LinkedIn’s Reid Hoffman Gives Kiva $1 Million To “Empower Everyone”

“How you build the future is you motivate people to pay attention and act, to improve their circumstances and run their own lives”, LinkedIn co-founder and philanthropist Reid Hoffman tells me. That’s why his support of microlending platform Kiva’s program has a double positive impact. He put up $1 million so 40,000 people could try helping the impoverished via microfinance without spending their own money. They get inspired, while those who receive the microloans can start small businesses and become self-reliant.

In an inspiring interview, Reid also told me about how he thinks governments should start microlending, that people need to accept that charities and causes aren’t perfect, and the life philosophy he thinks everyone should live by. Be sure to participate in the trials before they run out.

Years ago, Hoffman had a revelation that after his success with startups, he “wanted to do the same thing on the not-for-profit side as on the for-profit side.” Namely, create platforms that could “scale impact using techniques from Silicon Valley — marketplaces, innovation, funding.”

He resigned from the boards of some companies he was working with, heard about,  and got excited about its mission to deliver microloans so needy people around the world could become entrepreneurs. When they first met and Kiva’s president Premal Shah tried to ask Reid a question, he interrupted, “The answer to whatever you’re going to ask is yes.” Soon Hoffman was joining Kiva’s board.

“I obviously think Kiva is awesome. The pattern you want is to empower people to invest in themselves.” This makes Kiva much more sustainable than traditional charities that “give a man a fish”. Kiva literally makes that old saying come true as it provides the startup capital so people can start to fish or raise livestock, create a farm, or open a general store or clothing business. Personally, he believes everyone should “do something that’s not for yourself every day”.

Reid urges other high net-worth individuals to offer support through the way he gave $1 million to fund free trials, which I first learned about from social good reporter Christina Farr. “It’s a great thing folks with money can do. It’s highly leveraged capital – you get nearly all your money back” Reid says. Kiva loans now have a return rate of 98.9%, so the risk is very low.

Right now most loans from those in the United States go abroad where the dollar has a greater reach. However, Reid explained, “I don’t see any structural reason why the Kiva model couldn’t work just as powerfully in the U.S., except you have to get comfortable with giving more capital” because it’s more expensive to get a business off the ground here.

Reid tells me he’s bullish on potential for governments in the U.S. and abroad to help their own citizens with Kiva-like programs, “but you’d have to somewhat isolate it from classic problems of the political process. [Otherwise governments would say] ‘we only want to fund entrepreneurs doing hot dogs and apple pie, not sex education'” or other controversial programs.

Other initiatives Reid supports include Donors Choose for bringing school supplies to classrooms, and Endeavor Foundation which fuels macro-entrepreneurship. The Greylock partner understands that all philanthropic organizations have problems, be they overhead or partners or output. What matters though is helping these organizations improve the world. “Perfection is the enemy of good. If something is 100% perfect it usually doesn’t accomplish much.”

Kiva, Reid Hoffman, and TechCrunch need your help to get Reid’s $1 million into the hands of entrepreneurs as fast as possible. Go to now, choose a needy cause, and give out one of the remaining loans to at no cost to you. Almost $425,000 has already been distributed in just the last few days so get involved before the free trials run out.