I’m going to toss an idea out to the crowd that I’ve been mulling over for the past six months. I’m wondering how far-fetched this idea is and whether anyone is already testing the assumptions.

In all the literature I’m reading on social finance, we have lawyers talking about what public policy can do, we have entrepreneurs talking about what businesses can do, and we have the philanthropic sector talking about what foundations (and networks of organizations) can do.

The underlying assumption in all of these discussions is that what must be created, due to regulation, norms, or otherwise, must be done through organizations.

There is truth in this which I’m not going to dispute. However, I always get around to thinking about the individual.

I’ll use the recent boom in donor information services as an example.  I’m actually a huge fan of seeing services like Philanthropedia, Place2give, Charity Intelligence, GuideStar, and others expand. None of them are perfect, but they are working at getting better. However, each time I talk to my very mainstream donor friends two relevant facts emerge:

  • They have no idea that these services exist; and/or
  • They don’t actually trust the services any more than they trust non-profits to use their money wisely.

This leaves our mainstream donor still wanting a personal connection with who they give.

Now, we’ve seen Kiva capitalize on the individual’s need for connection with micro-finance borrowers in a very sleek way. Still, the reality is that not all donors want to make loans or give internationally.

That brings me to asking my question:

What’s needed for peer-to-peer social finance to take off? The prototype in my mind has revolved around the Kijiji model – you have something, you need something. I’ve added imaginary bells and whistles involving Google Maps, postal codes, and advertisements. But the basic premise is that people would be willing to help if they know there’s an individual in need.

There are two challenges I continue to receive in this concept. One is safety, that somehow people who “need” are always going to want to rob or harm you as well. My only reply is that somehow the users of Kijiji have learned how to self-monitor. The second is trust. Folks will argue that people can’t trust an individual in “need” to use their money appropriately. To this I usually ask, when we give a few dollars to someone must we not have some faith & trust that the person will use it for what they need?

There’s a ton more conversation to have on the topic. Some will ask about tax receipts, others will ask how you organize something like this, a tiny few will wonder if this website would be fun to do.

I’m wondering if anyone is thinking along the same lines. It’s an interesting conversation for the social finance crowd, one that might help us to move away from the trend of creating new organizations and just ask what would social financing look like if we started to trust and empower individuals.

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