Foreign Aid

Cows, Copy, and Cash

Citizen journalism meets microfinance

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What do a Kenyan woman who wants to become a dairy farmer and a journalist interested in reporting on unprocessed rape kits in Los Angeles have in common? Until recently, both would have had trouble getting their hands on some startup cash. Microlenders like Kiva.org have dramatically changed the way small scale enterprises get off the ground in poor countries like Kenya. A similar model holds promise for funding the kind of local coverage and investigative reporting previously provided by the decaying newspaper industry—but new proposals for massive federal interference in the journalism industry threaten to undermine bottom-up solutions.

Kiva was started in 2005 by a couple inspired by the work of Grameen Bank founder and Nobel Prize winner Muhammad Yunus. Here's how it works: Organizations on the ground in, say, Kenya help a woman in need of a cow put a proposal online, and the San Francisco-based site lets would-be investors club together to fund her venture. When enough donors contribute to add up to her requested loan, she gets the cash and picks out a nice Bessie. She eventually pays back the loan with interest, and the donor can either sink that money back into another investment on the site, or extract his money and use it to buy another part of another cow—in the form of a steak dinner, say. Kiva is a non-profit, but other players in the field are for-profit. By late 2009, Kiva had facilitated over $100 million in loans.

Microlenders like Kiva and Microplace appeared on the scene only after huge aid institutions failed to make significant headway in encouraging entrepreneurship in impoverished countries, often despite budgets in the billions of dollars. Today, a similar lament can be heard throughout the journalism world: Traditional institutions are failing, little guys are suffering, and opportunities to do real social good are being left on the table by unwieldy, old-style organizations that can't figure out how to adapt to changing times and allocate resources efficiently.

One sign of desperation about the state of the industry is last week's Federal Trade Commission (FTC) plan to save/reinvent journalism. Wimpily titled "Potential Policy Recommendations to Support the Reinvention of Journalism" [PDF], the report suggests ways that government might step in to prevent the collapse of local newspapers. Enacting the recommendations in the FTC discussion draft would cost $35 billion annually. As my colleague Peter Suderman explained yesterday, the draft proposes massive government subsidies at all levels of journalism, including additional money to existing public organizations like the Corporation for Public Broadcasting, a journalism division of AmeriCorps to "ensure that young people who love journalism will stay in the field," and a flow of public dollars directly to private enterprises, such as a fund of federal tax dollars to encourage local reporting.

Suggesting that the best way to get high-quality local reporting is to pay grants and journalists' salaries out of federal coffers is like proposing that the U.S. government buy cows, put them on a boat, and then have U.S. government employees walk around the countryside offering them to Kenyans. While the FTC suggests clunky, top-down solutions to support a failing industry, a Kiva for journalism is already up and running.

Spot.Us calls what they do "community powered reporting." The goal is to allow the public to "commission and participate with journalists to do reporting on important and perhaps overlooked topics." And here's the good news for reporters: "On some occasions we can even pay back the original contributors." Right now, a pitch for a story on a failed redevelopment project in Los Angeles has picked up $450 in donations and is looking for $1,050 more. A pitch about space-based solar panels has snagged $205 worth of interest, with $145 to go. A ongoing investigation into the question of whether regents in the University of California system were making private profits by investing public funds garnered $6,117 in cash, with $3,883 to go. One installment of that story, which was republished by the San Francisco Public Press and North Bay Bohemian, tied Gov. Arnold Schwarzenegger to the scandal and inspired a California state senator to call for an audit of the system—just the kind of awareness raising, watchdogging, and dogged digging that doomsayers were afraid would fall by the wayside as traditional local papers faded away. That story on L.A. rape kits? Twenty-six people donated $718—most in increments of $10 or $20—and the story was published in March.

Also located in the Bay Area, the Spot.Us model mirrors Kiva, except that donors don't get their money back at the end; instead they get to read a story. Newspapers, magazines, or other media organization can fund stories too, as a way to secure the option to run the completed story in their pages, essentially using the site as a handy recruitment tool for freelancers. Otherwise, all stories are released on the Spot.Us site under a Creative Commons license, which permits any publication to re-run the story. But most donors on Spot.Us are, as they say during the beg-athons for public radio, "viewers like you."

