In 2005, a year before Muhammad Yunus won the Nobel Peace Prize for the pioneering microfinance work of Grameen Bank, Jessica Jackley co-founded a peer-to-peer microlending platform called Kiva.
Instead of collecting donations, Kiva asked individuals to lend money, interest-free, to aspiring entrepreneurs in developing countries. The approach upended conventional notions of charity, “the poor,” and global development. In the decade since, Kiva has facilitated more than $730 million in loans to entrepreneurs in 83 countries.
Jackley went on to launch a crowdfunding platform in 2009, years before crowdfunding had entered the public lexicon. Though that company folded in 2012, citing restrictive government regulations, it helped pave the way for the passage of the Jumpstart Our Business (JOBS) Act, which eased the rules and allowed crowdfunding to become the ubiquitous fundraising tool it is today. Jackley is currently an independent consultant and investor with the Collaborative Fund.
Her new book, Clay Water Brick: Finding Inspiration from Entrepreneurs Who Do the Most with the Least, chronicles her journey from a young do-gooder in Sunday school to an internationally recognized leader in business and international development. The book also profiles several of the creative, ambitious entrepreneurs that inspired Jackley along the way.
In your book, you share how the Bible verse “the poor you will always have with you” (Matt. 26:11) haunted you when you were a child. How do you think about Jesus’ words today?
I know now that the story behind it is more than what I imagined as a child. I used to imagine a long line of poor people following me around everywhere, which terrified me. But the idea that there will always be need—in every one of us—makes more sense to me today. There are different kinds of poverty, including spiritual poverty, relational poverty, and emotional poverty. There are needs we all encounter as human beings; we all experience poverty at some point in our lives. Need is universal.
This idea doesn’t haunt me in the same way today. Instead I see it as a sobering reminder that there are always people I can look for to serve and to help. At any moment in time when I have something to offer, there will be someone who has a need to receive. And roles can easily switch—we all have times in our lives when we need to reach out for help as well.
How has the global conversation about large-scale poverty changed in the ten years since Kiva’s founding?
Back then, few people knew what microfinance was. Now a lot more people are aware of it, thanks in part to Dr. Yunus’s Nobel Peace Prize and the UN’s naming 2005 as the year of microcredit.
People’s perceptions of poverty and what’s possible for people who are already working hard to improve their lives has changed in a really good way. We no longer only rely on the idea that the poor just need a handout, that that’s the only option for individuals on the giving side of things to get involved. We know entrepreneurship is part of the solution too.
In the beginning, I was often asked, “How do I know for sure that my money is making an impact?” That was one thing that was really exciting about Kiva: you could see directly where your money went, online and in real time. In general, donors today are much more educated about what questions to ask to know how their money is being used. They’ve gotten the opportunity to see the person into whose hands their money is going.
The only downside is that we might be reaching a saturation point. When I was young, there was a single story about poverty. The story has changed into not just one but many stories, with many ways to be personally connected. It may be harder and harder to hear these stories because there are so many out there now.
Is there some part of the conversation about poverty that’s still missing, or that you wish were talked about more?
I wish the nonprofit sector was better at showing donors that funding operations is really important. It’s rare that you get a retail donor or investor or lender that really wants to contribute to paying rent and keeping the lights on for an organization. We need more around educating people that those costs need to be covered, and even that competitive salaries for nonprofit professionals can be a great thing.
I think the conversation gets too slanted to just one metric: what’s your overhead? I don’t think there should be a magic number, like you can only have 10 percent overhead. I know some very smart people who refuse to give to organizations that have 20 percent overhead. But if an organization is transparent and they are getting the job done—for instance, if an org has 50 percent overhead but they’re curing cancer—I’ll happily send them a donation.
How has the microfinance industry evolved during the time that you’ve been involved in it?
People have become much more aware that microfinance can be a great tool for poverty alleviation. I’ve loved seeing an appreciation for the real power of not just one intervention: not just a microloan, but a microloan plus a microsavings account or microinsurance [insurance for health and property risks for those living on $1 to $4 a day] or other microfinance products. I think that’s where things get really powerful.
However, there’s been a backlash in recent years. But microcredit is not a silver bullet for poverty alleviation. Nicolas Kristof talks about how there are no silver bullets, but only a buckshot approach: you need a lot of smaller things to get things accomplished.
