Make a Loan
With fewer resources to go around, donors may want to consider a variety of options that let them do good, without giving the money away.
With a donor-advised fund from Schwab Charitable, for instance, people can use up to 10% of the money in their charitable accounts to guarantee microloans -- loans of a few hundred dollars or more made to needy people usually to develop or expand a small business. The program runs in concert with Grameen Foundation, a global microfinance nonprofit that provides capital to microlenders in poor communities.
It works this way: If one of the microfinance organizations being guaranteed fails, it gets a portion of the donors' funds so it can meet its obligations. If the lenders don't default, the money stays in the charitable account.
Another option: A number of microlending Web sites such as Kiva.org allow people to make small loans to individuals (of $25 and up), such as a Peruvian entrepreneur starting a local basket-weaving business. They get their money back within six to 12 months. Then, they can funnel the money into another loan, donate it to Kiva or return it to their bank account.
Another microfinance site, eBay subsidiary MicroPlace.com, takes this concept a step further, by allowing people to earn returns on their investments. People pick a microfinance institution to invest in -- starting with as little as $20 -- and choose when they get repaid, from three months to five years.
Accion's Global Bridge Fund also allows investors to earn interest ranging from 0% to 3%, depending on the risk level and length of the loan. Investors can start with a minimum investment of $2,000.
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