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Irregular Times Microgrant: Village Enterprise Fund

Nicholas Kristoff says the best thing Americans can do for poor people living in the Third World is to buy crap made in sweatshop factories where people don’t make enough money to support their families, because even though they’re exploitative jobs, they’re better than the alternative — no jobs at all or sex slavery — and send some money to those Third World countries. This was one of the moral justifications offered by slaveowners in the South: without slavery, slaves would have no food or shelter, so slavery must continue.

Kiva says the best thing Americans can do for poor people living in the Third World is to lend them money with interest and fees often above an annual rate of 50% or even 100%. That’s called usury, and it creates a system in which these microloans often do not help people in the Third World step out of poverty, but rather make them chronically dependent upon high-interest and high-fee microloans to pay back the old loans. Kiva says that its partners’ high interest and fees are necessary because it costs a lot of money to loan poor people money, and that the interest and fees are better than those of indigenous loan sharks. Kiva says this is the best that can be done.

We don’t agree with either Nicholas Kristoff or Kiva. Both assume that the only way to help lift the Third World out of poverty is through an economic transaction, either a purchase of an item at the lowest market price or an investment of money expecting some return. Is it surprising that when you expect money or a product in exchange for your help, it might turn out that you haven’t actually helped much? There is another way to help alleviate Third World poverty. It’s kind of old-fashioned. It’s called charity: giving without expecting anything in return.

When we sell liberal political shirts, we reject the use of third-world sweatshops to produce ridiculously low-priced shirts because the only way you can sell a $10 shirt that’s been shipped halfway around the world is to pay a garment worker a pittance in a deregulated factory that’s polluting and unsafe (if anyone tells you otherwise, ask to see direct documentation of worker wages and benefits… and get ready for a stone wall of silence). So we sell shirts that are only made in the USA under regulated and inspected conditions and with worker protections and benefits. To help get money into the hands of poor people in the Third World rather than concentrating it in the United States, we set aside a dollar every time we sell a shirt and donate it — not lend it — to a cause that helps Third World entrepreneurs or in some other way helps people in the Third World live better lives.

This time around, we’re sending a donation to the Village Enterprise Fund, an organization that distributes small grants to entrepreneurs in East Africa and conducts free, ongoing business education training in for those same entrepreneurs to help them succeed. Village Enterprise Fund is never going to make a profit doing this sort of work, and it’s not going to try. That’s why we support their work. If you’re considering an end-of-year donation and you’re not looking for any direct return, consider the Village Enterprise Fund.

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