What Happened To The Microfinance Company Kiva?

August 14, 2023 8:20 AM

In MIT Technology Review Mara Kardas-Nelson looks at organizational changes that have been made since 2019 to Kiva.org, the well-known microlending organization, including multi-million dollar salary hikes for executives, charrging fees to the borrowers, and a lenders' strike organized by contributors who were disturbed by the changes. (MIT Tech Review allows some free articles, but you might hit the paywall)
posted by briank (19 comments total)

"Combined, Kiva’s top 10 executives made nearly $3.5 million in 2020. In 2021, nearly half of Kiva’s revenue went to staff salaries."

The former is reprehensible. The latter is not. Pay staff well and don't apologize for it, but those staff should not be only the C suite.
posted by late afternoon dreaming hotel at 8:25 AM on August 14, 2023 [16 favorites]

Time to log off?
posted by parmanparman at 8:38 AM on August 14, 2023

Combined, Kiva’s top 10 executives made nearly $3.5 million in 2020.

That works out to an average of 350k per person, which seems like a pretty normal amount of money for an executive to make in a major US city (less, even).
posted by airmail at 9:10 AM on August 14, 2023 [13 favorites]

Protocol, a blockchain-­enabled credit bureau

FLAMES ON THE SIDE OF MY FACE
posted by The Ardship of Cambry at 9:14 AM on August 14, 2023 [9 favorites]

That works out to an average of 350k per person, which seems like a pretty normal amount of money...

Probably best to read the article. It is more nuanced than that. Some of that pay I gather is not an annual salary but compensation for only weeks or months of work.

The leaders of other microlenders—including Kiva partners—make far less. For example, the president and CEO of BRAC USA, a Kiva partner and one of the largest nonprofits in the world, made just over $300,00 in 2020—not only less than what Kiva’s CEO earns, but also below what Kiva’s general counsel, chief investment officer, chief strategy officer, executive vice president of engineering, and chief officer for strategic partnerships were paid in 2021, according to public filings. Julie Hanna, the executive chair of Kiva’s board, made $140,000 for working 10 hours a week in 2021. Premal Shah, one of the founders, took home roughly $320,000 as “senior consultant” in 2020.

Even among other nonprofits headquartered in expensive American cities, Kiva’s CEO salary is high. For example, the head of the Sierra Club, based in Oakland, made $500,000 in 2021. Meanwhile, the executive director of Doctors Without Borders USA, based in New York City, had a salary of $237,000 in 2020, the same year that the Kiva top executive made roughly $800,000—despite 2020 revenue of $558 million, compared with Kiva’s $38 million.

posted by vacapinta at 9:24 AM on August 14, 2023 [21 favorites]

Don't forget the other sentence: In 2020, the CEO took home over $800,000.

Eight hundred grand is a lot of damn money for watching other people make microloans.

I always thought that Kiva was exactly the sort of democratizing, disintermediating dream that the Internet promised in the mid-1990s. *sigh* Goddamn bankers...
posted by wenestvedt at 9:24 AM on August 14, 2023 [8 favorites]

This is why we can't have nice things.
posted by zadcat at 9:37 AM on August 14, 2023 [3 favorites]

Kiva alternatives, anyone?
posted by gottabefunky at 9:50 AM on August 14, 2023 [1 favorite]

which seems like a pretty normal amount of money for an executive to make in a major US city (less, even).

usually when I think 'non-profit', I don't think 'yea we should pay this and nine other people like them in the c-suite at least 350k'

I'm usually thinking about the people doing the actual work of the org that isn't money-raising and chumming with the rich corpos that are getting paid 10% of the market salary for a similar role in the private sector who are also probably being encouraged to work weekends and overnights 'for the good of the cause' and also because 'we just can't hire enough people to run our events'
posted by paimapi at 9:58 AM on August 14, 2023 [5 favorites]

It seems to me like what Kiva is selling is mostly a way for individuals or small communities in the West to feel like they're able to do some good in the world--which the people on the other end probably care about. If Google can do it more efficiently, it's going to be Google (and more fees). I feel bad for these folks because they were trying to do good, but it's all a bit of a scam and they're small time money.

Pay staff well and don't apologize for it, but those staff should not be only the C suite.

