They have been on the Oprah show, telling big stories like helping poor Africans find drinking water or giving money to a blind Indian with one leg to start a software company.

Kiva has prided itself on connecting people with money with people who want money. In fact the master connector – LinkedIn founder Reid Hoffman is on their board championing their message. However, according to Richard Goodman, a researcher with the Center For Global Development, Kiva is not exactly what it seems. He says people think that when they donate money using Kiva that all the money goes directly to the person they see on the site. Apparently less than 5% of Kiva money is disbursed and that it does not go to the person they think it is going to.

In fact after Mr. Roodman’s post Kiva’s home page which once promised, “Kiva lets you lend to a specific entrepreneur, empowering them to lift themselves out of poverty,” now simply states, “Kiva connects people through lending to alleviate poverty.”

“There’s a whole new generation of socially connected nonprofits that use the Internet to make the illusion of person-to-person contact much more believable… The problem is that they are no more connecting donors to people than the child sponsorship organizations of the past did,” said Timothy Ogden, editor in chief of Philanthropy Action, an online journal for donors.

You can read the full story on the New York Times and Richard Goodman’s post here.