This model is forcing an evolution of the ideas of accountability and transparency for journalists. One story from late March about the mysterious resignation of a community college chancellor begins with a note from Spot.us indicating that "after several months of digging" in which reporters "requested documents, files and asked the hard questions when everyone else turned away" they failed to get "hard answers." "As a result, Spot.Us and the reporters have agreed to reimburse the original donors." Spot.Us also caps individual donations at 20 percent of the cost of any project, to avoid the appearance of bias or conflict of interest.

Lamenting the death of the local paper has become commonplace in Washington. Fretting about who will cover city council meetings and do vital-but-tedious investigative reporting is fashionable in public policy circles, just as discussions of the intractability of poverty in Africa have long been typical fodder for chatter in the world of international aid. But as Kiva and Spot.Us demonstrate, defeatism on both counts is too hasty.

Katherine Mangu-Ward is a senior editor at Reason magazine.

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  1. Great article. I sincerely thank you.

    Micro-capitalism led by females is so important to world development.

    The great capitalist George Soros sponsors similar programs through his Open Society Institute.

    Of course, Soros is an atheist/drug legal type – so conservatives hate the man.

    1. Re: Shrike,

      Micro-capitalism led by females is so important to world development.

      As opposed to normal capitalism led by everybody else – now, that’s evil.

      1. There is nothing “evil” about capitalism.

        I don’t understand your indictment of the profit motive.

        I hate the word “evil” anyway. It smacks of moral elitism so often falsely claimed by toe-tapping GOPers.

        Go listen to any conservative Southern Baptist preacher work while they fleece their stupid fucking flock. They buy into the GOP narrative.

        1. Nah, it’s the “Church Of The Feel Good” and the Scientologists that fleece their flock, and the flocks are normally Hollywood stars and social hacks….such as yourself.

          1. So you are obviously a gullible SouBaptist….

            Scientology is shit too.

            Your pack numbers in the 40 million range.

            Easy pickings for any GOP huckster.

        2. Re: Shrike,

          There is nothing “evil” about capitalism.

          Yep. And, there’s nothing really that exiting about “micro”-capitalism, which is why I am being facetious about your enthusiam for “female led micro-capitalism.”

          I don’t understand your indictment of the profit motive.

          I don’t understand your enthusiam for this “micro-capitalism” fad. Profit-seeking is what drives the economy, but the fuel is SAVINGS, not credit.

        3. Soros is a commie/fascist who hates libertarianism. He is a corrupt banker who wants the market regulated because he profits from a rigged market. At the same time he spreads the lie that the gov’t protects the little guy. Soros is a fucking scumbag.

          1. Ahhh- another know-nothing right-wing redneck insulting a proven capitalist.

            I bet you listen to Rush “King of the Rednecks” Limbaugh every day.

          2. And Soros is a “banker”?

            You fucking idiot – he runs a hedge fund and they wouldn’t take your shitty little stash if you begged them.

            1. You are the fucking idiot here. Soros is a corrupt ‘financier’ if you prefer that word. If you think that soros is a capitalist YOU are an utter fucking moron.

              Oh wait. Soros is a CRONY capitalist, if that’s what you mean.

              1. Who is Soros cronies with?

                He made the bulk of his fortune during GOP administrations.

                Soros is the epitome of a capitalist – like Warren Buffett and Bill Gates.

                But to you redneck conservatives they are all “commies” because they don’t march to the tune of Social Conservatives – the enemy of liberty.

                Fuck you SoCons. Liberals will win.

                1. I dislike social conservatives way more than you do. Calling me a redneck shows that you are fully retarded. Now sonny go learn how the financial system works, and then learn if soros truly supports ‘laissez-faire capitalism’.

                  1. I dislike social conservatives way more than you do.

                    Apparently you are new here. Posters here despise me for my criticism of Christo-fascist GOPer (I am happy to admit).

                    And I know far more about finance than you can ever hope to.

                    1. Shut the fuck up, you worthless piece of cuntshit from a sterno drinking mother. People hate you because your an idiotic left wing Dondero clone, who endlessly repeats the same retarded phrases, and bitches about all the nonexistent christfags here.

                    2. Why do you defend SoCons?

                      They are the most loathsome pieces of shit in the anti-liberty universe.

                      Perhaps YOU suck the Socon dick?

                      Well, fuck you.

                      Liberty begins with PERSONAL freedom!

                      So FUCK you theo-shits in your own asshole!

