President's Blog

Lately, a number of folks have contacted me for advice about micro-finance organizations that offer sponsorship opportunities.  There are a number of organizations that have websites where you, the donor, can make loans to a specific person whose story and photograph are prominently displayed.

Among the questions people have are: Should I donate to these organizations?  Why doesn’t Episcopal Relief & Development offer similar opportunities?  Are they reputable?

I have a firm policy of not commenting on other organizations and how they conduct their work.  That’s not my place as president of Episcopal Relief & Development.

However, I do have a series of questions that people should think through when considering supporting these organizations.  Among those questions are:

• Is the organization doing micro-finance programming itself, or is it marketing other organizations’ micro-finance programs, or passing your money along?
• Is the organization a not-for-profit or a for-profit enterprise?
• Is there a reason that some potential micro-finance beneficiaries are chosen and not others?  What are the criteria?
• Is the micro-finance initiative part of a long-term integrated development strategy for the communities where the loans are being made? 

Depending on how you feel about the answers to these questions, you should make a decision that works for you.

For our part, Episcopal Relief & Development is not a micro-finance agency as such.  We are committed to an integrated development approach, which means using micro-finance as a tool in our programs focused on health, food and disaster mitigation.

For example, after the 2004 Indian Ocean tsunami, our partners in Sri Lanka used micro-finance strategies to get boat building operations up and running to supply boats to the fishermen who lost their equipment.  This had the advantage of getting people back to work quickly and restoring dignity and livelihoods.

The appeal of sites that offer the donor an apparently direct relationship with the beneficiary is very understandable.  However, my personal reaction to those sites is similar to my reaction to child sponsorships

 http://www.er-d.org/blog/index.php/2009/05/29/reflecting-on-child-sponsorships/

I think there’s a very high risk of commoditizing poverty and poor people so that we, the donors, feel good.  That’s the main reason that we don’t offer direct sponsorship of microfinance beneficiaries.