Overcoming ‘compassion collapse’ with crowdsourced CSR

Marcia Savage Marcia Savage is the features editor at CRN, a publication of UBM. She previously worked at Tech Target and SC Magazine as a writer and editor covering the information security industry. She started her journalism career as a daily newspaper reporter.
About Marcia Savage (4 Posts)

Getting individuals involved in helping to tackle the world’s immense problems — poverty, hunger, unemployment, environmental issues — is a tough task. People don’t feel they can make a difference.

“The problems we know are so big that compassion collapse gets in the way of taking action,” Premal Shah, president of Kiva, a nonprofit microfinancing site, said in a keynote at Business4Better.

Premal Shah

Kiva tries to overcome this problem with a website that makes social issues personal and “human scales” the world’s problems, Shah said. The site provides information on entrepreneurs, such as a 25-year-old woman in Kenya needing a loan to help with her business, and enables individuals to make loans.

Since it was founded seven years ago, Kiva has more than 1 million registered visitors that have made loans totaling $420 million. One million entrepreneurs in 70 countries have received loans with 83 percent going to women. Their repayment rate is impressive: 99 percent. Kiva’s field partners vet, administer and distribute the loans.

Shah said in beginning to work with corporate partners, Kiva learned that businesses are looking for three things: an activity with a high-participation rate, high visibility and a high ROI. What Kiva offered their corporate partners is an interesting twist on traditional CSR: Instead of a small group in a business figuring out what to do with CSR funding, employees and customers could figure it out. Essentially, “crowdsourced CSR on Kiva,” Shah said. Loan repayments are returned to the business.

For example, TripAdvisor wanted to figure out a way to thank the reviewers on its site. It partnered with Kiva with a test budget of $250,000. Each time someone writes a review for a country in which Kiva operates, TripAdvisor sends them an email offering the opportunity to make a $25 loan to an entrepreneur in need, courtesy of TripAdvisor. With a seven percent click through rate on the emails, the reviewer participation has been tremendous, making TripAdvisor the top lending team on Kiva for three months in a row, Shah said. Reviewers have added another $250,000 in donations on their own, he added.

“Once the training wheels are off, they start doing good on their own,” Shah said.

Another company that teamed with Kiva, e-Rewards, has 1,200 employees, many of them millenials who wanted the company to stand for something more than profit. Each employee was given the opportunity to use a free $25 Kiva gift card; 75 percent participated, giving 2,000 low-income entrepreneurs loans.

Capital One partnered with Kiva in order to provide $500,000 in matching loans to small businesses; in the first year, 17,850 lenders were matched, supporting 165 U.S. small businesses, Shah said. The real cost to the company in the first year is $5,000.

By bringing need to a human level on Kiva, it’s possible to even reach individuals that may never otherwise get involved — like those who spend their free time watching the Kardashians — he said.


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