Habitat has always worked with a pure donation and/or sponsorship model, both the International organization and the local chapters. You either gave a donation, or you could sponsor a home. Many companies, as well as faith-communities, sponsored homes - with the sponsorship going as high as the $100,000 range in some cities(that would be the high end; here in metro Atlanta, the sponsorship cost is around $75,000 per unit). Sponsors usually arrange to supply volunteers for builds, too.
Quick shout-out for Atlanta HfH: Larrie Del Martin & her team have one of the best run nonprofit organizations in this area. This is the 25th anniversary of the local chapter, celebrated with a new build - townhomes!
Individual donations made possible other homes, built with community volunteers. Same great result.
And, because the homeowners pay for their homes through a no-interest loan, the money continues to build more homes.
Overall, it seemed highly successful as funding models go.
So why is Habitat pursuing micro-investing?
Because it can then "show the money" to those people who want a definitive understanding of where and how their donation - now a loan to the homeowner - is making an impact. The micro-investing program, which will be run in conjunction with the Calvert Foundation, creates that opportunity.
It's also potentially a very low-cost method of increasing the capacity of Habitat to build more homes, if the donor/investor chooses to invest by internet. (Note: online investment requires a $100 minimum; alternative investment via the Calvert Foundation requires a $,1000 minimum investment.)
Kiva, one of the first micro-investing operations, has been very successful in bringing attention to the concept of micro-investing (which they call micro-loaning). Over 270,000 investors have participated, putting more that $27 million into reducing poverty by funding borrowers in developing countries.
And very successful at getting media attention, with recent coverage in Forbes, Time, coverage on Oprah, and more ... all of which stirs the pot, bringing more new micro-investors who are interested in relieving poverty through the "hand up, not a hand-out" philosophy.
By being able to show the specific borrower, Kiva does something that Habitat was unable to do - bring the involvement to a personal level. Like the Save the Children television commercials of my youth, it's so much more compelling to know the name of your recipient, whether it's a donation or a life-transforming loan.
So it does make sense that Habitat would want to adopt this model - to put faces on the family that will inhabit the home that the donor/loaner builds.
The big open questions - will this model reduce or increase the traditional donation inflow to Habitat?
P.S. And this morning, I find news that brewer Samuel Adams is jumping into a form of micro-lending, too ... with Accion. Read more ...
