"I was a computer programmer and I took a trip to Arica." Matt Flannery has told this story many times and yet still marvels aloud, "And when I came back, I found that I cared so much about it in my heart."

Even before he followed his new wife, Jessica Jackley, to villages outside Dodoma, Tanzania, and Kakamega, Kenya, Flannery had heard Dr. Mohammed Yunus speak at Stanford about founding his Grameen Bank. In 2006, Yunus, from Bangladesh, would be given the Nobel Peace Prize for the Grameen's development of micro-credit. But in 2003, Flannery 
was new to the topic and finding the whole field "an interesting but academic discussion." 

"As I've walked around and told people what I do for the last four years, I've gotten a lot of, 'Why do you work in other countries when there's poverty right here? Why don't you do things for people in your own backyard?' I live in a pretty poor neighborhood of San Francisco and now I can walk down the street and visit a Kiva loan recipient a couple of blocks from my house."

He was, however, singularly committed to generating business ideas. And Jackley was a staffer at Stanford's Business School in Public Management, rapidly making a decision that she wanted to work in microfinance in Africa.

Six months after they married, Jackley was indeed in Africa and doing consulting for San Francisco's Village Enterprise Fund. Flannery was doing design and software programming, with a BS and Masters from Stanford, himself -- "I was kind of straddling both" -- for TiVo, now an iconic corporation based in Alviso, California. TiVo's claim to fame is the development of the first digital video recorder (DVR), the brand becoming synonymous with scheduling a taping of a television show: "I'll TiVo that because I can't be home when it airs."

Soon, neither Flannery nor Jackley was home to watch television. He'd taken a month to visit her on her rounds in East Africa. In phone calls, they'd already started talking about a concept of loans, not donations -- the intersection of her and his business heads. As he would write later for the MIT Press' journal "Innovations," he came face-to-face with "the painful decisions familiar to anyone who has lived in poverty -- whether to pay school fees, put food on the table, or buy medicine for a child suffering from a curable sickness."

Flannery was so profoundly affected by what he'd seen and heard in African villages -- cases in which a few hundred dollars could vastly improve the quality of life for many people -- that he pursued with Jackley almost a year of planning and research on what they then called Kesho.org, Swahili for "tomorrow."

"Good thing we didn't know how hard it would get, or we never would have begun," he wrote in his MIT article.
http://media.kiva.org/INNOV0201_flannery_kiva.pdf

For anyone interested, Flannery has detailed there the blistering array the young couple faced when they started trying to create a business model amid procedural technicalities, tax-status conundrums, donor-vs.-lender debates, Securities and Exchange Commission definitional quandaries, commercialization trends at the time, and even misgivings about how the U.S. Department of Homeland Security and the Patriot Act might view their planned relations with microfinance institutions (lending banks) in such parts of the world as Gaza and India.

In early 2005, exhausted from what Flannery terms nine months of "asking permission" to make their dream a reality, he and Jackley decided to, as any good Californian would put it, "just go for it." They built a Web site. They both were working, and ended up closing coffee shops and cafes each night, as they built the beta site. A change of name to 
Kiva.org -- and the trade of his electric guitar for a logo -- and Flannery with Jackley were ready to ping their wedding invitation list with requests to fund their "dream team" pilot group of seven entrepreneurs in Tororo, Uganda. A weekend and US$3,500 later, they knew the plan would work.

Today, Flannery leads Kiva with Premal Shah, formerly of eBay's PayPal -- which to this day processes the online financial transactions of the site's success. "Premal's a lot more outgoing and charismatic than me," Flannery says with a chuckle. One look at the page of corporate supporters forming partnerships with Kiva is enough to make it clear that the team of Flannery and Shah packs more than enough charisma to float this boat: PayPal, Ernst & Young, Google, Yahoo, American Express, YouTube, Intel, Facebook, Lenovo, Purex and others stand firmly behind what Flannery and Jackley started in late-night cafe coding sessions.

"Our design challenge at Kiva," Flannery says now in retrospect, "was to try to create a really transparent portal to, at first, the one village in Uganda, and now it has expanded to about 50 countries.

