Real P2P vs. Virtual P2P

November 22, 2009

The demand for direct connection is baffling to me since most donors absolutely refuse direct connection to the people in need that are closest to them. Consider: how often do you or your friends take advantage of the opportunity to give directly and establish a connection by giving $20 to the guy standing at the corner with the cardboard sign saying, “Will Work for Food”?

I’ll bet the answer is “never.“ And there’s a very good reason for that. You believe that to actually help that person you should give the money to a knowledgeable intermediary like a homeless shelter that will do the research to understand this person’s situation, and ensure the money you give is actually used in a responsible way.

So if you would only give to an intermediary in order to help someone on the street outside your home, why do you want to do away with intermediaries between you and a person on the other side of the world whose circumstances you don’t understand at all?

That’s Tim Ogden on Kiva: The Play.

So I guess I like feeling connected enough to know the recipient’s story (and incorporate it into my story about my life), but not so connected as to feel uncomfortable with my own wealth.

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1. Openworld Says:
   November 22nd, 2009 at 11:23 am

   Two other reasons to prefer the virtual P2P with an overseas beneficiary -

   1) A small amount of funds can do a lot more if the recipient is in an impoverished region

   2) the recipient of a digital donation has an online reputation at stake — and therefore is more likely to act in virtuous ways to remain in globally-visible good standing with virtual givers. Uploaded photos taken by cell phone cameras offer a way for the recipients of virtual help to document their progress.

   Mark Frazier
   Openworld, Inc.
   “Awakening assets for good”
   @openworld (twitter)

2. Michael Says:
   November 24th, 2009 at 1:49 pm

   I don’t think that analogy holds, because the homeless shelter is still local, and spends it resources in ways you can quickly check (are the doors open, is there food being handed out, etc.) as you happen to pass, i.e. the homeless shelter donation is also “direct”. Giving internationally, you have to vet the organization because you don’t know that your donation will ever be delivered.

   Checking non-profits in the US isn’t all that hard (they submit 990s to the IRS, which are aggregated on sites like guidestar.org. But here again, we are trusting an intermediary to tell us something about an organization that we can’t easily find out.

   We like direct contact because we want to know that our money is being used, even if inefficiently, and not blatantly embezzeled. Very, very few organziations can’t be trusted, but that is the nature of asymmetric information isn’t it–it casts a pall on entire markets.

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