Editor's Note: This might be my favorite success story so far because it is so simple - started by a guy making $33,000 a year and is still a modest and fundamentally sound "business of good." My son reminds me from time to time of the old "starfish" story most of us have heard. (Man tells boy who is throwing starfish stranded on beach that there are millions of starfish beached and he can't hope to help them all survive. To which boy says as he tosses one back into the sea, "Yes, but I'm helping this one".) Keith Taylor is an inspiration to me because he concentrates on only what he CAN do... that one starfish he's throwing back in the sea. [more]
"Saving Lives, One Rent Check at a Time"
by Matthew Craft
Forbes Magazine dated August 11, 2008
Keith Taylor turned his check-writing hobby into an online charity targeting the working poor and watched his donor rolls snowball
Keith Taylor used to be a $350-a-month philanthropist. As an English teacher at Middle Tennessee State University, Taylor put up a little Web site offering to help people out with small portions of his $33,000 salary. He'd wade through his e-mail inbox and send small checks to people with one-time needs. There was the woman who asked him to help pay for her son's glasses and the man who needed $65 to cover his monthly auto insurance. It was direct and personal, charity scaled down to the basics.
Television interviews and profiles of the check-writing professor followed. "I was the crazy guy giving his money away," he says. "I just wanted to tell people, if you need help let me know. That's all it was supposed to be."
Taylor, 41, didn't count on becoming the Muhammad Yunus for America's working poor. Yunus, the 2006 Nobel Peace Prize winner, launched the microcredit movement out of his Grameen Bank in Bangladesh. A $100 loan can make a big difference to a farmer in Bangladesh who needs an ox.
Taylor opened up his hobby in 2002 to anyone wanting to help strangers with short-term money problems--as fast-growing a demographic as any in this current economic swoon. The average Modest Needs grant of late is $560 and goes to those who need help with a month's rent or a doctor bill or money to fix a car to get to a new job. The check goes not to the recipient but to the bank, business or landlord that needs to be paid.
Modest Needs funded 1,582 people last year and gave away $884,990, up from $250,000 in 2005. So far this year it has given away $688,434, on pace to top last year's mark. Taylor moved his operation in 2003 from behind his desk in Nashville to New York, where a staff of five in a brownstone basement in Manhattan read through the online submissions. They get 2,000 applications per month. Only 20% win final approval. Once approved, requests appear on the site for 45 days. Half of those grant-seekers don't get funded in time, but they can reapply once more.
The Modest Needs Web site still retains the personal, bare-bones feel of Taylor's original inbox. Visitors to the site scroll through requests to buy new tires for a single mother in Fresno, Calif. or pay a cancer patient's hospital bills in Warsaw, Ind. Donors create an account and contribute a little bit every month to rack up "points," which can be applied toward meeting a recipient's total request. The Herb Alpert Foundation has promised to match any donations, contributing $1.4 million so far. To avoid tapping individual donor accounts for its own overhead, Modest Needs has raised operating funds from the Harnisch Foundation and the Omidyar Network.
Modest Needs is one of a new crop of Web not-for-profits that put a face on charity and give donors the sense that they're fixing problems directly. Kiva is a popular site connecting lenders to entrepreneurs in developing countries. On GlobalGiving you can donate to clean water projects for villages in Morocco's Atlas mountains or support girls' soccer teams in Rwanda. DonorsChoose advertises a roster of classroom proposals submitted by U.S. teachers. Contributing to a specific project gives donors a sense of control, says Arthur Brooks, a professor at Syracuse University who studies philanthropy, activating what he calls "the happy part" of the brain's cerebral cortex. "It makes giving money a lot more like volunteering," Brooks says. "Organizations that understand this are going to prosper."
Only a minority of Modest Needs' donors pick specific recipients, opting to let the organization pick for them, but almost all select preferred categories of recipients such as single parents, military families and victims of domestic violence. The power in Modest Needs' approach is how it reinforces virtue. Seven out of every ten recipients log back into the site as donors. In February 2005 Brenda Fallon got $29.95 through Modest Needs for progesterone shots that she believes safeguarded the birth of her daughter Ciara. A year after Ciara's birth, Fallon read a story on Modest Needs about a woman who became a donor after receiving money for an appraisal to refinance her house. "I thought, 'They saved my daughter's life. I should be giving, too.' I'm embarrassed I didn't do it sooner." She now contributes $10 a month.
Syracuse's Arthur Brooks has been studying the outsize generosity of those already struggling to stay afloat. He found that households making less than $20,000 a year gave away 4.6% of their income, a higher percentage than any other group. Households making more than $100,000 give more in the aggregate but only 3% of their income. Working families making less than $14,000 typically donate more than three times as much as a family with the same income from government support.
Taylor knows firsthand how close people can be to serious problems. When he was in graduate school, he held down teaching jobs at two different colleges and worked at a movie theater. When the timing belt broke on his Ford Escort, he was forced to skip his rent for a month. Taylor's boss at the theater heard he was on the verge of eviction and handed him a $525 check made out to the landlord. "Over a car repair I was almost homeless," he says. "The point is that a small amount of money can make a big difference in people's lives."
He and his staff screen all applications to weed out those with less-than-modest requests, such as the pleas for diamond rings and the waitress who wanted breast implants. Applicants who make it past the first cut have to provide up to 15 documents to verify their situations and their identities, including driver's licenses, utility bills and leases. A back-to-work grant will need a letter from an employer proving there's a job waiting.
Taylor looks especially for people who fall into that gap created by rigid federal aid guidelines. A working mother with income of $30,000 and two children, for instance, wouldn't qualify for help from the government but is probably struggling to stay on top of her bills and would make the Modest Needs cut. The staff looks for those who have at least $250 left after paying rent or mortgage and utilities each month. If an applicant's disposable income is below that threshold, he would probably need more than a one-time donation. Modest Needs insists on being a short-term fix, making the handout a true act of compassion. It turns out that a little boost is all people usually need. Only 10% of Modest Needs' beneficiaries ask again.
http://www.forbes.com/forbes/2008/0811/066.html