Yesterday I tweeted about how World Vision’s gift catalog promotes donations by giving the impression that you are able to buy farm animals and other items for families in poor countries — but it turns out that they often don’t buy the actual animals that the donor thought they purchased.

Puzzling? Yes. Warren Throckmorton quotes a World Vision representative as saying “As you can imagine, the reality of our programming in the field is much more complex and nuanced than simply giving a family an animal in isolation from other programs and services.”

Now, I can understand that. The problem is: if you give people the impression that they are actually buying a goat or other item for a family, when in fact they are not doing so, that is deceptive. 

There is absolutely no place for that. Marketing needs to match reality.

Further, why in the world would you try to motivate someone by means of half truths? Truly, this makes no sense to me.

Another organization, Oxfam, which follows the same practice, says they have never made it a secret that they might buy other items with the donation. So maybe they do a better job of making that clear. But as Warren Throckmorton points out regarding World Vision, a standard visitor to their site who donates through the gift catalog would never get this impression.

Note that the issue is not that these funds are being abused. It sounds like they are still being used for the sake of the poor. The problem is one of marketing. Donors are given the impression that they are buying specific items for the poor in the developing world, when in fact they are not.

Now, this raises a bigger question as well. And that question is: are there better ways of helping the poor in the medium to long term that go beyond giving things altogether? While giving is important, increasingly organizations are recognizing that the answer is yes.

I’ve interviewed Paul Larsen on this question, a pioneer in developing commerce-based approaches to helping lift the poor out of poverty.

Paul is director of the 128 Foundation, where he speaks and provides resources that help Christians think more holistically about human flourishing and poverty relief. He is also vice president of Cheetah Development, where he works with donors, investors, and strategic partners to incubate, lunch, and expand businesses in the for-profit value chain that link the poorest of the poor profitably to the marketplace.

1. What are the main problems with the current approach to helping the poor in the developing world?

I would say the key problems include dehumanizing dependency, perverted incentives and conflicting agendas.

The first “Great Commission” in Scripture is the Creation Mandate. Genesis 1:28 tells us that God’s first word to man was the mandate to get to work. It has been well said that the command to create culture is the command to organize the raw material of creation in ways that allow human beings to flourish as images of God. We are designed to create and produce value. Man flourishes when he creates more than he consumes. And to the extent that poverty programs hinder human flourishing, they dehumanize the poor.

What is unfortunate about even well-intentioned aid is that when short term relief turns into long term aid it not only subsidizes chronic problems that lead to poverty (see When Helping Hurts by Fikkert and Corbett), but also creates a subsequent dependency that hinders and handcuffs the ability of the poor to be obedient to the first command given to mankind.

NGOs and aid organizations play a very important role in emergency relief, in organizing people into groups (for training, etc.) and collecting data. But turning raw materials into food and other goods requires the development of ‘value chains,’ which require the incentives under which businesses operate to create real, rational markets. Aid organizations are set up to spend donor funds and profits would undermine the model.

After pumping some $2 trillion into Africa in the last 40 years, the poverty needle has not moved. Sometimes we chuckle when socialists are asked why socialism has never worked, and they reply that it’s just because the right people have not been in charge. The tragedy in this is that Africa, which has enough land and water to feed 5 times their population, are importing 80% of their food — up from 15% in the 1970’s.

Packing boxes of grain, loading containers full of used clothing (destroying a once robust textile industry in Kenya), asking groups to go overseas to paint schoolrooms, donating money for sheep, goats, chickens or cows and writing checks feels real good because we like to be benefactors. But benefactors need beneficiaries and we must ask if a permanent needy underclass perpetuates that desire.

While it’s easy to develop a heart for the poor, the challenge is to develop a mind for the poor.

2. What is the relationship that you see between business and helping the poor?

The first suggestion is to do the math. If you were to redistribute all the resources in the world available to charity among 7 billion people you would use it up in 30 days or less. So the goal must be to create wealth and value — and that is what business does better than anything else that humans can do.

Regarding resources, using Africa as an example, we see that it contains roughly 30% of every natural resource we can measure, yet only has 15% of the world’s population — but only generates 2% of the world’s GDP. The problem is that Africa has always been considered the place where you extract cheap resources, only to bring them home and make something valuable out of it. The wealth isn’t in the resources, it’s in the engineering, business systems and technical operations that make those resources useful.

In the 1770’s Adam Smith wrote the first book that really made economics something many could finally get their arms around. At that time, both North and South America were being developed and there was a real question about which continent would prevail. South America had some 10 times the natural resources and a much better climate, but Smith predicted that North America would prevail given its particular religious roots and belief in the creativity of individuals which led to, among other things, some of the first patent laws — the ability to own and profit from your ideas.

Over the last 500 years we see that there are no economically flourishing cultures that developed through foreign aid and volunteers. North America, with relatively few natural resources and a difficult climate showed that it’s human innovation and trade, fueled by capital.

3. How does 128 Foundation and its partners seek to help families in the developing world thrive, without giving them anything?

