women sing and dance together.

After the savings group business is over; the women sing and dance together.

#3 FUN!

This is a key part of DIT savings. Saving in a group might make it feel less like a chore, especially when you get to share your plans and dream with friends. People might get excited when they know they are helping you save to buy your first car or take a trip to an international CFO camp (two actual stories of savings usage that I heard in Kenya).  It also has the potential to open up conversations about money that might never happen otherwise.

Many things are more fun and easy when they are done together with friends. Why would saving money be any different? If you are interested in starting a susu – whether you are in North America or Africa – email me and I’ll send you some simple guides to help you get it going and keep it successful! Happy saving.

*A podcast is a short audio file that can be played online, or downloaded onto a listening devise like an iPod or iPhone. Planet Money discusses economics topics, making them understandable to the lay-person.

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The stories we tell (about Africa)

Kiprop

Photos not usually seen: Celebrating birthdays in Kenya.

Stories we tell about ourselves have a tendency to get stuck in a rut. Do you have friends who tell stories of moving from one ailment to the next – back pain, traffic, too much to do – never stopping to appreciate the good things in life?

On the other hand, you know that person who seems to have it all perfectly worked out? They tell stories about smiling children (and grandchildren) and fancy vacations, never letting a struggle slip into their happy stories?

We might prefer the second set of stories to the first – at least I do – but we also might also be aware that there is more to the real life situation than what is presented in either story version.

The full picture – the real life of the person – is so much more complicated.  In real life there are small pleasures and joys amidst pain, and there are challenges that we overcome amidst joy.

Stories about Africa

A similar categorization exists in stories about Africa and charity too. There are stories of desperate children with ripped clothes and hungry bellies. And there are cheery success stories about a program that changes a person’s life.

Both sets of stories about Africa hold truths. Some people daily experience the devastating effects of poverty and structural injustice. For others, there is rejoicing in finally having money for education and three full meals a day.

The challenge is not only relying on one storyline or the other. As I said, real life is so much more complicated than one or the other story. The challenge of good storytelling is to find the joys in the children’s life – the caring aunt or family member – that don’t dismiss their hunger. It’s also acknowledging the long-term challenges of keeping a program going and keeping the lessons fresh.

Seeing the full picture of real life requires us to take a step back and see the threads that connect the story together. The full picture brings to light things that fall out of the disaster narratives and the success stories. The full picture shows the work-in-progress, the tiring effort to make things better, the lessons learned when things don’t turn out right, and the progress lost that can be lost after one poor harvest season.

A picture from the "Finest Cameroonians" Facebook Page, which has many not-your-typical-African photos.

A picture from the “Finest Cameroonians” Facebook Page, which has many not-your-typical-African photos.

The Final Word – Two Goals

I have two goals in laying out these story characterizations. The first is to invite you to always take that step back and look at the bigger story coming from Africa. Specifically, let’s confront our long-held narratives about persistent problems in Africa and look for moments of joy. My second goal is to pledge to try to always tell the bigger picture story with Spirit in Action and our partners. In this way, we can begin to build a more-real understanding of our partners’ communities, seeing in each the unique challenges, joys, setbacks, and steps forward.

What do you think? What stories do you like to hear?

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