Bill Gates and Warren Buffett are trying to convince wealthy Chinese of the value of philanthropy. It has been a tough sell, because the Chinese think that job creation will help the poor out of poverty more quickly and effectively.
They have a point; many Americans agree, as exemplified by a story that illustrates some things that work in philanthropy today and some things that don’t. Here’s the story, which is true:
I had a long chat with a 20-something man at a wedding reception. I knew his parents well but had never gotten to know him. He was a likable fellow who was searching for a career. He told me that he was working as a laborer for a landscaping company but wanted to start his own business.
I described MicroGrants, the program that I had just started to give $1,000 grants to “poor people of potential” to start their own businesses or get them tools or work attire for their first jobs. I didn’t even hint that I was considering a grant for him, as I didn’t want to get his hopes up. I wanted to check out the idea with his parents first.
The next day I called his father and told him of my idea. He said he’d call me back after he talked it over with his wife.
Later that day, my friend called me and said something like this: “Joe, we think it would be a mistake to give him a grant. We’ve always taught him to work for his money, and he doesn’t seem to get it yet. He’s never been good with money, and we think a grant would send the wrong message. We also think there are others out there who would benefit from a grant, so we decided to give your program, MicroGrants, $1,000, but to be used by someone who would use it well and not be spoiled byit.”
Imagine the prudence and objectivity! Most parents invest tons of money in their own children no matter the evidence, but wouldn’t ever think of investing in a stranger’s child. Every year for the past three years, this couple has donated $1,000 for someone else’s child and has never asked me to consider their son as a possible recipient.
Their son had a strong outward case to get a grant, but not a real one for those observing him more closely. These wise parents understood the pitfall.
But there are cases where a wise timely investment can make a huge difference in one’s life. If the persons of potential have some “skin in the game” — if they have the right attitude and are willing to be accountable — then the investments will bear much fruit.
That’s one of the lessons I’ve learned from running three nonprofits during 40 years in the business and giving 1,500-plus MicroGrants. Some others:
•We don’t always have wise parents to tell us the truth about investing in their children. I’ve found that the next best thing is “partner agencies” that know their clients well — agencies like Project for Pride in Living, Twin Cities RISE! and Summit Academy OIC (to name just three). They select the best prospects from their caseloads and send them to me for $1,000 checks.
•Those agencies coach and monitor their clients to ensure the best results of the grants. Grantees themselves have said that being coached in a job or career can be critically important.
•We believe in grants, not loans, because so many poor people already have been burdened by debts they cannot always repay.
•A thousand dollars may not seem like a lot, but-sometimes with additional help from a partner agency-it is enough to lift a person up to the next step to self-sufficiency.
•Both the Chinese and the Gates-Buffett methods of investing in the poor are effective — if the right poor are selected for the job or cash investment. So the next time you want to help the poor or your own children advance on that journey to self-sufficiency, make sure they are willing to take ownership by investing some of their own time or treasure.
And if you want to help the poor but don’t have the time, give MicroGrants (or a partner agency) a gift, and we will make sure the “due diligence” is done, and you get your well-deserved “bang for the buck.”
Joe Selvaggio is chair of the board of MicroGrants.