You may not know that Freedom from Hunger is an organization with two origins. We arose in 1978 from a merger of the Meals for Millions Foundation and the American Freedom from Hunger Foundation. Meals for Millions was started in 1946 in Los Angeles as a distributor of a scientifically formulated, soy-based food that provided low-cost, high-quality nutrition to malnourished refugees in war-ravaged Europe and Asia and to the hungry in Africa. The American Freedom from Hunger Foundation was started in 1961 with the urging of the Food & Agriculture Organization (FAO) of the United Nations and President John F. Kennedy to educate the American public about hunger and poverty in the Third World and to raise money for anti-hunger programs, including Meals for Millions programs. The boards of directors of the two organizations had a member in common in the late 1970s-Hollywood’s first activist actress, Marsha Hunt. Marsha played a key role in bringing the two organizations together as one.
Marsha was a prolific movie star of the 1930s and ’40s, even making it onto the cover of Life magazine at one point. Then she landed in the early 1950s on Hollywood’s infamous blacklist of suspected Communist sympathizers. Unable to work in the mainstream movie industry, Marsha made lemons into lemonade. She leveraged her star power to promote American awareness of the larger world, especially the world of hunger and poverty. She became an ardent but unofficial advocate for the U.N., especially the world-uniting work of its specialized agencies, such as the FAO. It was no surprise that she was asked to join the board of The American Freedom from Hunger Foundation. The organization pioneered the concept and practice of “walk-a-thons” to raise money, in which volunteer walkers get friends to pledge the cause so much for each mile they walk. The very first Freedom from Hunger Walk, stretching 33 miles, took place in Fargo, North Dakota. No doubt this pioneering of new ways to raise money to combat hunger inspired Marsha’s idea of Thankful Giving.
Marsha took her idea to Capitol Hill. She was no stranger there, having been an activist advocate in 1947 for the rights of screenwriters who were suspected to have Communist sympathies (no doubt this contributed to her own eventual blacklisting). Back in Washington, D.C. in the 1970s, she applied her talents to persuading Senator Hubert Humphrey (MN) and Representative Paul Simon (IL) to introduce a concurrent resolution in the Senate and House proposing the practice of Thankful Giving. As part of his Thanksgiving Proclamation in 1978, President Carter included Thankful Giving as follows:
- I call upon the Governors, Mayors, and all other State and local officials to broaden the observance of Thanksgiving to include the practice of Thankful Giving in their celebration, inviting Americans to share with those abroad who suffer from hunger.
- I call upon the American people to make personal donations to religious or secular charities to combat chronic hunger and malnutrition, and to support the concept of Thankful Giving in order that we may one day assure that no individual anywhere will suffer from hunger, and that we may move to a day of universal celebration in a more perfect community within our nation and around the world.
Marsha Hunt’s vision was bigger than a Presidential Proclamation-nothing less than a new custom around the Thanksgiving Day tables of America. Marsha still holds to that vision and describes it in the same clear voice and cadence of a seasoned actress, despite her 93 years. Thanksgiving should be a day not just for giving thanks for what we Americans have but also for “thankful giving” to those afar who struggle with chronic hunger. It is a balanced internationalist’s perspective: “We Americans give 364 days a year to help the less fortunate in our own country. The 365th day-Thanksgiving Day-should be one day when we give to organizations that relieve and prevent hunger in other countries.” Marsha is even more specific. “We should pass a basket around the table-making sure to give advance warning!-to collect money from everyone, including the children. And the family should together choose which international charity to send their check to.” Marsha sees this custom as good for the family around the table as well as for the hungry poor. “Perhaps this custom will bring families closer together, making them more aware of their good fortune and putting family differences in perspective.”
This year Marsha Hunt celebrates her 75th year in the movie industry (she continued to act in independent films after her blacklisting, her latest film in 2008). And it’s her 60th year as an activist for the poor. She continues to inspire as she stands with confidence and speaks with clarity about her vision of Thankful Giving as a new American custom. She is disappointed that it has not caught on and spread.
I was pleased to tell her that Americans are even more generous to hungry people these days than they were in 1978. While the percentage of the U.S. federal budget going to international assistance is low (far less than 1%) compared to much of Europe and other countries, private giving of Americans to international assistance far exceeds any other nation-on a per capita basis and in total amount. I see so many gifts from donors to Freedom from Hunger that exceed $100 each, and I am astounded every time we receive a check or credit card donation for $1,000 and sometimes many thousands of dollars. For most people, that’s a great deal of money! People may not be calling it Thankful Giving and it may not be happening just at Thanksgiving, but it is happening!
Marsha Hunt is a social pioneer. It is difficult to see smooth progression from an original idea to what we see happening today. People like Marsha have the optimism of a desert plant that produces seeds that may not receive enough rain to germinate for many years. But the rains do come eventually, and then we see the fruits.
Marsha Hunt’s Thankful Giving is a seed waiting for the rain!
Christopher Dunford, Ph.D., President, Freedom from Hunger, has over 30 years of rural development experience in Africa, Asia, Latin America and the United States. Chris speaks and writes for international audiences on the impacts of microfinance, on measurement and management toward social objectives, and on the integration of microfinance with education in small business management and health protection. Freedom from Hunger is an international development organization that brings innovative and sustainable self-help solutions to combat chronic hunger and poverty. www.FreedomfromHunger.org
We are concerned about what’s happening in India. No doubt you’ve seen articles in The Wall Street Journal and elsewhere referring to a microfinance crisis centered in the Indian State of Andhra Pradesh. For counterpoint and perspective from well-informed experts rather than poorly informed journalists, I suggest you check out these commentaries by Niranjan Rajadhyaksha and Beth Rhyne, and for a more in-depth analysis, see the Intellecap white paper.
