business economics generosity poverty wealth

Who does your money work for?

Just as a follow-on to my previous post about Kiva and Zopa, I came across this organisation the other day – Oikocredit. (what’s going on with the names here, by the way?)

I mention it because Zopa is a profit-making initiative, and Kiva is a microloans initiative where you just get your money back with no return. You may have looked at both and wondered if there was somewhere you could put a slightly larger amount of money, that was still charitable in its aims. Oikocredit can help you there. They sit somewhere between the two, so you can put capital into the system and see it used to finance development, and get it back with interest. It’s only modest interest at 2%, so I wouldn’t sink your pension fund in it if I were you, but if you want to put a larger portion of your money to work for the disadvantaged, this may be a better way to do it.

As Oikocredit’s website says, this is set-up for “investors who do not aim for the highest possible financial return but focus on social return.” It’s an initiative for those who see their wealth as a means, not an end.

Money is a means, not an end
That may just be the most important thing you can ever learn about money – that money is a means and not an end. If you don’t have a purpose for your wealth, a plan for it, then you’re just hoarding. It’s obvious when you think about it, but money has no intrinsic value, it’s just an exchange mechanism. Just metal and paper, or more likely just numbers on a spreadsheet. In and of itself, it’s never anything more than potential. It’s only worth anything when changes hands, and if you’re money isn’t moving it’s worthless. If you leave it in the bank, the bank is moving it, in the form of investments and loans, and you’ll see a little share of that movement in the form of interest.

If your money is in the bank, the main thing it’s doing is making more of itself, as your bank pursues the interests of its shareholders. Since shareholders are usually rich people, your money is basically at the service of the wealthy. All our savings just cycle around, slowly increasing and delivering ever higher numbers on the spreadsheets, but never changing anything, never making anyone happier or lifting anyone out of poverty. Those increases on the spreadsheet have become and end in themselves.

Put your money to work
If you think of your money as purposeful, as potential, then you might want to take more of it out of the system and put it to work elsewhere. It doesn’t have to serve the rich and leave the poor in their poverty. You can invest your money in ways that can make a real difference. Oikocredit is one idea, as are Kiva and Zopa in their own ways, and I’m sure their are lots of others. Another way to use your money for a social return is to invest it in your children. If your son or daughter is buying a house, why not organise a family loan? You’ll save your children being taken advantage of by the mortgage lenders, and you can still charge a moderate interest if you wish.

There are plenty of other ways families, communities, and churches could spend their money for social returns. I’m going to keep looking for them and writing about them. If you can think of them, tell us about it in the comments. In the meantime, think about your money – who does it work for, and could it more useful elsewhere? Ask yourself what good your money can do, and whether you can make it available to those who need it most.


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