Charity and Microfinance
Writer Albert Camus once said, “Good intentions can do as much harm as malevolence if they lack understanding.” That’s sometimes the case with charity.
When the Soviet Union collapsed in 1991, an American church wanted to help those struggling in the Ukraine. For several years, they donated medical supplies, food, clothing, and even money.
In many ways, they did everything right, even cultivating a long-term relationship with a Ukrainian church.
But when they later followed up with the Ukranian pastor, they found that their generosity was actually stunting the generosity of the Ukranian Christians.
Instead of Ukranian Christians giving sacrificially to their neighbors as needs arose, they came to expect another shipment from the Americans. Even worse, the pastor feared his church growing increasingly dependent on outside resources and losing its own motivation for ingenuity and industry.
As Peter Greer and Phil Smith share in their new book, The Poor Will Be Glad, sometimes our best intentions at helping the world’s poor can have devastating long-term consequences.
However, as the authors explain, there are ways to create long-term sustainable solutions—solutions that help people understand the value and dignity of work, while still providing relief.
The authors particularly focus on microloans and creating opportunities for savings. In the United States we have grown accustomed to the availability of credit and to the fact that there are safe places to save our money.
In many third-world countries, there are no such options. Loans and credit are unavailable or come with insufferable interest rates. And mud-walled huts with only a bench for furniture provide little safety for long-term savings.
Authors Greer and Smith explain basic concepts such as creating local savings and credit associations, which can help communities to begin digging themselves out of poverty. Additionally, the authors explain how MFI’s, or microfinance institutions, can make small loans available to the needy.
Prison Fellowship International has also learned how useful these tools can be in helping former prisoners rebuild their lives in some of the poorest countries in the world. Prison Fellowship Zambia is enabling former prisoners to start their own chicken-raising business through a microloan and entrepreneurship training from Prison Fellowship Canada.
Gradually, these men and others who have started small business based on the training are not only making a living, but paying back the lender. Prison Fellowship in Zambia is also using a flour mill business started with local seed money and the help of an outside relief and development agency to employ ex-prisoners.
The fact that charity can sometimes turn sour shouldn’t stymie our generosity. Instead, it should move us to find the best ways to give—especially to the poorest of the poor.
When the American church I told you about learned how their giving was affecting the Ukrainian church, they didn’t give up. They regrouped and came up with a microfinance solution that helped the Ukrainian Christians help themselves.
I encourage you to get a copy of the book The Poor Will Be Glad. You can visit us at BreakPoint.org to read an excerpt.
And then encourage your church to think hard about its charitable efforts. As the old saying goes, sometimes it’s best not to give a hand out, but a hand up.
Further Reading and Information
Searching for Solutions that Work
Peter Greer and Phil Smith | BreakPoint BookTrends | January 13, 2010
The Poor Will Be Glad: Joining the Revolution to Lift the World Out of Poverty
Peter Greer and Phil Smith
Prison Fellowship International
Prison Fellowship International
Beggar Banks and Telephone Ladies: Microloans
Mark Earley | BreakPoint Commentary | September 4, 2009
Mennonite Economic Development Associates (MEDA)