Over 60% of the poor are subsistence farmers, which means some 600 million families are farming to barely starve. In Africa it averages over 70% of the population. Our work focuses on incubating the financial models and value chain businesses that profitably connect the poorest-of –the-poor to the marketplace. Our typical family experiences a 10-fold increase in income and even savings in the first 12-14 months.

We are happy to report that some major aid-based NGO’s are looking for ways to advance our model, so we need to scale up — and we have opportunities for donors, investors and strategic partners.

Paul Larsen is Founder and Director of 128 Foundation and Vice President of Strategic and Faith-Based Partnerships at Cheetah Development. He lives in Minneapolis, Minnesota, and loves engaging with those who seek human flourishing for God’s glory. You can contact him at: plarsen[at]128foundation.org.

So today is Giving Tuesday, a much more important day than Black Friday or Cyber Monday.

One of the most fun and innovative ways to give is through a gift catalog.

This is what Food for the Hungry has been doing for a few years now, and it’s pretty cool. They have a catalog of items, except the items are not consumer goods that you buy for yourself or those on your Christmas lists. Rather, the catalog consists of items that you buy for the poor and which they can use to meet their needs and sustain themselves.

You can buy seed, cows, goats, wells, water purification facilities, and much more — all for the poor. This is pretty cool. It’s a whole other dimension than simply giving a gift of money, because you are able to purchase specific things that are needed.

Food for the Hungry’s efforts here represent a great way to bring innovation and creativity to the fight against global poverty. Their efforts show that innovation and creativity shouldn’t just apply to the for-profit sector — they are just as important in the cause of social good as well.

Their gift catalog is online and is well worth looking through. Plus, as I mentioned above, it’s a lot of fun!

This is a great article in the latest issue of Christianity Today on a new approach to helping lift Africa out of poverty through commerce.

My friend Paul Larsen, who is doing great work in this arena, is quoted several times in the article. (You can also check out the in-process website for the organization he is starting, called the 128 Foundation. Its mission is to drive social, economic, and spiritual progress in the developing world.)

Here’s the start of the article:

Three years from now, the largest port in all Africa is set to open its docks in Dar es Salaam, Tanzania. But the hands that are building the $10 billion port are not Tanzanian; they are Chinese.

China has emerged as a powerhouse in the global market, and many expect it to surpass the United States as the world’s economic superpower in years to come. But the same growth that has improved the quality of life for millions of Chinese is arguably hampering it in Tanzania, Nigeria, Mozambique, and other African countries where China is buying land at astonishing rates. For example, in just two years (2011 to 2013), China’s investments in Tanzania grew from $700 million to $2.1 billion. “China is very keen on establishing brand-name equity or recognition among African consumers, because the African population is going to double by the middle of the century,” Howard French, author of China’s Second Continent, recently told NPR.

Critics of “land grabbing” say the widespread practice displaces local workers, provides fewer jobs, and extracts natural resources (oil, coal, gold) that skip local communities and go straight to international corporations. “Poor farmers and cattle herders across the world are being thrown off their land,” says investigative journalist Fred Pearce. “Land grabbing is having more of an impact on the lives of poor people than climate change.”

One for-profit corporation founded by Christians, however, sees growth potential in poor people themselves. Part of a relatively new investment category called “impact investing,” the company is tilling fertile ground in Tanzania, Mozambique, and Ukraine not only for economic growth but also for spiritual revival.

Read the whole thing.

Tim Keller recounts this story in Generous Justice:

When I was a young pastor at my first church in Hopewell, Virginia, a single mother with four children began attending our services.

It became clear very quickly that she had severe financial problems, and several people in the church proposed that we try to help her. By that time I had begun to share my doctoral research with some of the church’s deacons. I pointed out that historically church deacons had given aid in exactly these circumstances. So the deacons visited her and offered to give her church funds for several months to help her pay off outstanding bills. She happily accepted.

Three months later it came out that, instead of paying her bills with the money we had been giving her, she had spent it on sweets and junk food, had gone out to restaurants with her family multiple times, and had bought each child a new bike. Not a single bill had been paid, and she needed more money.

What would you do?

Here’s how one deacon responded:

One of the deacons was furious. “No way do we give her any more,” he said to me. “This is the reason that she’s poor — she’s irresponsible, driven by her impulses! That was God’s money and she wasted it.”

That is exactly how not to respond. It sounds reasonable. “She wasted the money.” But it is arrogant and judgmental.

Here’s why. That very deacon is guilty of doing the very same thing with God’s gifts to him. Every single gift that God gives us we misuse in some way. And yet God keeps giving.

He can say “well, she did it much more flagrantly.” But to say that would be to move too fast and miss the main point.

As sinful people, we are all guilty of squandering God’s gifts to some extent. For example, God gives the gift of speech. Yet we sometimes use that to discourage and talk down to people. He gives us the gift of our minds, but we sometimes use them to covet and disobey his commands. And even the most “responsible” person with his money will make some selfish decisions.

Does God say “well, that’s all then. I’m not going to let you speak any more, or use your mind, or enable you to earn any more money.” No, for Jesus says “[God] makes his sun rise on the evil and on the good, and sends rain on the just and on the unjust. For if you love those who love you, what reward have you? Do not even the tax collectors do the same?” (Matthew 5:45-46).

