Skip to main content

Millennials will reinvent charity

By John Bare, Special to CNN
June 9, 2013 -- Updated 2350 GMT (0750 HKT)
 A homeless man panhandles in San Francisco, California, in 2010.
A homeless man panhandles in San Francisco, California, in 2010.
STORY HIGHLIGHTS
  • John Bare: Young people are taking entrepreneurial approach to charity
  • In many cases, he says, they're blurring the line between for-profit and nonprofit
  • He says we need policy changes to make social investing easy

Editor's note: John Bare is vice president of The Arthur M. Blank Family Foundation and executive-in-residence at Georgia Tech's Institute for Leadership and Entrepreneurship.

(CNN) -- My niece Sarah is one of the do-gooders with an entrepreneurial bent who's blurring nonprofit and for-profit activities.

Through micro-lending, Individual Development Accounts, creative marketing and a novel kind of stock offering, these disruptors are re-imagining charitable giving and re-purposing investment tools.

Now we need policies and financial instruments to catch up to the movement.

John Bare
John Bare

Sarah is one of more than 900,000 Kiva lenders who have made more than $440 million in loans to entrepreneurs in 68 countries.

Kiva is a nonprofit organization that facilitates micro-loans. Amounts as small as $25 can help someone -- usually a woman -- start or expand a business. The effects can be life changing.

Starting with the $1,000 Kiva fund I gave her as a high school graduation gift, Sarah found time during college to make 30 loans totaling $1,700 to entrepreneurs in 17 countries, from Bolivia to Uganda.

As folks repay the loans, Sarah keeps making new loans and helping more people change their lives. A funding pool that replenishes itself gives Kiva an edge over typical charities. With most cash donations, when the receiving organization spends the money, it's gone for good.

There's a catch: Sarah can loan money to a grocer in Ghana, a farmer in Uganda and a weaver in India -- but she has not been able to loan money to entrepreneurs in the United States.

Because of technical and policy issues with the U.S. Securities and Exchange Commission, it's easier to help entrepreneurs in another country than in our own backyard.

The bright folks at Kiva are creating a work-around. Kiva Zip is an experiment in "person-to-person lending."

Using Kiva Zip, Tommy in West Helena, Arkansas, sought a loan to expand his barbecue and catfish restaurant. Tracy in Pittsburgh is seeking a loan to move her home hair salon into a commercial space. She expects expansion to create three or four jobs.

Kiva Zip comes along as Grameen America is bringing its micro-lending model to more U.S. cities.

Thirty years after Nobel Laureate Muhammad Yunus created Grameen Bank, which has extended micro-finance to 8 million people in Bangladesh, Grameen America now has branches in New York, Los Angeles, Oakland, Omaha, Indianapolis and Charlotte.

Some of the business-charity hybrids are counterintuitive. While many nonprofit groups ask local businesses for donations, the reverse is uncommon. Yet Ross Baird emerged from the University of Oxford in 2009 with just that notion. He created a nonprofit organization, Village Capital, that raises rounds of capital to invest in startup companies.

One foundation invented a new kind of stock offering to turn neighborhood stakeholders into real stockholders.

Fulfilling its commitment to "resident ownership," the Jacobs Family Foundation wanted to transfer a chunk of the equity in a commercial development project to residents living nearby. It took attorneys six years and 40 drafts to invent a way, and in 2005 Jacobs issued the first-ever Community Development IPO.

Residents purchased all 50,000 units of stock, priced at $10 per share.

In Philadelphia, Dr. Mariana Chilton began working with mothers who didn't have enough food. Through Witnesses to Hunger, she put the mothers in front of elected officials to advocate for federal nutrition programs.

Chilton discovered that women from Witnesses to Hunger were also entrepreneurs. Hustling to put food on the table for their kids, literally, these mothers were earning $50 here and there doing hair and nails or babysitting.

Problem is, no one treated these mothers as entrepreneurs. Their business activities were discouraged or penalized, either because of overly enthusiastic local government regulations or upside-down rules of federal assistance programs. The reporting requirements, intended to deter fraud, were not calibrated to accommodate modest income fluctuations associated with their entrepreneurial activities.

Chilton is chipping away at change. Her team is giving mothers technical assistance to bring their micro-businesses into the mainstream. She is connecting the women to bank accounts, and Chilton's nonprofit will match deposits the mothers make into savings accounts and Individual Development Accounts.