                    3. Apparently you are new here. Posters here despise me for my criticism of Christo-fascist GOPer (I am happy to admit).

                      You are the most delusional person I’ve ever known. See Enyap’s summary for why people hate you around here. You’re a crony capitalist, statist asshole.

                    4. Go suck your mullahs cock, Jordan.

                      I support freedom from ridiculous myths.

                    5. I’m an atheist, like most of the people here who hate you, fuckwit.

                    6. Then why am I different?

                      I hate SoCons! Big fucking deal.

                      Why do posters here love anti-liberty SoCons?

                    7. Nobody here gives a flying fuck about SoCons or what you think about them.

                    8. Can everybody calm down please; this isn’t YouTube.

  2. Another thing spot.us good for is showing us what kind of things its fans will fully fund. And it isn’t news, mostly. It’s Oprah stories for really white people.

    It also reveals how much reporters think they should get paid for a couple hours of sub-free-weekly work. That’s embarrassing.

  3. new proposals for massive federal interference in the journalism industry threaten to undermine bottom-up solutions.

    As with everything else the FedGov touches. It should be called “The Intestine”, because it turns everything into shit.

  4. There’s also Kickstarter, which works on the same donation model as Spot.Us. A buddy of mine recently used it to raise $2,500 for a video story he wanted to shoot.

    As for community based reporting, the FTC is showing up to the party Monday morning: AOL’s Patch is on a tear to dominate the market, and there are several start-ups jockeying for share too.

  5. shriek, why do you feel it necessary to call out “Micro-capitalism led by females”?

    If the exact same companies, doing the exact same things, are led by males, won’t the results be, you know, exactly the same?

    1. They’d be superior in every sense.
      Cranks rule.

    2. Dean – third world females dictate cultural change and lead such toward liberal Western values against the wishes of conservative mullahs and priests.

      Women in a democracy never give up liberalism.

      1. dictate = indicate, btw.

  6. Q: What’s the difference between giving a micro-loan to someone in Kenya, who wants to be a tour guide, and giving a tour operator a loan in Washington DC?

    A: On the tour in Kenya, people are hoping to see a Kenyan lion in his habitat, but on the tour in Washington DC, they’re hoping to see a lyin’ Kenyan.

    1. Not bad, not bad at all.

    2. For the win.

  7. Yeah, I saw a special on micro-loans in Africa a few years ago. The whole thing sounded very promising. They’re certainly doing a hell of a lot more good then the millions we’re flushing down the toilet over there. People want to work. There’s just so few opportunities to get off the ground over there.

    1. Reasonable for sure.

      If the Bushpigs had been promoting capitalism instead of abstinence then Africa would be far ahead today.

      Christo-fascism benefits no one except the Vatican criminal class.

      1. “Christo-fascism benefits no one except the Vatican criminal class.
        reply to this”

        Do you write this stuff yourself?

        And it’s supposed to be funny, right? ’cause sometimes I don’t get the punchline.

        1. Do you actually hold down the young boys while the RCC butt-fucks them?

          Or do you just support the Catholics in spirit?

          1. You should write like “Shrike’s Little Green Book” or something!

            Do you have any more where that came from?

      2. “Christo-fascism benefits no one except the Vatican criminal class.”

        Now wait.

        That’s from Mao’s Little Red Book, isn’t it?

        It’s probably right next to the one about how the machinery of capitalism is oiled with the tears of the proletariat?

        It’s ingenious!

        1. I am a strong supporter of free markets.

          But since I don’t swallow the Godspiel you see me (and Buffett, Gates, Jobs ,etc) as “Marxists”.

          You are truly ignorant in you bi-shitwhatever.

  8. You should contact the people who make those right wing t-shirts. Or maybe you should go into business for yourself making Christmas cards for atheists…

    There’s a Nativity scene on the front, but when you open it up it says, “Christo-fascism benefits no one except the Vatican criminal class.”

    1. …and people will laugh and laugh.

      1. Negativland beat you on the t-shirt by about 20 years.
        http://negativland.com/index.p…..amp;type=6

    2. So shrike has pissed everybody off so now we’re going to be whining about atheists. Again? I would call this a Hit & Run meme, but people might start whining about Richard Dawkins if I did.

      1. I’m still trying to understand Shrike’s logic that jumps from “micro-loans are good” to “Christo-facists have ruined the world”…

        I guess I am just not cultured enough to see the connections…

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