Marketized philanthropy

Abstract

As the impact of market actors and their doctrines on philanthropy gradually increases, the debate between the proponents and the critics of ‘marketization’ of philanthropy intensifies. Curiously, the debate has largely centred on ‘philanthrocapitalists’ and philanthropic professionals, while less attention has been devoted to the ways in which the newly emergent philanthropic ideologies and practices are ‘marketed’ to and adopted by the broader audience of philanthropic givers. In response, we explore the ideological elements that make lending through Kiva, an emergent microfinance charity, meaningful to its creators and supporters. A combination of interpretive methods is used to outline Kiva’s ideology of entrepreneurial philanthropy. This utopian ideology is found to legitimize ‘marketized’ philanthropic practices by invoking alternative conceptions of poverty, social progress and philanthropy (i.e. representations of philanthropic giving, philanthropic benefactors and beneficiaries and the relations between them).

Keywords

Charity Kiva gift giving marketization of philanthropy microfinance microlending philanthropic ideology poverty sharing social entrepreneurship venture philanthropy

Introduction

In recent years, we have witnessed a proliferation of imaginative hybridizations of commerce and philanthropy. The growing readiness of business organizations and entrepreneurs to actively participate in philanthropic¹ endeavour (Bishop and Green, 2008) and the intensified calls for the adoption of market thinking and methods in the field of philanthropy (Edwards, 2010) have intensified the ongoing debate regarding the ‘marketization of philanthropy’ (Nickel and Eikenberry, 2009). On the one hand, hybrids such as ‘venture philanthropy’ (VP) (Moody, 2008), ‘philanthrocapitalism’ (Bishop and Green, 2008) and ‘social entrepreneurship’ (SE) (Dees, 2007) have inspired hopes of bringing about a ‘philanthropic renaissance’ by breaching the gap between philanthropy and business (Reis and Clohesy, 2001). On the other hand, incursions of market thinking into philanthropy have been suggested to endanger the independent, social essence of philanthropy (Edwards, 2010, Eikenberry, 2009).

Rather than vilifying or uncritically celebrating the growing overlap between the market and philanthropy, we seek to highlight that the suggested intersections are rife with ideological frictions, causing both philanthropic professionals and philanthropic givers to continuously re-examine and realign their conceptions of philanthropy (Nicholls, 2010). While past research has explored these transformations from the organizational (Moody, 2008) and the entrepreneurial perspective (Nicholls, 2010), less attention has been paid to the ways in which they are traversed by philanthropic givers and to the respective role of marketing in these processes. In continuation of the recent tradition of ideological studies of marketing and consumer behaviour (Holt and Cameron, 2010; Marion, 2006; Kjeldgaard and Nielsen, 2010; Kozinets, 2008), we address this deficiency by exploring the ideological dynamics taking place at the lively intersection of philanthropy and the market. More specifically, we seek to generate fresh insights into philanthropic giving and marketing by delving into the ideological aspects of philanthropic giving and fundraising at Kiva (kiva.org), a celebrated and controversial exemplar of a ‘marketized’ philanthropic organization. We aim to critically explore Kiva as a celebrated and contested site of philanthropic giving and to trace the core ideological elements that enable the organization and its supporters to make sense of lending through Kiva.

The manuscript begins with a review of the existent studies of ideological frictions surrounding the marketization of philanthropy, followed by a discussion of dominant and utopian ideologies. Next, we present our empirical research by outlining the ideological beliefs surrounding philanthropic giving in the chosen context. In the concluding section, we illustrate how these beliefs coalesce into a coherent philanthropic ideology, discuss its implications for the overarching debate regarding marketized philanthropy, and address the role of marketing and cultural innovation in proselytizing utopian philanthropic ideologies.

Marketization of philanthropy

The loose heading of ‘marketization of philanthropy’ (Nickel and Eikenberry, 2009) subsumes the growing popularity of applying the ‘venture investment’ philosophy to philanthropic grant making (Moody, 2008), entrepreneurial doctrines to running charitable organizations (Nicholls, 2010) and marketing doctrines to ‘engaging’ philanthropic givers/consumers (Wirgau et al., 2010). At the core of these trends resides a utilitarian vision of ‘philanthropic renaissance’ (Reis and Clohesy, 2001) to be fulfilled by applying market principles and entrepreneurial doctrines to social problems. Such ‘visions’ are often aligned with notions of ‘rationalized’ philanthropy aimed at reforming society to permanently eradicate ‘social ills’ as opposed to (merely) alleviating suffering (Gross, 2003). In the anglophone west, in particular, philanthropists of the entrepreneurial bend have been argued to privilege individualistic philanthropy based on calculative utilitarianism and self-dependence over charitable giving based on social or religious obligation (Weber, 1992).

On the other hand, such aspirations have been countered by the defenders of the ‘anti-utilitarian’ conception of philanthropy, who locate the essence of philanthropy in transcending economic calculation and contractual relations (Liebersohn, 2011). For instance, the incursion of ‘market thinking’ (e.g. market competition, the imperative for growth and scaling, quantitative accountability) into philanthropy has been critiqued by Eikenberry (2009) and Edwards (2010), who warn against the inability of marketized philanthropy to generate genuine social transformation and retain the independent democratic essence of philanthropy. Gross (2003) suggests that in its pursuit of efficiency ‘utilitarian’ philanthropy often becomes overly formalized and impersonal. While dismissing one-sided arguments that marketization simply erodes solidarity, Berking (1999) argues that it does tend to encourage self-referential solidarity. When such ‘solidarity of individualism’ prevails, social action is pursued from the perspective of one’s own self-fulfilment, rather than one’s obligation and service to others (Berking, 1999).