There is a fundamental paradox in this story-competition for the business of the poor! In summary, microfinance institutions (MFIs) have become “thick on the ground” in Andhra Pradesh and aggressively competitive with the well-established, government-sponsored Self-Help Group (SHG) movement. But jealousy of the upstart MFIs taking clients away from the SHGs is only one driver of government interference with Indian microfinance.
In aggregate, the MFIs themselves have overplayed their hand. Compared to neighboring Bangladesh, microfinance as a social business is quite new in India and less deeply rooted in traditional anti-poverty work than it is in the promotion of microfinance to profit-seeking investors (culminating in the IPO by SKS, the mega-MFI). The new MFIs have created the appearance of being far more concerned about doing well financially than in doing good for clients, community and nation.
Consider this formula for provoking political backlash:
- The “magic of the marketplace” rhetoric of the more prominent commercial microfinance institutions in India is insensitive to the socialist perspective of the Andhra Pradesh state government.
- Indian MFIs charge considerably higher interest rates than the government-supported banks charge on loans to SHGs (entirely justified for institutions aiming to be viable commercial entities without the government subsidies enjoyed by banks-and keep in mind that Indian MFIs are among the most efficient and charge among the lowest interest rates by global standards).
- Add the insult of SHG members going over to the MFIs despite the higher interest rates.
- Sprinkle in a few bad apples, in the form of predatory loan sharks parading as MFIs.
- Allow poor enforcement of standards by the Indian associations of MFIs.
- Provide investor incentives for MFIs to push easy loans to over-indebted borrowers.
- Pressure MFI credit officers to collect loans past due to the point that some officers threaten violence to poor clients who can’t repay.
- Highlight a few sensational stories of suicides by MFI clients (which may or may not have been caused by pressures to repay loans).
The Indian press has had a field day and fostered demagogic political exploitation of the unfortunate situation. It is indeed a crisis. The Andhra Pradesh government has just passed a regulatory law that would effectively shut down MFIs in that state, if it is enforced. For the moment, the MFIs have obtained a “stay” in the Indian courts. But it’s bad! Those who would suffer the most from the collapse of the microfinance industry in Andhra Pradesh are the poorest citizens with the fewest options.
On one hand, the Indian crisis could encourage other governments with socialist leanings (like Bolivia and Ecuador) to lean harder on MFIs (CRECER, our offspring partner in Bolivia, has been under this threat for a couple of years now). The sensationalism or partial ignorance of the global and local press could paint all microfinance with the same negative brush and call into question the whole value of microfinance, maybe even make microfinance out to be a “bad guy” for the poor.
Some commentators even fear there is a global microfinance investment “bubble” about to burst and literally discredit microfinance for the poor worldwide. Such doom-and-gloom ignores the fact that MFIs survived the worldwide recession in remarkably good shape; like the poor they serve, MFIs are remarkably resourceful and resilient in the face of adversity. The “bubble” theorists also overlook the decentralization of microfinance; each country’s microfinance market is quite unique. The troubles in India are unlikely to adversely affect the MFIs in neighboring Bangladesh, much less those in Latin America. The more likely outcome is that microfinance practitioners and their investors and regulators will engage in some overdue reflection on what microfinance can and should do and what it cannot and should not do. But slowing down the spread of microfinance appreciably is improbable, even in India. It makes too much sense, there is too much demand, and it has too much momentum to be stopped in its tracks now.
Introspection in the microfinance “industry” has already created a consumer protection movement to self-regulate the way MFIs treat their clients. The Smart Campaign promotes six principles for client protection, and hundreds of MFIs have signed on to these principles. Implementation of these client protections are the next challenge, but the news from India only strengthens the resolve of MFI leaders to take client protection very seriously in their day-to-day operations.
There is a parallel movement to provide microfinance clients with financial education. Freedom from Hunger and Microfinance Opportunities have teamed up with support from the Citi Foundation to develop and disseminate a “trainer’s guide” for training MFI clients (and the staff who guide them): Consumer Protection: Balancing Rights and Responsibilities. Here are some of the “learning sessions” that MFI trainers can offer current and prospective clients:
- Your Rights and Responsibilities
- Right to Respect, Privacy and to be Heard
- How Much Debt Can I Afford?
- Choose the Best Financial Product for You
- Compare Two Loans
- Two Ways to Calculate Interest Rates
- What to Ask Before Signing a Contract
- Debt-Collection Practices
- A Justified Complaint Benefits Everyone
We all could benefit from such education, don’t you think? While this consumer protection education module is designed specifically to serve the needs of those with very little education, the content is useful to all clients of microfinance.
These efforts to promote better client treatment and also smarter consumer behavior are encouraging signs that the microfinance movement is responsive to criticism where it is due. There’s lots of room for improvement. And those improvements are already in the works. Microfinance will adapt, improve, survive and thrive. The poor deserve that and so much more.
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Christopher Dunford, Ph.D., President, Freedom from Hunger, has over 30 years of rural development experience in Africa, Asia, Latin America and the United States. Chris speaks and writes for international audiences on the impacts of microfinance, on measurement and management toward social objectives, and on the integration of microfinance with education in small business management and health protection.
Founded in 1946, Freedom from Hunger is an international development organization that brings innovative and sustainable self-help solutions to combat chronic hunger and poverty. Freedom from Hunger trains and collaborates with 112 local partner organizations to provide value-added microfinance to groups of women. This leverage through collaboration allows a staff of fewer than 50 professionals to offer its programs to more than 2.4 million women in 17 developing countries of Africa, Asia and Latin America. www.FreedomfromHunger.org
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