Tuesday, January 29, 2013

Accountability - The Secret Ingredient

Many of us were taught growing up in the church that charity with strings attached is no charity at all. That one simple idea is a key contributor to the rotten foundation upon which our charity has been built. When I give money to a person or an entity or a government, for that matter, and make no provision for accountability I have started down the road to unhealthy dependency. In addiction recovery we call it codependency. I sacrifice who I am and what I have so that you continue to get what you want. In the end you despise me because I can never give you enough and I despise you because you never stop asking for more.

The hurdle many in the charitable world are still struggling to get over is accountability. It's exactly this element that is making endeavors like the Acumen Fund and the Grameen Foundation so wildly successful, in my humble opinion. Instead of coming to people in need with wheelbarrows full of cash and handing it out indiscriminately, they are partnering with people. They are encouraging them to have a plan. They are asking them to seek a vision for a brighter future for themselves and their communities. Then they require that plan to be coherent, well developed and properly articulated.

Part of the plan must include accountability. Not just accountability for repayment of money loaned, but accountability in terms of who will hold them up through this process. Accountability must have as key components a structure for seeing that the plan is implemented. Agreements with suppliers, a network of support that keeps you on track, a set of deadlines and timelines that accurately mark your progress along the way, and a reasonable method of reporting collected in a timely fashion so that deficits in the plan can be caught and corrected.

When we give with no expectation the expectation is met on both sides. By that I mean they expect us to give them money and we expect them to take our money (or clothes, or food, or whatever). If those are the only expectations then as soon as we have given the transaction is complete. That means there is no interest in anything else we have to offer, like advice or encouragement or counsel. We give, they take, see you next month and you better have the next charitable gift in hand.

When I stop giving you money and I start loaning you money a whole set of expectations comes built in. You will repay me. You will tell me what you want to accomplish with the money. You will convince me that your plan is feasible, realistic, sustainable and profitable. You will agree to report progress, make regular payments and follow any other guidelines I set. I agree to be reasonable in my expectations, fair in my dealings with you, relentless in my follow through and consistent in my treatment of everyone with whom I do business. In short, I treat you like an adult who is capable of meeting high expectations. I operate from an assumption that, given the right tools, you can take care of yourself and help your community. And once I have given you this hand up I will not need to return month after month, year after year, with wheelbarrows full of cash.

Just in case you're one of those who still think poor people can't meet such high expectations, remember this. In the history of microfinance the loan repayment rate from poor people in developing nations is 97%.

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