Previous studies of the ideological tensions fomenting at the intersection of market and philanthropy have given priority to organizational and entrepreneurial perspectives. In the emerging field of social entrepreneurship – entrepreneurship premised on social mission/missions – Nicholls (2010) examined the competition for institutional control and ideological dominance. He described SE as a fluid, pre-paradigmatic field, strife with attempts of the government, foundations, fellowship organizations and network organizations to legitimize their partial accounts of SE. Analysis of discourses used by these key actors revealed conflicting narratives and institutional logics. Nicholls (2010) found that key SE actors gave priority to narratives of heroic entrepreneurs over narratives of community and to market-driven institutions over third sector/social activism institutions.

Adopting a more dynamic approach, Moody (2008) explored the evolution of venture philanthropy (i.e. the application of the venture investment model to philanthropic grant making) as an emergent organizational field and a professional culture. Similarly to Nicholls, Moody focused on the role of expert opinion leaders who strategically define, legitimate and advocate VP. His analysis showed how the ideology of VP had evolved in response to its abrasive clashes with the dominant non-profit ideology. Initial VP’s critiquing of conventional philanthropy and aggressive utilization of the appeal and legitimacy of business were later superseded by a more conciliatory approach that sought to mitigate the resistance of ‘traditionalists’ and acknowledge the unforeseen difficulties in implementing business principles in the non-profit sector. The realignment of VP involved various strategies of ‘de-radicalization’, such as changing the vocabulary (e.g. avoiding the use of provoking business terminology) and emphasizing continuity (i.e. portraying VP as an extension of older movements for reform).

Although Nicholls (2010) and Moody (2008) offer valuable insights into the ideological tensions and dynamics of marketized philanthropy, they do so from a particular vantage point. They explore discursive manifestations of ideology performed by key institutional actors. Yet, the suggested ideological dynamics is not restricted to (wealthy) entrepreneurs, fundraising professionals and public officials. Wirgau et al. (2010) show that market discourses also mediate the broader public’s engagement with philanthropy. Their analysis of ‘philanthropic consumption’, encouraged by cause-related marketing (CRM) campaigns echoes Eikenberry’s (2009) concerns. The authors show how the market discourse can weaken donors’ engagement with social causes as philanthropic values (e.g. civic engagement and altruism) get eroded by appeals to self-interest and convenience, thus ‘devaluing idealism and activism and privileging consumerism’ (Wirgau et al., 2010: 621). Unfortunately, their analysis is limited solely to CRM-associated consumption and fails to provide a deeper probing into the ways in which market ideologies might impact philanthropic giving.

In sum, a contextualized study of philanthropic ideology can help us move beyond general discussions of marketization of philanthropy and provide a more nuanced understanding of the complex negotiations of market and philanthropic ideologies. First, it can help us move beyond ‘hostile worlds’ interpretations (Zelizer, 2011) that exaggerate the incompatibility of philanthropy and the market. Second, it is essential to recognize that competing philanthropic ideologies are negotiated not only by social entrepreneurs, venture philanthropists and philanthropic professionals, but – just as importantly – also by a diverse assortment of philanthropic givers. Consequently, the manner in which competing ideologies are conveyed to the broader audience, as well as the ways in which donors negotiate and enact these ideologies in their daily discourse and practices, invite exploration.

Dominant and utopian ideology

According to the prevalent scholarly perspective, ideologies systemically distort reality and mask inequitable relations (Marion, 2006; van Dijk, 1998). Conversely, Geertz (1973) claims that ideologies do not merely mask a pre-existing reality, but rather mediate all aspects of the lived and socially produced reality. A similar view is also adopted by Ricoeur, who emphasizes the positive role of ideology in ensuring social integration and the strengthening of social identity (Langdridge, 2006). Ideologies help us make sense of society and structure our social practices. We follow van Dijk’s assertion that ideologies ‘are not primarily about what is true or false, but about how people represent their beliefs about themselves and about the social world’ (1998: 130). Along these lines, ideology is defined as a system of socially shared beliefs, which serve groups and their members to organize and manage their knowledge and opinions about shared goals and values, social relations and social identity. In this sense, philanthropic practices are exceedingly ideological, inasmuch as they regularly inspire a sense of empowerment and identification in philanthropists, who seek to implement their moral visions of ‘good society’ through more or less institutionalized forms of philanthropic giving (Friedman and McGarvie, 2003).

To understand social practices one needs to map the ideologies that mediate social action (Geertz, 1973). Such a map would be in a perpetual flux as dominant beliefs get consistently challenged by utopian ideologies that contest tradition and ‘common sense’. According to Ricoeur, dominant and utopian ideologies form a perpetual circle (or spiral) of simultaneous integration (shared identity and common ‘truths’) and change (critique) (Langdridge, 2006). Every so often dominant ideologies are bound to be transformed, if not replaced by utopian ideologies. While ideologies permanently experience internal friction, it is when dominant ideologies are exposed to more radical challenges that significant cultural innovation can take place (Holt and Cameron, 2010). Such ideological ‘innovation’ unmoors established conceptions and relations, revealing the work that goes into establishing and performing them. As a result, ideological friction can provide a viable starting point to explore the more implicit, taken for granted ideological elements that would otherwise likely escape notice.

