Maximum results from microgrants

Joe Selvaggio knows how far $1,000 can go.

Since 2005, the former Catholic priest and prolific philanthropist has given away more than half a million dollars -- $1,000 at a time -- to what he calls "poor people with potential."

The funds from MicroGrants have bought used cars, laptops and business attire. They've helped restore good credit. They've started a cleaning business that employs immigrant women, a dance studio and a yoga studio. As worries grow about debt and credit in the United States, they also provide a debt-free way for low-income people to catch up and entrepreneurs to get started.

Angie Sandifer, who became a milliner after she was laid off in a Qwest downsizing in 2003, used her grant to buy wood blocks so she could offer a greater range of hat sizes.

"In order to have a lot of styles and sizes, you need to have a lot of blocks," Sandifer said. "I have about 10. There are people who have hundreds, and they're very expensive."

For entrepreneurs like Sandifer, and for people struggling to get by, a $1,000 grant can make a huge difference, said Tina Wombacher, manager of the Project for Pride in Living's Connections to Work program, who has referred many clients to MicroGrants.

MicroGrants began with a simple proposal in 2005. Selvaggio, who had previously founded the nonprofit Project for Pride in Living and co-founded the One Percent Club philanthropy organization, needed something to do in retirement. He approached likely donors with an idea: They could give him money, and he'd pass it along to people who'd use it well. The money would go straight to the recipients, with almost no overhead costs.

The growth was partly luck. A year after the program began, Muhammad Yunus and the Grameen Bank of Bangladesh won the Nobel Peace Prize for their pioneering use of "microcredit," giving small business loans to poor people so they can lift themselves out of poverty.

Suddenly microcredit was in the headlines and MicroGrants' business quadrupled, Selvaggio said.

Selvaggio's grants, though, aren't loans. The money comes with obligations, but repayment isn't one of them.

"We want people to grow equity, not debt," Selvaggio said. "The funders like that concept. They think most Americans borrow too much money anyway."

A microgrant helped Amanda Bridges keep her lights on. Two weeks ago, she came to her PPL job coach, worried that she wouldn't be able to pay her electric and natural gas bills. They totaled more than $500. A few days later, Selvaggio wrote her a check.

The program has been "a godsend" in an era of social-service funding cuts, Wombacher said. But she admits giving $1,000 away still can be risky.

"We don't want to have a quick-fix $1,000 scenario where in six months they're going to be in the same boat," Wombacher said. "They need to be ready for it."

When Wombacher became Tiffany Payton's job coach eight years ago, Payton was living in a Minneapolis women's shelter, unemployed and on medical assistance.

With Wombacher's help, Payton got a job bartending at Applebee's. After five years, Wombacher began pushing her to get a job with a better future.

When Payton finally quit, a $1,000 microgrant helped her pay for business clothes and afforded her the time to be unemployed for a few weeks before finding a new job as an administrator at Advantage Auto Glass.

She got a second microgrant this year to help her restore her credit rating. Now Payton is considering buying a house.

A gift of $1,000 "may not seem like much to the people who are helping you," she said. "To people like me, it's completely life-changing."