Why can’t individuals being helped with “microloans” get them from another source?
How is ProPhilanthropy different from microfinance groups such as Kiva and others providing loans?
How much of my contribution will actually be used to support projects and beneficiaries in need?
Is my contribution tax deductible?
How can I join the ProPhilanthropy Fund and how will my contribution be applied?
How are individual beneficiaries selected and can I follow and participate in that process?
How is ProPhilanthropy different from organizations and causes providing charitable and other aid?
A “Hand Up” Versus a Handout: ProPhilanthropy is designed to help people help themselves
Unlike most charitable causes and other forms of aid, ProPhilanthropy is not about a handout – it’s about giving people a hand up. ProPhilanthropy supports individuals in building or growing a small business that can help themselves and their families, or in obtaining the necessary vocational training or other resources needed to put them on the path to a better future.
By empowering individuals, ProPhilanthropy helps to promote sustainable changes
Rather than simply providing aid, which can leave individuals dependent on continuing support, ProPhilanthropy provides microfinance and other support that empowers people. By helping people enhance their lives and prospects for income of their own, ProPhilanthropy promotes changes that are proactive and sustainable for individuals and their families. ProPhilanthropy does this in collaboration with partners offering small microfinance loans or “microloans” that are made available to individuals meeting key criteria including need, potential impact and likelihood of repayment.
Why can’t individuals being helped with “microloans” get them from another source?
In much of the world, access to bank loans and other financial services is a privilege enjoyed only by the wealthy, who are not only readily able to visit established banks but are deemed of high value for client relationships. Conversely, individuals struggling to build income through business activities of their own often have more acute needs for credit (in order to purchase necessary equipment, supplies, etc.) – and yet traditional bank loans are typically unavailable to them because the very assets they’re seeking to acquire (e.g. equipment, inventory) are often needed as prerequisites (i.e. collateral for the loan they need). In addition, while their needs are quite small – and may be secured by other means such as co-signing, group lending or guarantees – traditional banks have transaction costs, profit structures and other attributes that make them less interested in providing and servicing very small loans.
CARE International was a pioneer in establishing small financial organizations called Village Savings and Loans (VSLs), and Grameen and others have since pioneered the development of microfinance as an effective and viable way to allow underserved communities to take advantage of basic financial services. In particular, credit, savings and insurance are critical to allow people to transform their lives from one of precariously struggling for daily survival to being able to build sources of modest income and security for themselves and their families. Today, LendWithCare (an affiliate of CARE International and The Co-operative (UK) and other organizations we partner with are continuing to support the availability of microfinance needed to allow people to help themselves.
How is ProPhilanthropy different from microfinance groups such as Kiva and others providing loans?
Compared to providing microcredit loans on Kiva® or other sites, ProPhilanthropy combines long-term recurring benefits with near-term tax deductibility
ProPhilanthropy’s contributors benefit from seeing both near-term and continuing impact of a gift that keeps on giving, while also being able to take advantage of an immediate tax deduction for 100% of their contribution.
As noted by Kiva and other microlending intermediaries, loans made through their sites are not considered tax deductible. ProPhilanthropy partners selectively with projects mediated by LendWithCare (an affiliate of CARE International) and other microfinance organizations in the U.S. and globally, choosing entrepreneurs likely to have transformative impact, along with microfinance support that helps beneficiaries by charging interest rates that are relatively low and affordable as compared to prevailing rates in their locations.
ProPhilanthropy also actively and continuously reinvests, so that as each loan is repaid, the principal is made available for additional entrepreneurs, thereby ensuring that each contribution is repeatedly and continuously recycled to benefit an increasing number of individuals, families and communities.
How much of my contribution will actually be used to support projects and beneficiaries in need?
Many donors are concerned that substantial portions of their contributions intended for beneficiaries in need are spent on overhead and other expenses (including salaries, rent and other operational expenses of the nonprofit, as well as marketing, fundraising and other items). The BBB® Wise Giving Alliance (a nationwide initiative of the Better Business Bureau®) encourages nonprofits to devote at least 65% of their revenue to program activities and to spend less than 35% on fundraising.
Far exceeding those levels, as an all-volunteer organization – and with operational expenses covered by founders – Advancing Compassion Project’s ProPhilanthropyinitiative provides an effective throughput of 100% of contributed dollars.
Is my contribution tax deductible?
Yes – unlike most lending portals, all contributions to the ProPhilanthropy Fund are are considered tax-deductible contributions to a 501(c)(3) public benefit organization (Advancing Compassion Project, U.S. Federal ID No. #45-3462507). So every contribution results in long-term impact to programs helping individuals improve their and their families’ lives, as well as an immediate tax deduction for donors. And since theProPhilanthropy Fund will be reinvesting each contribution in the form of recurring loans over many years, the positive impact will continue forward.
How can I join the ProPhilanthropy Fund and how will my contribution be applied?
The ProPhilanthropy Fund is currently accepting contributions. Since the founders of ProPhilanthropy are also covering all operational and other expenses, 100% of any donation will then be directly applied to programs supporting individuals and families in need. In addition, since ProPhilanthropy is working with partner organizations providing repayment rates of around 98% and higher, all contributions to the ProPhilanthropy Fund will be reinvested on a recurring basis of at least 5 years.
Illustrating the power of leveraging and recurring investment by ProPhilanthropy, a single $100 contribution can thus provide all of the following:
(1) An immediate tax-deductible donation for the amount of the original contribution, i.e. $100
(2) A source of $500 in loans helping individuals start or build a business or complete their educational or vocational training (based on a recurring investment over 5 annual loans); and
(3) An eventual grant of $100 to an organization or group helping the underserved (enabling additional individuals and groups to secure funding and/or otherwise promote sustainable impact).
How are individual beneficiaries selected and can I follow and participate in that process?
The ProPhilanthropy Fund works with a number of organizations to identify potential beneficiaries and projects suggesting that the loan can have a transformative impact in their and their families’ lives. Exemplary projects and individuals selected for funding are regularly posted on the Fund’s website, along with information about each project at http://www.prophilanthropy.org/.
ProPhilanthropy℠ is an initiative of Advancing Compassion Project (ACP), an all-volunteer based public benefit corporation, which is recognized as a tax-exempt 501(c)(3) organization by the U.S. Department of the Treasury (#45-3462507), and a “Valued Partner” by Guidestar®, the leading evaluator of nonprofit organizations in the United States. For more information about Advancing Compassion Project, please visit http://www.helplovegrow.org/.