The dominant ideologies underpinning western views of philanthropic giving perpetuate the gap between the gift and the market, privileging either of the two ‘spheres’ over the other (Godbout, 1998). For instance, neoliberal utilitarians construe gift giving as an outdated vestige of pre-modern times, a strain on individual’s freedom and an impediment to efficient allocation of resources better achieved by the market (Liebersohn, 2011). Conversely, their anti-utilitarian counterparts approach the gift as an important sociopolitical complement to the market (Caille, 1982). Paradoxically, in their extreme variants, both ‘traditions’ perpetuate the gap between philanthropy and the market by employing anti-economic conceptions of gift giving.² Such binary views end up fertilizing the ground for innovative utopian ideologies that promise to make way for the ‘cross-fertilization’ between the gift and the market. Applied to the context of marketized philanthropy, such utopian ideologies would seek to challenge the dominant ways of organizing and managing opinions, goals, values, relations and identities related to philanthropic giving and market exchange.

Method

We approach the ideological dynamics taking place at the intersection of philanthropy and the market as a valuable site for learning about philanthropic giving and marketing. More specifically, we seek to investigate how philanthropic giving can be imbued by market ideologies, while at the same time retaining (if not enhancing) its philanthropic meaning. Particular interest is paid to how competing market and philanthropic ideologies get recreated and reflected through discourse and practices performed by charities and philanthropic givers. How do charities and donors partake in these, often conflicting, ideologies and put them to use in specific contexts? What role can marketing play in these processes?

Our aim is not to measure the scope of philanthropic marketization or to comprehensively map this undoubtedly multifarious phenomenon but rather to highlight the role of ideology by providing a tentative outline of what and how specific ideologies might be at work. As a result, we opt for a contextualized interpretive study of the ideological dynamics surrounding a particular philanthropic organization. We chose Kiva as the site of our exploration for several reasons. First, Kiva is a quintessential socioentrepreneurial venture both in its origin and mission. Created by Silicon Valley social entrepreneurs Matt Flannery and Jessica Jackley, Kiva was born out of the marriage of philanthropic microlending and techno-entrepreneurialism. Kiva aims to encourage Internet users to lend (without interest) small amounts of money (starting from $25) to impoverished entrepreneurs, whose stories are posted on Kiva.org. Kiva’s mission to alleviate poverty rests upon soliciting loans (as opposed to non-contractual unilateral donations) earmarked for individual impoverished entrepreneurs. The fieldwork necessary to facilitate the loans (e.g. attract and filter potential borrowers, transfer funds to borrowers, collect repayments) is conducted by local microfinance institutions (MFIs). The MFIs, who can operate on either a for-profit or non-profit basis, charge borrowers with interests to cover their expenses and (when applicable) earn their profit.

Second, Kiva has persistently been marketed as being distinct from ‘traditional charity’. As detailed below, Kiva’s distinctiveness has been suggested to derive from its ability to implement market principles to poverty alleviation and management of philanthropic organizations. Third, the chosen organization is surrounded by a potent mix of admiration and resistance. While Kiva’s distinctiveness has received wide acclaim (Bishop and Green, 2008), the organization has also been criticized for its over-imaginative marketing (Roodman, 2009). Finally, while Kiva can be seen as parasitically feeding of the trend of marketized philanthropy, it can also be approached as a brand seeking to extend the ideologies underpinning marketized philanthropy to a broader audience (i.e. solicitation of gifts from a broad pool of internet users). In other words, Kiva provides a setting where the debate regarding ‘marketized philanthropy’ is extended beyond narrow ‘elite’ groups (e.g. social entrepreneurs and philanthrocapitalists) to a broader audience of philanthropic givers.

We explore the ideological turmoil surrounding Kiva by combining the analysis of user narratives with the analysis of Kiva’s brand’s genealogy (Holt, 2004). User narratives pertaining to Kiva were collected on KivaFriends.org (KF), a web forum set up by the community of avid Kiva lenders. At the time of our analysis, the KF community comprised more than 6000 members,³ who have posted more than 80,000 posts on KF in the forum’s 4-year history. In light of the overabundance of data, we have started our study by analyzing KF’s thread devoted to users’ introductions of themselves and their views of Kiva. The thread consisted of 945 user posts (roughly 230 pages of text), which were archived and analyzed in full. Subsequently, our analysis has branched out to related KF threads that discuss the distinctive nature of Kiva and its users’ response to Kiva’s innovative approach to philanthropic giving. When possible, user narrations were matched with the user profiles published on Kiva.org, in order to gain insights into users’ actual activity on Kiva.

In addition to surveying user narratives and profiles, we conducted a brand genealogy study (Holt, 2004) by analyzing a set of Kiva-related texts published by its founders, commentators and the media throughout Kiva’s 6-year history. In contrast to Holt’s approach, less emphasis has been put on advertising (less used by Kiva) and more on the opulent media reports of Kiva’s rise to success and on the founder’s narrations of Kiva’s inception and evolution, conveyed in mass media, trade journals and via influential conferences (e.g. TED and Skoll World Forum). Combined, these narrations not only report various ‘facts’ on Kiva but also invoke various ideological elements of Kiva’s challenge to the conventional way of ‘doing charity’.