And we must also remember that Jesus came to save us from a situation that was entirely our fault. 

Jesus clearly does not have the mindset that when a person wastes something, we need to let them stew in their own juices. The problem with such a view is that it lacks mercy, and God is after mercy in our hearts — not simply absolute justice (Matthew 9:13). The whole point of the Sermon on the Mount is that we are commanded to be more than just — we are to be merciful.

If God were simply after absolute justice, he would never and could never have sent Jesus — whose mission was to forgive and show grace. This means that mercy and grace now become an essential part of the righteousness God requires of us — and not simply things like “stewarding money well” (which, oddly enough, is often defined in a way that excludes grace — the very thing God requires his money be used for). 

I think one reason for the centrality of mercy is that mercy most of all demonstrates our utter dependence on God. To fail to be merciful is to fall into thinking that you are the source of your own advantages, rather than God.

Hence, I would suggest that this deacon was actually the greater sinner in this situation than the woman who possibly wasted the money. For the woman is simply guilty (perhaps) of wasting money, whereas the deacon is guilty of lack of mercy. 

But was this woman even in sin at all? This is the second problem with the judgmental attitude of the deacon. It blinded him to seeing perhaps some greater realities going on here that show that the woman’s behavior may have in fact been much more understandable (though contrary to cultural expectations) given the circumstances of her pain. 

In other words, the poor are in great pain, and being in pain changes things drastically. The deacon is looking at the situation without accounting for her pain. Given her pain, her actions actually make a lot of sense. I know it is counter cultural to say that, but this comes to light as we read the rest of what Keller has to say on this story:

I countered with some passages from the Bible on doing justice for the fatherless and needy….[Then, applying some of Jonathan Edwards’ answers to objections to giving to the poor], I got our deacons to continue their aid to the single mother.

As time went on it became clearer to the deacons that the reason she had squandered the church’s money on restaurants and new bikes was that she felt terribly guilty for the poor life she was giving her kids. “It’s so hard being the child of a single mom in this town. And I can’t buy them the nice things other kids get.” When she had the church’s money in hand, she could not resist the temptation to take the children out to restaurants and buy them bikes, because it made her children feel like they were now part of a normal family.

When we began to look at her in this light, her behavior not only made more sense, but our hearts were touched. Her actions were not simply selfish.

When we understand that, we see that the woman was not being quite so irresponsible as the deacon had accused her of.

Now, I’m not saying that this woman should have bought the bikes for her kids and failed to use the money to pay the bills. As Keller also says, though her actions were much more understandable, “nevertheless, she had not kept her word to us, and we showed her that what she had done was shortsighted.”

My point is this: Though her decisions were not necessarily the wisest thing to do, judging her and cutting her off as the deacon initially did was an even greater sin because it lacks compassion. We need to understand this before we go about assessing and judging the way people in poverty allegedly spend their money.

The thing we need to understand about compassion is that it is not just about helping a person in need. The deacon had that — initially — and so we might wrongly think he was being compassionate, because he tried to help at first.

But that is only surface-level compassion. It was a compassion fail because the deacon failed to understand that true compassion has a much deeper dimension.

The way compassion works is that it makes allowances for peoples mistakes. This is the true test of compassion, because it is how God treats us: true compassion makes allowances for mistakes and keeps working with people anyway. 

A compassionate response to the woman would have first realized that there may be larger factors going on here which show that the behavior was not simply selfish. Then, a compassionate response would not have sought to end the aid to her because of the mistakes she made, but would rather have recognized that moving through mistakes is part of the process of growth, and thus must be allowed for.

If she would continue to refuse to pay bills with additional money given, that would indeed be a bad thing. But to refuse to give allowance to people, even when it seems that what they are doing is a bad idea, is very contrary to the nature of compassion and how God treats us. 

Second, true compassion would recognize that perhaps money for bikes and restaurants would be wise to have given her as well. For why should someone be left in pinching want, with just the necessities of life, and withheld some of the fun things in life that most people take for granted? Why do we so often have this minimal approach to helping the poor? Once again, God does not limit us to just the necessities of life, even though we have sinned greatly against him.

Third, and most of all, compassion means this: ditching the superiority complex. The root problem behind the deacon’s thinking was that he was exhibiting the superiority complex. He came in and thought he could judge and assess this woman. This failed to recognize, as we have already seen, that he was surely himself guilty of “abusing” God’s gifts in various ways in his own life — and yet God had not responded to him the same way he was responding to the woman.

Beyond this, though, the superiority complex also manifests itself in assuming you know exactly how another person should proceed. Instead, compassion recognizes a place for individual differences and the need for the poor to be able to utilize their own judgment as much as possible. Using one’s own judgment is part of learning how to escape poverty, and thus if it is denied to the poor, then the entire endeavor of helping them escape poverty is defeated.

And part of learning anything includes making mistakes. That’s why, while seeming “wise” and “responsible,” the deacon’s initial response would actually have kept the woman in poverty because it would have cut her off from the path of learning how to begin using money better — a path which requires the development of judgment, and thus includes mistakes.