"I'd studied three or four years of design. And what fascinated me about the design challenge of Kiva was, 'How can I make international development real and interactive. Other designs and models on the Internet made poverty seem rather abstract and far away. Our challenge was to make it real. My experience in Africa was incredibly real and hands-on

"I was totally surprised how successful it was even at the beginning. One decision we made was to focus on the people, first and foremost. We wanted to see big pictures, big pictures of people. That's what's needed more," the emphasis on the human factor, "in philanthropy, I think."

During the 2008-2009 global financial crisis, Flannery says, "At Kiva, we're finding people are more socially conscious, more motivated. More motivation, but they have less money. So more people are getting involved, but they're getting in with smaller amounts of money.

"Our site is spreading more internationally," he says. "So though the amounts may be smaller, we're getting more money overall."

At this point, Kiva.org has processed close to US$75 million in loans.

And keyboard kid that he is, even Flannery says he's surprised at the major popularity of lending groups on Kiva.org -- from the mighty  Atheists, Agnostics, Skeptics, Freethinkers, Secular Humanists and the Non-Religious with 4,769 members donating more than $680,000 to a host of one-member "groups" hoping to attract colleagues with such names as 
Soccer Talents and Super Snowboarders 2 the Rescue.

"I knew that philanthropy is social," Flannery says. "People like to do it in a group. It's a way to get connected to other people. There's a tradition of fund-raising parties and galas and fund-raising around social causes. But I was shocked when we launched that feature last year. Within a couple of months, we had about 5,000 of those groups formed. 
I was expecting maybe a few hundred.

"Also, it's interesting the depths to which people share on the Internet. If you join one of those groups and start reading their messages, how much people are talking on those message boards. In the Atheists group, there are people there sharing their lives' stories, their bad experiences with religion, their spiritual journeys. It's pretty interesting."

What's the hardest part of Kiva's work and success?

"I think the hardest thing we do is form partnerships with our partners across the world -- small-ish banks, some of them NGOs" or non-governmental organizations, which post loan applications from their regions and distribute loans. 

"They're spread far and wide. It costs a lot of money, too."

Stop for a second and consider that Flannery is talking about a group of some 115 field organizations in roughly 50 countries, most of which he and Kiva have cultivated into the effective network of partners they are today. "To them, we're a funder. We have to cross language barriers, cultural barriers, distance barriers, financial transparency issues, training them to use our Web site, training them to upload photos from these remote places, tech support --  it's a management challenge and an operational challenge."

"I mean, when we started Kiva, we were thinking it would be the Craigslist of philanthropy, this is a programmer's Web site. It's been a lot harder than I expected."

What's next for Kiva?

"I think for the next three to five years, we're working from the same playbook we're pulling from right now. We just need to focus and doing better what we're doing. We haven't mastered our current business model. That means to do a lot of due diligence, lots of travel, a lot of training. It means making our Web site a lot easier to use. More 
community-oriented -- much more like a video game, more compelling so people come back more to use it. More transparent, too.

"And the last massive change we've made was working in the USA," which Kiva began about halfway into 2009. "I'm excited about it because it represents a further blurring of the lines in people's minds. That's a big part of our philosophy, we want to break down people's categories, to educate people. They tend to think, 'Oh, there's rich countries and there's poor countries and the people in them are totally different.' We hope that people's ideas of divisions can break down like that.

"And as I've walked around and told people what I do for the last four years, I've gotten a lot of, 'Why do you work in other countries when there's poverty right here? Why don't you do things for people in your own backyard?' I live in a pretty poor neighborhood of San Francisco and now I can walk down the street and visit a Kiva loan recipient a couple of blocks from my house."

At 32, Flannery is disarmingly youthful. "Yeah, well, I guess maybe my voice is cracking today or something," he says with a laugh that belies the mildest trace of the strain of single-minded diligence it has taken to create Kiva. In his MIT article, he wrote that the effort "took quite a toll on my personal life from which I'm just learning to recover."

"I'm not that young," he says. "I guess I was 27 when we conceived the initial idea of Kiva" on those long bus rides in East Africa.

"I think there's a beautiful, big opportunity when you're kind of naive about something," he says. "If I'd been an expert in international development and micro-finance, I definitely couldn't have started Kiva. The idea would have trapped me and I wouldn't have felt free enough to take a big risk like this.

"We were lucky we didn't know what we were getting into."

Designed by:
Kiva.org, San Francisco, California, United States.

www.kiva.org

Written by Porter Anderson