The user narratives and the remaining texts were analyzed through an iterative process of grounded interpretation, which involves testing and refining emerging interpretations until they stand the weight of the data (Muniz and Schau, 2007). We present our findings by outlining a consistent set of ideological elements traced across the multiple sets of our data. We also consider the dynamic interactions between the proposed ideological elements (Kozinets, 2008) and the ways in which these elements form into a unified utopian ideology that challenges the dominant conceptions of charity and poverty alleviation.

Findings

As suggested earlier, marketization of philanthropy is not restricted to affluent philanthrocapitalists and philanthropy professionals. While Kiva can be seen as a parasitical philanthropic brand feeding of the marketization trend, it can also be approached as a ‘proselytizer brand’ (Holt and Cameron, 2010) seeking to extend marketized philanthropy to a broader audience. In the sections that follow, we outline the core ideological beliefs encountered in our survey materials. Although our presentation is divided into three parts, we wish to emphasize that the conceptions tackled in each do not present self-standing mental representations circulating among Kiva’s creators and supporters, but rather form an intertwined web of ideological beliefs. We begin with an overview of the more general beliefs underpinning Kiva’s claims of uniqueness. Later, we move to more specific beliefs underpinning Kiva’s conception/reconception of philanthropic beneficiaries and benefactors. The predominately emic account of beliefs offered here is superseded by a Discussion section devoted to a more etic treatment of the encountered ideology.

Kiva’s alternative to ‘charity’

Lending through Kiva departs from the conventional conception of philanthropic giving as a transfer of funds devoid of proscribed financial return. Technically speaking, in the case of lending through Kiva, only the opportunity cost of lending without interests and the incurred risk of default can be considered as being uncompensated for.⁴ These differences notwithstanding, the organization and its supporters regularly construe lending through Kiva as philanthropic giving. Nevertheless, lending through Kiva is rarely perceived as ‘charity as usual’.

In her passionate presentation at a TED conference held in 2010, Kiva’s founder Jessica Jackley recounts her disheartening experience with what she calls ‘traditional charity’:

I learned about this new method of change in the world [micro lending] that for once showed me a way to interact with someone and to give, to share of a resource in a way that wasn’t weird and didn’t make me feel bad… It’s about retelling the story of the poor and it’s about giving ourselves and opportunity to engage that validates their [the recipients’] dignity, validates a partnership relationship, not a relationship that’s based on… [pauses] you know, the traditional donor-beneficiary weirdness that can happen [laughs], but instead a relationship that is based on respect and hope.

Jackley starts her talk by recalling the pain, frustration and fear, caused by the ‘traditional’ way of approaching poverty and charity. ‘Traditional charity’ is suggested to focus on the suffering, helplessness and hopelessness of the poor, thus provoking feelings of despair, guilt and shame. Conversely, microlending and (by extension) Kiva are presented as an effective, hope-inspiring, egalitarian opportunity for ordinary individuals to actively and effectively participate in poverty alleviation.

The proposed critique and departure from ‘traditional charity’ play a similarly crucial role in Matt Flannery’s (Kiva’s co-founder and Jackley’s partner) narrations:

We often divide our financial world into two categories—charity and business. Most of us in developed countries grew up thinking about the poor in the developing world as potential targets for charity. We related to them, both passively and actively, as benefactors. Many of the recipients of such aid internalized the message. In my experience, recipients resent benefactors even as they consume the aid.

Similar to Jackley, Flannery views conventional charity as an act of domination. Later on, he explicitly compares it to colonialism inasmuch as both colonialism and traditional charity propagate the helplessness and benefactor-dependence of the poor. Flannery argues that, in opposition to ‘charity’, loans ‘turn a charitable relationship into a business relationship’ and hence ‘empower the poor by making them business partners’. The poor no longer merely ‘consume the aid’, but rather invest it into their personal and community progress.

The founder’s views of Kiva’s distinction from conventional charity are opulently shared not only in numerous media reports celebrating Kiva’s innovativeness (e.g. CNN, BBC, Time, The New York Times, the Wall street Journal and the DailyKos, Slate), but just as importantly by Kiva’s devoted users:

I am a big fan of anything commonsense and when I heard of Kiva I too felt a big YES. Here is commonsense at its best. No handout that disappears into the ether. No patronizing charity. My money helps this person, comes back and goes back out to help the next one. Most importantly, it maintains the dignity of those who take out the loans. They get to feel a part of the world and contributors to their communities. They can hold their heads up in society because they are not dependant. One day they will be the ones loaning out money. We can hope. (Qwiksilver, female, USA)

Like the majority of ‘Kiva Friends’, Qwiksilver perceives lending through Kiva as being superior to conventional charity. While conventional charity is described as a ‘patronizing handout’, lending is argued to ‘maintain the dignity’ of recipients as proud ‘contributors to their communities’. Accordingly, micro-loans are presented as a dignified ‘commonsensical’ answer to poverty. Coinciding with Jackley’s and Flannery’s celebration of the power and moral superiority of philanthropic microlending, the passage ends with pronounced optimism and hope.

