Your Help Is Hurting: How Church Foreign Aid Programs Make Things Worse

…when he gave something the first time, there was gratitude; and when he gave something a second time to that same community, there was anticipation; the third time, there was expectation; the fourth time, there was entitlement; and the fifth time, there was dependency. That is what we’ve all experienced when we’ve wanted to do good. Something changes the more we just give hand-out after hand-out. Something that is designed to be a help actually causes harm.

Recently I interviewed Peter Greer via Skype to talk about philanthropy, and why it often makes things worse. Peter is the President and CEO of Hope International, which is a microfinance organization. If you don’t know what microfinance is, then this is your opportunity to learn about it. I think it is probably the most important phenomenon in international philanthropy right now, and in economic development. Peter Greer and the work that he’s doing with Hope International is I think taking this idea of microfinance to a new level, so it was an honor to spend time with him. You can listen to the entire interview by clicking here.

Transcript:

Jerry: “Peter, thanks so much for joining us.”

Peter: “It’s a privilege. Thanks, Jerry.”

Jerry: “Peter, this area, microfinance, is probably the area of philanthropy and alms-giving that gets entrepreneurs more excited than any other area. When an entrepreneur writes to ask me a question about philanthropic matters, they are almost always more intrigued by microfinance then they are by any of the more traditional approaches to philanthropy. This podcast is kind of aimed at that investor class and that entrepreneurial class, so I think that’s why we’re focusing on this and bringing this to them today. But just in case somebody doesn’t know what that is, let’s just start from the basics: What is microfinance?”

Peter: “Sure. Well, really interesting that you say that because that actually is the history of Hope. There’s an entrepreneur named Jeff Rutt, and after the fall of the Soviet Union he had a desire to go over with his church and help. So, initially they did what people so often do, which is see that people don’t have food and then send over food, and see that people don’t have adequate clothes for the harsh Ukrainian winter and then go in their closets and send things over. And all of that is good, all of that is appropriate, all of that is needed in response to a crisis. But as Jeff did that, after a couple of years it was the team in Ukraine that eventually said—“

Jerry: “Your help is hurting.”

Peter: “Exactly, yeah. And anyone that’s been involved in philanthropy eventually comes to that point. When you try to help, you try to give things, you start to have the consequences. There’s an author Bob Lupton, who really nails it when he says that when he gave something the first time, there was gratitude; and when he gave something a second time to that same community, there was anticipation; the third time, there was expectation; the fourth time, there was entitlement; and the fifth time, there was dependency. That is what we’ve all experienced when we’ve wanted to do good. Something changes the more we just give hand-out after hand-out. Something that is designed to be a help actually causes harm. And so, microfinance turns that model on its head, and instead of going in and just saying, “We’ve got a lot of things you don’t, so we’re just going to give it to you,” it turns that model completely on its head and says, “Every single individual is created by a God who loves them, and that means there is worth and there is dignity and there is ability.” So we go in and say not, “What don’t you have,” but, “What do you have? What are you dreams for your kids? What are your aspirations? What are your hopes? What is it that is in your hand to do?” That changes everything. Microfinance then is the belief that everyone has ability, everyone has capacity, and it asks the question, “What is required to unlock that potential in that community to get them in productive employment?” And so, just real quick, just what that means is we do training, we do financial literacy, we do a place for people to save money, and then for people that are ready, we give them access to small loans so they can invest in their business ideas.”

Jerry: “’Your help is hurting’ is an incredibly powerful four-word sentence. And I’m just kind of wondering, why is it that the philanthropic world is so slow to see this, because I think—I don’t think Jeff Rutt’s philanthropic endeavors just in Ukraine were hurting, I think a lot of philanthropy is hurting. A whole lot of well-intentioned help is hurting, and yet global philanthropy is a huge, huge business. So why isn’t this whole industry of helping people picking up on the fact that in many cases, their help is hurting?”

Peter: “Yeah. I don’t want to be too cynical or negative. Maybe just a little bit.”

Jerry: “Just as much as truth requires.”

Peter: “Yeah. Right. So there’s a challenge here, right? Because there’s the wrong constituency oftentimes in how organizations are rewarded. So let me unpack that little more: So, in a business setting, you’ve got to provide value to your customers so that they pay for the goods and services that you’re providing. Philanthropy is unfortunate in that the people that your customer base is made of oftentimes are the people that are writing the checks to support you. The people that are writing the donation checks are what keep organizations in business oftentimes. The people that are receiving the services, then, are oftentimes not paying for the services, and therefore their voice is not heard. And so within the nonprofit space, we’ve created a system where he/she who tells the best story is the one that’s rewarded. There’s an incentive to push down the stories that are not of positive impact. There’s the incentive to pretend that there are no negative things that happen, there’s the incentive to make sure that our failures are never made public, and there’s the disconnected between who’s paying for the service and who’s receiving the services. When you disconnect those two aspects, you do not have accountability that acts in the best interest of the people who are receiving what we are all trying to do, which is just to help in places of great need.”

Jerry: “So, in some sense, the philanthropy, the global-development philanthropy industry, is an industry that trades stories for dollars. Now if it’s an honest operation, the stories it tells are true and the dollars it receives it uses as intended. I’m assuming that the vast majority of it is honest. But still, at basis, it’s the trading of a story for an amount of money, and the story that makes the giver feel best is the story that attracts the most money, even if it’s not the story that actually does the most good for the recipient.”

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Your Help Is Hurting: How Church Foreign Aid Programs Make Things Worse

Giving help is good, but it can often makes things worse

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