Investing... Kiva

For some time I have been looking for socially responsible and culturally relevant ways to invest some of my “disposable income”. Jews and Muslims have this sort of thing built in to their religion. To some extent, so do Buddhists. Right Livelihood (in the modern sense, how we make our money) and Right Living (how we spend our money) are two concepts that seem to come together on this issue. Careful analysis of my own spending revealed there were better ways I could use my money after meeting my own obligations.

I am a firm believer in “thinking globally and acting locally.” I also know that no change in the world at large will take place without individual change. With these values in mind, I will talk below about two things I am doing that have been a long time coming.

After procrastinating for several years, I finally made time to investigate my options for socially responsible investing with my retirement account. Two separate representatives at Fidelity Investments (my employers fund manager) explained that there were no options available for my current employer plan. Knowing I would probably not get much further, I decided to talk to my HR representative anyway.

According to HR, Geisinger gets a handful of requests for socially responsible options each year, but they do not currently offer any. The enrollment for those options was very low, and the associated fees high, so it was not cost effective for Geisinger to keep the plan available. One problem is that “socially responsible investing” is still somewhat vague. It does not have its own investment “class” on the spectrum of risk/return like money market and international funds do.

My only option, I am told, is to investigate each mutual fund offered by my employer, and then find each underlying company within that fund. If I find green funds, or specific companies I believe in, then I can move my options around to those funds. If not, then I am on my own, requiring a separate, private investing account. The HR rep admitted that most people do not care about their retirement plans enough to even open their statements, let alone look for special investments options. I think if more people did, then there would be more people interested in socially responsible investing.

Of course, it will take some time to go through those funds and paperwork. What I hope to accomplish is to pull my money out of places I don’t want it to be (cigarette companies, weapons systems, WalMart, etc.) and place it into more suitable places. I’d also like to pick and choose what companies and manufacturers get my money because there are quite a few out there doing good work. We’re not talking huge sums here, but I figure every little bit helps.

Outside of investing (where there is some expectation of return), last year (2006) I learned of Kiva.org, a web site designed to link lenders with entrepreneurs in developing nations. This seemed like a great idea, and I intended to enroll. When I first began studying Kiva, their web site crashed after a PBS program about them aired. The response was so overwhelming that their servers couldn’t handle the hits!

Since then, Kiva has been in the back of my mind. NPR recently ran an interview with Bill Clinton who apparently mentions Kiva in his new book “Giving”. Reminded by this, I recently returned to the site to sign up, and found that they still existed, but due to overwhelming response from the Oprah Winfrey show and Bill Clinton’s book, Kiva currently doesn’t have any clients in need. I am sure there are other similar sites, but judging from the response Kiva has had, and the number of people involved, they will probably be my choice once some new postings are made.

Ideally, what I’d like to do is find entrepreneurs in specific lines of work (food production, water treatment, education, arts) to loan small sums to – not just to make myself feel better as a world citizen – but in some small way to combat the negativity that has been created by so many other people with so much more money. I try to do what I can on the local level by supporting intercultural programs and battling racism in small ways, and by producing art that reflects on many of the same issues.

More about Kiva (from their website):

Kiva.org is a non-profit that allows you to make a small 0% loan to low income entrepreneurs in the developing world (microfinance). Individuals like you can help provide affordable working capital for the poor -- money to buy a sewing machine, livestock, etc. -- and empower them to earn their way out of poverty.

They go on to say that you, "get a higher return on $25 helping someone build a future than the interest [a] checking account pays."

I have to agree.