Microfinance and Micro-entrepreneurs

By: Julia
Julia is a participant in Allowance for Good's Fall 2015 Emerging Leaders in Philanthropy class in the Elmhurst location.
"I am a Catalyst for Good because...
I can be the change I want to see in the world."
Micro finance is a form of philanthropy, that is also a bit like charity. Micro finance has to do with giving money to someone in need. That person is called a micro-entrepreneur. They may want to start a business or keep theirs running. Giving them this money will help boost them up. But, the interesting part about micro finance is that the entrepreneur pays you back. This creates a connection between you and this other person all the way across the world. You communicate to keep checking up on them, and once they pay you back, you can use that same amount of money to loan to someone else. It's a very self sustaining system. I really like micro finance for that reason.

I think this is a very good idea. It's self sustaining, and easy to give too. You don't need to give a large amount of money to make a huge impact. It also creates a connection between two people from different parts of the world. This helps create awareness and a sense of oneness. It impacts not only the person receiving the money, but the giver as well.

Since the money is paid back after the entrepreneur is able too, you can keep on giving that same donation. It also helps make it seem like the entrepreneur is a business partner, rather than a helpless victim. I believe this will help people not be so scared or feel so disconnected from people in need of financial aid. 

Microfinance: An Overview

By: Sam Crawford-Cloonan
Sam is a participant in the Emerging Leaders in Philanthropy: Explorers class. 

Microfinance is when many donors, each giving a small amount, loan a relatively large sum of money (say, a thousand dollars) to an individual in need (usually in a developing country) in order to make a significant development in that individual's life. The development helps the individual pay off the debt incurred from the loan, and the money is given back to the donors.

I, personally, would invest in microfinance because it's an efficient and effective way of improving the quality of life (QL) of someone in need. The micro-entepreneurs are then able to break the cycle of poverty. Most of those asking for loans have just enough resources to support themselves  sufficiently, but not enough to improve Quality of life. This leads to a lack of ability to support oneself.

Individuals receiving microfinancial loans become able to support themselves and improve their QL. Loans are also more beneficial than a hand out because there is the added responsibility of being able to pay money back, thus the money is required to be used as a means of financial development rather than directly being used for day-to-day support.

For investors, microfinance is a way to give help to someone in need while still being able to make their money back. In that way, it's a very safe investment. A person can donate time and time again as their funds are replenished by micro-entrepreneurs who pay back their loans. Thus, if managed properly, the exchange is fully sustainable.

In conclusion, microfinance is a necessary part of today's world when it comes to linking local philanthropists to global issues on an individual scale, making the 'treasure' section of the pillars of philanthropy (giving time and talent and treasure) easily transferable and available. The next step? Bringing time and talent to that level of availability--and I'd love to see what this generation does to do so.

On an entirely separate note, my favorite experiences in ELP are the ones in which the students are able to have a natural discussion over previously discussed topics. Being able to ask questions and learn more about philanthropy, both local and global, is both necessary and freeing. 

ELP: Explorers Highlights

By: Mary
Mary participated in Allowance for Good's winter 2014 Emerging Leaders in Philanthropy: Explorers program.

My favorite part about ELP was the speakers and learning from them. We got to see what exactly these philanthropists are doing to make the World a better place. Speakers like Sharmila, Bruce, and Charles showed us how their foundation(s) are making the world a better place. Before ELP, I was confused on how foundations obtained their funds. I thought that small foundations only ran on individual donors, and that puzzled me. I was informed that foundations get funds from large family and corporate foundations. I had many questions for Sharmila on how a family corporation is run and what the difficulties are while being on the board of a family foundation. With Bruce, I learned about how the smallest things can affect a developing community. I liked to see his personal pictures of The Adonai Child Development Centre. I was delighted to see how he was making a difference in that community and making an effort to do the most good. Finally, I was fascinated by Charles' foundation. I would never have thought that having a bicycle would make such a big difference to children in developing countries. It made me think more about how to help people in non-conventional ways. 

I will continue to be a young catalyst and philanthropist through travel. It's one of my passions. My ultimate goal as a philanthropist is to see others getting better. I want to go where I've already sent help through money or goods. I want to see an improvement and settle difficulties in an area. I want to talk to the people that I helped. In the future, I want to learn more about micro-loans and organizations like Kiva. I think its very conventional and a gift that can be re-used and sent to many people who need the money. I want to become a donor in the future and watch my money go to people who will profit the most from it. 
Mary, right, listens intently as Charles Coustan presents about his organization, World Bicycle Relief.