Kiva’s ‘working poor’

Kiva states its mission as ‘empowering people around the world with a $25 loan’. Its website refers to the pertinent borrowers as the ‘working poor’. Although a precise definition of ‘the working poor’ is not provided, the meaning can be extrapolated from various Kiva texts. Flannery’s published biography of Kiva, for example, describes the (working) poor as a testament to ‘a universal work ethic’ and the invaluable contribution of entrepreneurship to progress. Jackley provides an even more nuanced description by appealing to donors’ imagination:

Imagine how you feel when you see someone on the street who is begging, and you are about to approach them. Imagine how you feel. And then imagine the difference when you see somebody, who has a story of entrepreneurship and hard work, who wants to tell you about their business [pauses] about what they’ve done. Imagine if you are speaking to somebody who is growing things and making them flourish, somebody who is using their talents to do something productive, somebody who has built their own business from scratch, someone who is surrounded by abundance not scarcity, who is in fact creating abundance, somebody with full hands, with something to offer not empty hands asking for you to give them something.

Jackley passionately advances the metaphor of replacing the outstretched, empty hand of the helpless beggar with the ‘full hands’ of hard-working entrepreneurs, who have ‘something to offer’. While ‘traditional charity’ is suggested to rely on a negative and degrading portrayal of the poor, Kiva allegedly promotes ‘a positive view’ of the poor. Accordingly, both Flannery and Jackley present the working poor as worthy individuals endowed with a winning combination of moral qualities (i.e. hard-working providers) and entrepreneurial prowess (i.e. bearers of success and progress).

Kiva’s mythology of the working poor thus helps to resolve the frustrating pessimism and ineffectiveness of traditional charity. Our surveying of KF shows that while users seldom join Kiva in explicitly critiquing conventional conceptions of the poor, they readily partake in Kiva’s ‘positive’ conception of the poor and the obligations that arise from it:

Two years ago I traipsed through Kenya and Tanzania and I saw something that shattered the images the media always show us to portray the region (violence and passive helplessness): really hard-working people limited only by their means. I want to help. Not out of guilt or a sense of North-South fairness, but just because I hate to see human potential go to waste.’ (Louis-Eric, male, Canada)

I have been a business owner and entrepreneur for many years and firmly believe in the talent and optimism of the individual … I am anxious to see the results of my lending and look forward to passing the word and changing the world – one person at a time! (Shirley, female, Canada)

I believe one’s appetite for work should be the only barrier to success and consider it a privilege to put some of my capital out there to make a difference for a few enterprising people. (StevePPS, male, USA)

As evidenced by these quotes, all three KivaFriend members share Kiva’s celebratory visions of the ‘enterprising poor’ as hard-working, talented individuals with considerable potential. Users like Shirley and StevePPS identify with the borrowers’ entrepreneurial qualities and experience the loan as an affirmation of their personal moral beliefs (e.g. ‘the talent and optimism of the individual’ or ‘one’s appetite for work’ as ‘the only barrier to success’). The celebratory portrayal of the working poor not only inspires hope but also reaffirms the worthiness of the ‘recipients’. In Louis-Eric’s words, failing to assist the working poor can be experienced as letting ‘human potential go to waste’.

Kiva’s ‘philanthropic investors’

Kiva’s ‘Product philosophy’ states that philanthropic lenders primarily seek connections with borrowers. To paraphrase Kiva’s founders, lending represents a great ‘connectivity tool’ that ‘creates an ongoing communication between two individuals that is more binding than a donation’. Put differently, Kiva’s lenders are not only entitled to financial return (i.e. zero-interest loan repayments) but also to ongoing information (e.g. borrower profiles and loan descriptions, MFI profiles and loan updates), which allegedly enables them to simultaneously make wise investment choices and to more meaningfully connect to borrowers.

The interplay of philanthropic sentiment and entrepreneurial pragmatism represents a common theme in Kiva and user narratives. For example, Flannery repeatedly stresses the sustainability and information-richness of micro-loan philanthropy. He argues that when you receive repayment from an entrepreneur in the developing world, ‘you learn something: you can have a transformational impact in this world by relating to others as a business partner’. His views are commonly shared by users:

While I am a frequent and chronic donor to various charities (from rainforest relief to panhandlers) the microlending approach is the first real way I've seen to leverage my limited resources and be able to use them to help people over and over again. And with repayment, I can get direct feedback on whether the process is working or whether my funds are just being swallowed up. (Michael)

It is probably the ability to choose who you want to lend to that I enjoy the most. The best I can compare it to is when Oprah built that school in South Africa, I believe. She essentially said she was tired of giving money to charities who put it in a pile… and decided to do something herself. Kiva hits that spot on a smaller scale. I love it. (Samantha, female, USA)

Rather than having their money ‘swallowed up’ by charities that ‘put it into a pile’, users like Samantha and Michael experience their lending as philanthropic giving with increased autonomy and control over their ‘funds’. Michael praises Kiva’s for enabling lenders like himself to effectively ‘leverage their limited resources’. The ability to choose whom to borrow to, and to retain the control over the funds, enables users to construe their philanthropic loans as small-scale VP. Samantha’s words, in particular, closely echo Jackley’s vision of Kiva ‘allowing the average individual to feel like a mini-Bill Gates by building a portfolio of investments in businesses around the globe’ (Aaker et al., 2010). Furthermore, users like Michael share Flannery’s interpretation of each loan repayment as proof of successful poverty alleviation.