Policy changes could help. The federal nutrition benefits should diminish gradually over time, as folks get on their feet. At a moment when we need innovative thinking, the old rules still use a bright-line test to force mothers to choose between food and work.

Further, we need more technical and policy advancements that make social investing easy. Few organizations have the time and resources to chase legal solutions for six years. The next generation of leaders must generate breakthrough solutions that can operate at scale.

A good place to start is MCON13, which is hashtag-speak for a conference devoted to engaging the 80 million U.S. millennials in giving and volunteerism. Next month hundreds of professionals will gather in Indianapolis at MCON13 to crack the code on millennials.

Expect millennials to keep blurring the lines. If Sarah can loan $50 to a farmer in Paraguay, why not a hair dresser in Philadelphia?

Follow us on Twitter @CNNOpinion.

Join us on Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of John Bare.

ADVERTISEMENT
Part of complete coverage on
July 24, 2014 -- Updated 1349 GMT (2149 HKT)
Patrick Cronin and Kelley Sayler say the world is seeing nonstate groups such as Ukraine's rebels wielding more power to do harm than ever before
July 23, 2014 -- Updated 2205 GMT (0605 HKT)
Ukraine ambassador Olexander Motsyk places blame for the MH17 tragedy squarely at the door of Russia
July 24, 2014 -- Updated 1142 GMT (1942 HKT)
Mark Kramer says Russia and its proxies have a history of shooting down civilian aircraft, often with few repercussions
July 24, 2014 -- Updated 1853 GMT (0253 HKT)
Les Abend says, with rockets flying over Tel Aviv and missiles shooting down MH17 over Ukraine, a commercial pilot's pre-flight checklist just got much more complicated
July 24, 2014 -- Updated 1317 GMT (2117 HKT)
Mark Kramer says Russia and its proxies have a history of shooting down civilian aircraft, often with few repercussions
July 24, 2014 -- Updated 1637 GMT (0037 HKT)
Gerard Jacobs says grieving families and nations need the comfort of traditional rituals to honor the remains of loved ones, particularly in a mass disaster
July 24, 2014 -- Updated 1413 GMT (2213 HKT)
The idea is difficult to stomach, but John Sutter writes that eating dog is morally equivalent to eating pig, another intelligent animal. If Americans oppose it, they should question their own eating habits as well.
July 23, 2014 -- Updated 1630 GMT (0030 HKT)
Bill van Esveld says under the laws of war, civilians who do not join in the fight are always to be protected. An International Criminal Court could rule on whether Israeli airstrikes and Hamas rocketing are war crimes.
July 23, 2014 -- Updated 1205 GMT (2005 HKT)
LZ Granderson says Ronald Reagan went horseback riding and took a vacation after the Korean Air Crash of 1983. So why does the GOP keep airbrushing history to bash Obama?
July 23, 2014 -- Updated 1338 GMT (2138 HKT)
Aaron Miller says Kerry needs the cooperation of Hamas, Israel, Egypt and others if he is to succeed in his peacemaking efforts
July 23, 2014 -- Updated 1251 GMT (2051 HKT)
Errol Louis says the tragic death of Eric Garner at the hands of the NYPD has its roots in the "broken windows" police strategy from the crime-ridden '80s.
July 23, 2014 -- Updated 1408 GMT (2208 HKT)
Gordon Brown says the kidnapped Nigerian girls have been in captivity for 100 days, but the world has not forgotten them.
July 23, 2014 -- Updated 1127 GMT (1927 HKT)
Ruben Navarrette says Texas Gov. Rick Perry is right to immediately send 1,000 National Guard troops to the U.S.-Mexico border in response to the border children crisis.
July 22, 2014 -- Updated 1356 GMT (2156 HKT)
Ukraine's president says the downing of MH17 was a terrorist act, but Richard Barrett says it would be considered terrorism only if it was intentional
July 22, 2014 -- Updated 2015 GMT (0415 HKT)
Robert McIntyre says the loophole that lets firms avoid taxes should be closed
July 22, 2014 -- Updated 1535 GMT (2335 HKT)
Jeronimo Saldana and Malik Burnett say Gov. Perry's plan to send National Guard to the border won't solve the escalating immigration problem.
July 22, 2014 -- Updated 1742 GMT (0142 HKT)