There are some studies that say microcredit hasn’t been as effective with actual poverty alleviation as many hoped it would be. But I think there is often a positive impact regardless. In my experience, I’ve seen other kinds of changes in people’s lives. I’ve visited with women, pre-loan, who speak quietly and don’t make eye contact. After they ask for a loan, they are much more confident and can see what is possible in their lives in a different way. They’ve had the opportunity to work outside the home and to build new relationships as a result. That, to me, is real change. Even when microcredit operates as relief rather than development, there is still value there.
What could be the next big tool for change in the developing world?
There’s a lot of potential in microinsurance and microsavings. I’m also excited about the rising popularity of direct cash transfers—in tandem, of course, with ways to keep people accountable and tools to help them use that money well. There’s an organization called GiveDirectly that’s doing this now. This model is a way to serve others and give them agency on how to change their lives for the better. It’s a very dignified, pure way to empower someone else. If you really trust in someone’s ability to make life better for themselves if they only had access to the right resources and opportunities, hand them cash and say, “Use this however you think is best.”
In the US, how has crowdfunding changed the business landscape?
One, it has opened the possibility for a lot of different people outside of the traditionally powerful networks and geographic regions like Silicon Valley or New York or D.C. to have access to the people and the money that those networks are associated with. So it’s opened up sources of capital to more people. Secondly, it shows all of us a new variety of powerful stories of entrepreneurship, of entrepreneurial projects, and entrepreneurial ways of doing life.
You see entrepreneurship as a source for good and for progress. In Clay Water Brick, you encourage each of us to tap into our own inner entrepreneurial spirit. Why do you think this is so important?
I love thinking about [Harvard Business School professor] Howard Stevenson’s definition of entrepreneurship: “Entrepreneurship is the pursuit of opportunity without regard to resources currently controlled.”
Our world constantly tells us that we need more, to be more, and to achieve more. We need more education, more money, more—fill in the blank. Not only is this unhealthy, but I think this can be really deceiving for people who happen to be born into a place or community or family with fewer resources. I don’t think that’s the message God wants us to internalize and buy into. God has given us a world where we can see and experience abundance.
There’s something about having a vision for the future and pursuing that vision to make things better for yourself and your family, even when you don’t have enough or haven’t earned enough or don’t have the right education. Regardless of what you lack, regardless of what you’ve lost or chosen to leave behind, regardless of what resources you have on hand—to pursue that vision anyway, I believe that’s about faith, at its core.
In their own way, great entrepreneurs have to develop their faith muscles. We may use different language and talk about imagination or being visionary. But there’s something about that that’s very familiar to me, that has a lot to do with the invisible Truth of the world. I believe entrepreneurship has an amazing, redemptive attitude and framework. It teaches us how to live life in a way that is solution-finding and hopeful and optimistic and constantly redeeming the world. It’s about creating something from nothing, about creating value.
How has your perspective on God changed since you began your career?
There is a resilience in my faith and who I believe God to be that I didn’t have before. In the past decade one theme has continued to be true for me: I continue, even with my best efforts, to always come up a bit short. God’s always bigger than I think. God’s always more present than I think. Truth is in more places than I would have anticipated.
You have to experience the good, the bad, and the ugly—in all kinds of forms—to be convinced of this. And I am convinced now. As we get older, we experience more things that are difficult and surprising—and God’s still there. That builds faith, if we let it.
What do you wish the church would do differently to help alleviate poverty?
In my experience, churches often have calls to action that are very much intertwined with evangelism. For me, it was tough to figure out how and when to pair those two pieces and when to have them be separate things. I was never comfortable evangelizing. I just wanted to try to love people and to serve people, which I think Jesus calls us to do. And if anyone wants to talk to me about my faith, I’m happy to share about my beliefs and my personal experience.
I sometimes find that the idea of having to actively evangelize while you’re doing whatever service you’re doing can really hamper people, as it did for me in the past. We think, “I’ve got to do all this together. If I’m serving in a soup kitchen, I feel all this pressure to tell people exactly why I’m here.” For me, it made things weird. I didn’t want to force conversations or make someone else my project.
If you look at the Kiva website, you’ll see that the top lending team is Atheists, Agnostics, Skeptics, Freethinkers, Secular Humanists, and the Non-Religious. The second team is Kiva Christians. I think that’s amazing! I’m a big believer in interfaith dialogue and action, and would love to see that happen more…. If we can come together on one core thing, we can better understand one another and get more done in the world.