Although used carefully so as not to confound or inconvenience its users, financial terminology features prominently on Kiva.org. For example, the subpage that displays the personal history of lender’s activity on Kiva is titled ‘My Portfolio’. As is common in ‘venture philanthropy’ circles, lenders are offered varied financial statistics, ranging from delinquency-, default- and currency-exchange–loss rates to portfolio distribution statistics (by borrower gender, country, sector and MFI partner). Visuals and stories of specific borrowers are always complemented with financial details about the loan. Kiva also develops innovative investor tools, such as the ‘risk rating system’, which categorizes field partners (MFIs) on a spectrum of one to five stars.

However, that is not to suggest that Kiva promotes a radically economic reading of philanthropy or that all users experience lending through Kiva as a business investment. Some users confess of being completely unaware of Kiva’s ‘lending concept’ prior to receiving their first loan repayments. More importantly, users who do appreciate Kiva as a site for philanthropic investment, effortlessly combine the personal and economic aspects of microlending:

I think the idea of microlending has the potential to be world-changing. Kudos to Kiva for finding a way to make the connections much more personal and to allow us to build up our own little pools of capital that can be reused again and again. (Tomgray, male, USA)

Like many, I was hooked in by the ability to directly help an individual of my choosing. Bonus points for a good chance that everything lended [sic] out would come back, which I could then use to lend back out to someone else. Brilliant! I was sold on that alone. But wait, there are also journal updates and reports from people that you help out?! "Good Lord this is the best charity tool ever!’ (Joe, male, USA)

Tomgray’s condensed description highlights the dual role of lending as a facilitator of personal connections and an effective social investment. Rather than opposing economic thinking (managing one’s ‘pools of capital’) to social engagement (‘connecting’) and intimacy (‘much more personally’), he merges the two perspectives into an appealing version of philanthropy, which will simultaneously change the world and bring people together. A similarly positive view is espoused by Joe, who praises Kiva’s ability to directly connect lender to borrowers. In accord with Flannery’s earlier claims, the loan contract is seen to simultaneously ensure efficacy (i.e. the money ‘comes back’ and can be relent perpetually; it is multiplied/leveraged) and meaningful lender–borrower relationships (i.e. the loans are ‘direct’ and ‘personal’).

Discussion

We have set out to critically explore the ideological dynamics surrounding Kiva as a case study of the ideological aspects of marketized philanthropy. The preceding section provided an emic account of the ideological beliefs conveyed by Kiva and negotiated by its users. In this concluding part, we focus on how these beliefs coalesce into a coherent philanthropic ideology. We discuss its relationship to conventional philanthropy and expose several worrisome facets of this utopian ideology. We conclude by discussing the role of cultural innovation and marketing in proselytizing utopian philanthropic ideologies.

Kiva’s ‘ideology of entrepreneurial philanthropy’

As proposed by Grim (1998: 27), ‘philanthropy is constantly ideologically reinvented, performed and contested’. The ideological beliefs encountered in the context of Kiva represent a marked example of such reinvention. They form a pervasive utopian ideology, herein termed the ideology of entrepreneurial philanthropy (IEP), which transforms the ways in which people imagine poverty, progress and philanthropy. IEP is a utopian ideology inasmuch as it both explicitly and implicitly challenges dominant conceptions of philanthropy and poverty alleviation (see Table 1). As proposed by one of its founders, Kiva aims to ‘retell’ poverty by replacing the conventional imagery of the helpless poor with celebratory visions of ‘the ‘working poor’ waiting to be unleashed by loans. In addition to propagating alternative conceptions of beneficiaries of charity, the entrepreneurial ideology also challenges conventional conceptions of philanthropic giving and giver. Specifically, IEP promotes a flattering representation of Kiva’s lenders as engaged investors and propagates the lender–borrower relationship as an egalitarian partnership premised on dignified ‘hand ups’ (as opposed to handouts) to the entrepreneurial poor. These utopian conceptions legitimize lending through Kiva as a morally and pragmatically superior alternative to conventional charitable giving.

Table 1.

The outline of emic beliefs comprising Kiva’s utopian ideology of entrepreneurial philanthropy.

Core ideological conceptions	Ideological beliefs regarding ‘Kiva-type’ philanthropy	Ideological beliefs regarding ‘traditional philanthropy’
Conception of poverty	Optimistic – Focus on untapped entrepreneurial potential	Pessimistic – Focus on pain and desperation
Conception of beneficiaries (Bfic)	Working poor, proud ‘bonsai’ entrepreneurs	Helpless, dependent poor
Conception of benefactors (Bfac)	‘Philanthropic investors’, engaged agents of change	Naive, detached, powerless donors
Conception of philanthropic relation between Bfic and Bfac	Egalitarian, binding partnership	Unsustainable patronage, intermittent, superficial
Conception of philanthropic giving	Dignified ‘hand up’, social investment	Degrading ‘handout’, aimless charity

IEP can be described as a marketized ideology due to its profound reliance on entrepreneurial values and beliefs (e.g. Kiva’s ‘working poor’, the ‘venture philanthropy’ approach). More importantly, contractual (economic) arrangements (i.e. loans) play a pivotal ideological role in constructing meaningful philanthropic giving and receiving. Despite its seemingly pragmatic appeal to accountability and transparency, Kiva remains an exceedingly ideological site. The ‘alternative’ conceptions of philanthropy, poverty and social progress promoted by IEP prove relatively narrow and partial when scrutinized closely. For instance, Kiva’s ‘positive’ view of poverty turns a blind eye to the poor who fail to qualify as the worthy ‘working poor’ and Kiva’s celebration of microlending (at times explicitly) relies on devaluing unilateral philanthropic giving as patronizing and ineffective and receiving help without repayment as shameful.

