Civil Society, Economy & Trade, Financial Crisis, Headlines, North America

FINANCE-US: Helping People One Paycheque From Disaster

Enrique Gili

SAN DIEGO, California, Oct 9 2008 (IPS) - A decade ago, few could envision that making a charitable donation would be as simple as a mouse click.

"Peer-to-peer philanthropy" mixes Web 2.0 technology with compassion to make the act of giving online easy, enabling nonprofit organisations to experiment with citizen-led donor programmes and in the process create a new breed of philanthropist.

Among them is Keith Taylor, whose mission is to bring philanthropy to the masses. In 2002, he had an epiphany of sorts, after with his own brush with poverty. As a cash-strapped graduate student shuttling between part-time teaching jobs, his own personal finances were precarious. Friends helped him weather a financial crisis.

"I realised the people who had helped me were not wealthy, but kind," Taylor said.

To express his gratitude he built a simple homepage with the expectation that a few browsers might stumble upon his offer to help anyone in need of covering a one-time expense. Instead, he received a flood of responses, many from people who themselves wanted to help others, pledging to make cash donations of their own.

And so the impetus for Modest Needs was born. "It wasn't about money but doing the best with what you had," said Taylor.

The nonprofit organisation is designed to help the working poor during unexpected financial emergencies, saving people from falling into a downward spiral of poverty. It is especially geared toward the growing segment of the population squeezed by credit card debt and the mortgage crunch.

Modest Needs matches small charitable donations from people able to give with requests for assistance.

The site has the look and feel of a community bulletin board that reflects its back-to-basics approach to charity. "The entire point of Modest Needs was to create a community for people that didn't have a community of their own," said Taylor.

Donors get to rank requests in terms of their urgency, directing money where it's needed most. Even small amounts can make a difference in the lives of cash-strapped recipients. Judging from the outpouring of testimonials, its value often exceeds the cost of the gift itself.

The requests can be as heartrending as they are mundane – appeals to meet ordinary expenses such as medical bills, fixing a car, or paying rent are typical.

Responses from recipients are heartfelt: "I sincerely thank all of you who helped me with my daughter's daycare bill. I almost can't believe the generosity. When I received the email saying my grant had been funded it brought tears to my eyes, " reads one post from the registered user koreenharper.

Along with the applicant's request for assistance, the site notes whether they are above or below the poverty line, and if they qualify for other types of financial support.

Taylor believes the strength of Modest Needs lies in its ability to respond quickly to the needs of donors and beneficiaries, unlike the endless forms and red tape often involved in state-funded assistance. "The beauty of an organisation like this is that it can be fluid and organic," he said.

A staff of eight administers this programme that would have been impossible to run without the benefit of online billing systems created during the dot-com era. Paperwork can be processed within hours or days, rather than weeks.

In 2007, staffers funded 1,582 of 2,962 applicants, after receiving 16,000 requests for assistance, dispersing 884,990 dollars in the process. The Herb Albert Foundation has also pledged to match any donation, giving 1.4 million thus far.

They receive up to 2,000 requests per month, a number which is expected to rise in the current financial crisis. Modest Needs plans to give away 2.0 million dollars by year's end. According to Taylor, the end-of-year holidays are the busiest season.

Technology is also changing the way people give, proving to be a boon for philanthropic web sites that have emerged in recent years. Kiva, GlobalGiving and Modest Needs, to name a few, are reaping the benefits of social networking tools that provide mainstream access to thousands of projects in need of funding around the world.

United Nations studies indicate that seemingly intractable public health and poverty problems could be resolved if adequate funds were properly applied. With governments failing to meet their financial obligations, citizen philanthropists are getting involved.

In doing so, organisations are reaching out to a new demographic that has been largely ignored – average people who hold down day jobs. Philanthropy used to be the exclusive domain of the well heeled and affluent. The goal was to become filthy rich first, and then give.

Philanthropy today is becoming more open and democratic, said Peter Deitz, the founder of Social Actions, a non-profit initiative that chronicles the changes taking place within the philanthropic world.

He calls the phenomenon "Philanthropy 2.0". "The Internet is breaking down barriers, allowing anyone to come into this space as a donor and a receiver," he said. This enables information to flow both ways, from the bottom up and top down.

In an ideal world, reaching out to the multitudes wouldn't have a downside. But anyone who's had online encounters with nefarious scammers promising untold riches knows otherwise.

As a precaution, Modest Needs requires applicants to submit a bill, proof of identification and an address. If approved, bills are paid directly to the creditor within 7-10 days. Recipient awards range from 300 to 1,000 dollars.

The criteria are stringent. However, Modest Needs insists on making grants to people in need of a short-term solution but who are not otherwise down and out. "At some point in time, most of us have needed a little help," said Taylor.

In reality, Modest Needs isn't in the business of making grand gestures but strives to provide a platform and give voice to people whose names won't appear in the society column – making giving a true act of compassion.

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