Has that ever once happened in the history of a nonprofit? The whole point of a nonprofit is for one or two people in tech, married to a tech person, or in "representational entrepreneurship" to self pay themselves into new houses while the staff of all women/nonbinary people get paid $45k a year each and post on AskMefi panicking because they've run out of Valium suppositories which they need because they have to share a bedroom with a guy named Racial Bill in order to make rent in whatever coastal city the nonprofit is located in. This is not a true story because the true ones are actually more depressing due to the non-involvement of Racial Bill, but I have never once heard of anyone making it on a nonprofit salary.
posted by kingdead at 10:27 AM on August 14, 2023 [16 favorites]

TLDR:
Kiva's leadership is focused on 'expansion' while users think recent changes are a departure from how the company should work.


Some long time Kiva users banded together and when on strike:

• the fees charged to microfinance institutions by Kiva is the top concern. It is no longer simple on the Kiva website to know these fees. These fees are key to understand how predatory the terms of a particular loan might be. Generating revenue for Kiva from the poor borrowers through these fees is seen as unethical.
• Kiva program in the US offers zero-interest loans to small businesses domestically, while other nations face much higher fees, which is particularly unfair.
• the new fee revenue is going to support programs like Kiva Capital. The argument is that it is "unethical for an investor like Google to be able to make money off microfinance loans when everyday Kiva lenders had expected no return for more than a decade"
• Almost half of Kiva’s revenue is going to staff salaries, which have nearly double over the last few years. These salaries appear to be out of line with other similar organizations

Towards the end of the piece the CEO of VisionFund Mongolia is interviewed and they note that they prefer the new funding model as it shifts some of the financial risk onto Kiva and still offers better rates than other financial sources. However, the article includes a quote from Hugh Sinclair who argued that “the client of Kiva is the American who gets to feel good, not the poor person.” So Kiva's changes aren't universally hated, but pissing off core users and generally dickish means the growing enshitifcation has swallowed up Kiva.
posted by zenon at 10:32 AM on August 14, 2023 [4 favorites]

I have never once heard of anyone making it on a nonprofit salary.

Hi, I am a person who could make it in my city on my nonprofit salary.* I have several friends in other nonprofit orgs who are also comfortable in my city. Please don't paint ALL nonprofits as massive money grabs for shitheels. Some of our orgs do really, really good work and employ really, really good people.

*I am in a dual-income relationship but if I wasn't, I could live on my salary alone.
posted by cooker girl at 10:55 AM on August 14, 2023 [24 favorites]

"The whole point of a nonprofit"

This sort of hyperbole doesn't really serve the discussion well. Yep, the scenario you refer to exists. It is not all non-profits, not sure it's even a large minority of non-profits. But that kind of caricature lobbed into a discussion is mostly a derail because people will now spend a bunch of time lobbing counter-examples.
posted by jzb at 11:16 AM on August 14, 2023 [8 favorites]

Ineffective Altruism?
posted by rhizome at 1:01 PM on August 14, 2023

I work for a nonprofit. I make ~$180,000 per year plus great benefits. I don't feel guilty.

I left a job making close to $500,000 per year to take this one. I consider this pay cut a donation. I could've just donated this money, but I knew I could provide more value by contributing directly as an employee. Since I've joined, I've instituted policies that have saved the company around 6x my salary per year.

The reality is, it's difficult to hire effective people in certain roles. It's much more difficult when your primary benefit is good feels. Yes, people are willing to take a paycut to do good things, but there's only so much a person can justify. Yes, it's a shame that nonprofits have to spend so much money on employees, but ensuring your employees are happy and well taken care of helps to increase employee retention and productivity.
posted by wies at 1:33 PM on August 14, 2023 [17 favorites]

Mefi's own Kiva
posted by The corpse in the library at 5:32 PM on August 14, 2023 [1 favorite]

As a small-time participant, what can I do with the outstanding loans I have and the sub $50 balance on my account? I don't think you can withdraw that money, right? Is there an option to donate it somewhere (not Kiva) and stop loaning it out?
posted by soelo at 8:37 AM on August 15, 2023

I was able to withdraw my current balance, but only to Paypal.
posted by soelo at 1:10 PM on August 15, 2023

Enshittification. The fees is shit. The deal with Google is shit

Once non profit management starts hanging w dregs like Google, they start acting like owners, even tho they are not owners.

Support the non profit workers.
https://unionbase.org/unions/progressive-workers-union-pwu
posted by eustatic at 4:08 PM on August 17, 2023 [1 favorite]