Kiva as a site of benevolent deception

IEP entails several elements that could be taken as utopian in the narrower sense of utopia as a ‘distortion of reality’ (van Dijk, 1998). Kiva’s ideological retelling of poverty and philanthropy exhibits several distortive tendencies as highlighted by the critics of microfinance-based development initiatives. These initiatives have been critiqued for harbouring unrealistic expectations by overestimating the role of micro-loans, entrepreneurial individuals and microeconomic activity in bringing about social progress (Bateman, 2010). True to Kiva’s slogan ‘Loans that change lives’, a positive impact of Kiva loans on borrowers’ lives and communities is assumed to be all but inevitable.⁵ Such utopian assumptions starkly contradict the recent research and experiences with microfinance in poor countries (e.g. the Andhra Pradesh crisis). As proposed by Dichter and Harper (2007), Bateman (2010), Mader (2011) and many others, microfinance is hardly a panacea to world poverty and can easily prove to be of limited advantage or even harmful to the poor. Kiva’s case thus confirms Edwards (2010) assertion that marketized philanthropy tends to narrow the discussion of what social progress is, and how it could be achieved, thus curtailing its ability to provoke comprehensive social transformation (Edwards, 2010).

What is more, Kiva’s claims regarding the inherent connectivity of loans that bind specific lenders and borrowers have also been revealed as more imaginative than real. As revealed by Roodman (2009), Kiva does not actually facilitate direct person-to-person lending. In reality, Kiva loses control over the funds once they are transferred to local MFIs and MFIs regularly fund entrepreneurs prior to featuring them on Kiva.org. Although Kiva has promptly amended its website in response to these charges, the ‘illusion’ of direct person-to-person connectivity and lenders’ total control over the use of their funds remains central to Kiva’s proposition as well as to the users’ construal of lending through Kiva. In addition, while studies commonly find that the poor often repay their micro-loans by forfeiting their remaining possessions or by simply taking on new MF loans (Bateman, 2010), and while MFIs have both the opportunity and an active interest in artificially keeping the repayment rates high, loan repayment continues to be offered and accepted as the ultimate proof of successful alleviation of poverty. In this sense, we can second Eikenberry’s (2009) claims that Kiva’s marketized philanthropy tends to uncritically, and at times even deceptively, package and promote its preferred ‘cures’ to social ills.

Nevertheless, it would be wrong to argue that Kiva’s entrepreneurial ideology seeks to simply eradicate conventional philanthropy, or that (by extension) marketized philanthropy simply does away with conventional philanthropic beliefs and values. At least in Kiva’s case, there is little evidence of diminished philanthropic engagement of givers, or of eroded relationships between benefactors and beneficiaries found in studies of consumptive philanthropy (Wirgau et al., 2010). Quite the contrary, we found Kiva to inspire passionate philanthropic engagement among seasoned philanthropists, novice givers and those who might have otherwise given up on (conventional) charity. Although by privileging individualistic, utilitarian giving over unconditional communal obligation to needy others, IEP arguably fails to live up to traditional philanthropic ideals of inclusiveness and non-instrumental giving (Bajde, 2009), it nevertheless helps philanthropic givers to identify with distant others by recognizing in themselves and the ‘working poor’ a set of shared entrepreneurial qualities, interests and ambitions that inspire hope and action towards a better future. It also enables philanthropic givers to meaningfully relate (virtual and illusory as this relation might be) to distant others in a more prolonged manner – beyond the conventional monetary donation (i.e. at least for the duration of the loan).

Kiva as a site of cultural marketing innovation

We propose that IEP rejects the ‘hostile world’ reading (Zelizer, 2011) of the market and philanthropy as two incommensurable spheres of life. Instead it functions as a hybrid ideology, which realigns philanthropic beliefs and values with selective market/entrepreneurial ideological elements. The philanthropic practices encouraged by Kiva (e.g. lending and repaying) are legitimized by drawing upon the clout of market instruments and values. To paraphrase Moody (2008), while IEP borrows from market-oriented ‘cultures’ (i.e. entrepreneurship and venture capitalism) to critique conventional philanthropy, it is essentially a hybrid of both. On the one hand, IEP retains the philanthropic appreciation of benevolently relating to distant others. On the other hand, it turns to market mechanism, instruments and values to resolve the alleged failings of conventional philanthropy. These elements are employed both practically and ideologically to conduct and legitimize an alternative approach to charitable fundraising and giving.