Sally Kohn: The world's fish and waters are polluted and under threat. Be very careful what fish you eat
July 22, 2014 -- Updated 1242 GMT (2042 HKT)
Les Abend says threat information that pilots respond to is only as good as the intelligence from air traffic controllers. And none of it is a match for a radar-guided missile
July 21, 2014 -- Updated 1235 GMT (2035 HKT)
Frida Ghitis: Anger over MH17 is growing against pro-Russia separatists. It's time for the Dutch government to lead, she writes
July 21, 2014 -- Updated 1227 GMT (2027 HKT)
Julian Zelizer says President Obama called inequality the "defining challenge" of our time but hasn't followed through.
July 21, 2014 -- Updated 1157 GMT (1957 HKT)
Gene Seymour says the 'Rockford Files' actor worked the persona of the principled coward, charming audiences on big and small screen for generations
July 21, 2014 -- Updated 1417 GMT (2217 HKT)
Daniel Treisman says that when the Russian leader tied his fate to the Ukraine separatists, he set the stage for his current risky predicament
July 18, 2014 -- Updated 1642 GMT (0042 HKT)
Andrew Kuchins says urgent diplomacy -- not sanctions -- is needed to de-escalate the conflict in Ukraine that helped lead to the downing of an airliner there.
July 19, 2014 -- Updated 0150 GMT (0950 HKT)
Jim Hall and Peter Goelz say there should be an immediate and thorough investigation into what happened to MH17.
July 18, 2014 -- Updated 1507 GMT (2307 HKT)
Pilot Bill Palmer says main defense commercial jets have against missiles is to avoid flying over conflict areas.
July 20, 2014 -- Updated 1755 GMT (0155 HKT)
Valerie Jarrett says that working women should not be discriminated against because they are pregnant.
July 21, 2014 -- Updated 1953 GMT (0353 HKT)
David Wheeler says the next time you get a difficult customer representative, think about recording the call.
July 18, 2014 -- Updated 1933 GMT (0333 HKT)
Newt Gingrich says the more dangerous the world becomes the more Obama hides in a fantasy world.
July 18, 2014 -- Updated 1011 GMT (1811 HKT)
Michael Desch: It's hard to see why anyone, including Russia and its local allies, would have intentionally targeted the Malaysian Airlines flight
July 17, 2014 -- Updated 1914 GMT (0314 HKT)
LZ Granderson says we must remember our visceral horror at the news of children killed in an airstrike on a Gaza beach next time our politicians talk of war
July 17, 2014 -- Updated 1206 GMT (2006 HKT)
Sally Kohn says now the House GOP wants to sue Obama for not implementing a law fast enough, a law they voted down 50 times, all reason has left the room.
July 17, 2014 -- Updated 1214 GMT (2014 HKT)
A street sign for Wall Street
Sens. Elizabeth Warren, John McCain and others want to scale back the "too big to fail" banks that put us at risk of another financial collapse.
July 17, 2014 -- Updated 2016 GMT (0416 HKT)
Newt Gingrich writes an open letter to Robert McDonald, the nominee to head the Veterans Administration.
July 18, 2014 -- Updated 1601 GMT (0001 HKT)
Paul Begala says Dick Cheney has caused an inordinate amount of damage yet continues in a relentless effort to revise the history of his failures.
July 18, 2014 -- Updated 1404 GMT (2204 HKT)
Kids who takes cell phones to bed are not sleeping, says Mel Robbins. Make them park their phones with the parents at night.
July 24, 2014 -- Updated 1625 GMT (0025 HKT)
Buzz Aldrin looked at planet Earth as he stood on talcum-like lunar dust 45 years ago. He thinks the next frontier should be Mars.
July 16, 2014 -- Updated 1804 GMT (0204 HKT)
Mark Zeller never thought my Afghan translator would save his life by killing two Taliban fighters who were about to kill him. The Taliban retaliated by placing him on the top of its kill list.
July 17, 2014 -- Updated 1518 GMT (2318 HKT)
Jeff Yang says an all-white cast of Asian characters in cartoonish costumes is racially offensive.
July 17, 2014 -- Updated 0124 GMT (0924 HKT)
Gary Ginsberg says the late John F. Kennedy Jr.'s reaction to an event in 1995 summed up his character
July 16, 2014 -- Updated 1641 GMT (0041 HKT)
Meg Urry says most falling space debris lands on the planet harmlessly and with no witnesses.
ADVERTISEMENT