We see a vital contribution of our study in demonstrating that Kiva represents not only a viable extension of microfinance to philanthropy but more fundamentally, a ‘cultural innovation’ (Holt and Cameron, 2010). From a marketing perspective, Kiva does not merely parasitically attach itself to a trendy ideology, embellishing its services with entrepreneurial lustre. It serves as a ‘proselytizer’ (Holt, 2004) of market ideology by productively embedding market mechanism, instruments and values into philanthropic practices and relations. The case of Kiva thus highlights the crucial role of ideological innovation in philanthropic marketing. Following Holt and Cameron (2010), Kiva’s success can be attributed to the brand’s seizing of an ideological opportunity arising from the growing resistance to conventional philanthropy and the steady appeal of SE and VP. The Kiva brand has been imbued with an ideology that brings together and innovatively applies utopian beliefs to a novel context (i.e. philanthropic micro-loans). While Kiva’s ideology and its entrepreneurial approach to philanthropic giving and the values associated with it (e.g. individual choice and control, self-dependence) are hardly new, there is considerable innovation in the way in which these ideological elements are woven together and ‘marketed’ to a broad audience of philanthropic givers.

Ironically, despite Flannery’s contention that its unique information-rich model enables Kiva ‘to go beyond marketing’, Kiva’s IEP can be taken as marketing par excellence. By bringing the market to philanthropy and philanthropy to the market, Kiva performs a remarkable marketing innovation. The neoliberal veil of unfettered pragmatism and radical transparency obscures an ideological torrent transforming the way we think about poverty and philanthropic giving. While in the past, entrepreneurial philanthropy was largely restricted to the western entrepreneurial elite (Friedman and McGarvie, 2003), Kiva succeeds in providing a more broadly palatable ideology, which imbues a mass-philanthropy brand with the reputation of a highly efficient, radically transparent philanthropic tool that uniquely empowers both givers and recipients of charity. To rephrase Jackley, Kiva’s ability to command attention and successfully compete with conventional charities is inextricably tied to ‘the stories it tells’ not only of specific people and their loans but – more importantly – about the fundamental questions of how poverty, philanthropy and progress should be imagined and pursued.

Kiva invites philanthropic givers not only to passively consume or conform to the IEP but to productively perform entrepreneurial beliefs and values through a range of philanthropic practices. While lender practices, such as the processing of loan information, making multiple investment decisions and the ongoing management of available ‘Kiva credits’, are rendered meaningful through IEP, they are also elemental to IEP’s perpetuation. As argued by Zwick et al. (2008), Cova and Dalli (2009) and others, ideological innovation and effective diffusion of utopian ideologies are vital for consumers to adopt the necessary ‘productive’ roles. In no small part, Kiva’s success in popularizing the IEP and engaging its massive user-base in philanthropic ‘investment’ is owed to Kiva’s ability to harness the emergent information and communication technologies (Watson, 2009).

The so called Web 2.0 technologies in particular have played a crucial role in allowing Kiva to set up its virtual ‘mass-market’ for philanthropic investment and to facilitate meaningful philanthropic giving through exchange of ideological beliefs, images and information. Without these technologies, it would be untenable to coordinate and bring together such a broad pool of borrowers, MFIs and lenders. For instance, it is Web technologies that reduce the barriers and costs of communication and transaction so that local MFIs can viably pitch prospective micro-loan investments to persons across the globe and individual lenders can independently participate in $25 micro-loans with relative ease. The Web also played a crucial role in enabling lenders to gather around a common cause, both in less conspicuous ways (e.g. the lenders’ individual contributions towards a specific loan are automatically pooled together to cover the full amount of the loan) and in more active engaged ways (e.g. creating and sustaining a community such a KivaFriends, participating in lending teams and inviting others to join the cause).

The Internet has also played an important role in disseminating Kiva and IEP beyond the borders of California and the United States. Yet, despite its progressive internationalization and subsequent global reach (e.g. Kiva boasts of bringing together lenders of over 200 nationalities with the poor of more than 60 different nationalities), the western anglophone cultural background remains dominant among Kiva supporters and the KivaFriends members studied here. Since philanthropic practices and philanthropic ideologies are always influenced and structured by the specificities of particular cultures (Ilchman et al., 1998), there is every reason to believe that the ideological elements and processes we outline above are far from universal. On the one hand, the entrepreneurial approaches to philanthropy are generally associated with the anglophone-western setting (the United States in particular) (Bishop and Green, 2008), and the literature suggests that this cultural setting provides a fertile ground for individualistic, utilitarian ideologies of philanthropy (Gross, 2003; Liebersohn, 2011). On the other hand, philanthropic doctrines practiced by the richer and the more powerful nations spread fast and exert considerable global influence (Ilchman et al., 1998).

Our data shows that Kiva and its IEP can resonate with philanthropists of diverse cultural backgrounds. Unfortunately, the relatively high homogeneity of the studied community prohibits us from exploring the precise role of cultural background and potential patterns of cultural variation in appropriation of Kiva’s model of philanthropic giving and IEP. These limitations notwithstanding, we can argue that IEP gravitates towards an anglophone-western view of the relationship between philanthropy and the market, while at the same time exhibiting a translocalness indicative of the tenacious and effective spread of philanthrocapitalism. We urge future research to consider these and other ways in which ideologies of philanthropy (both locally and globally) transform and are transformed by philanthropic practices in the process of innovatively aligning/realigning economic and social facets of giving, sharing and exchanging with the poor.

Footnotes

Notes

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