Anya Samek is an Assistant Professor at the University of Wisconsin-Madison, currently a Visiting Assistant Professor in the Economics Department at the University of Chicago. Anya received her Ph.D. in Economics from Purdue University in 2010 and was a Griffin Postdoctoral Scholar at the University of Chicago in 2010-2012.
Anya is an applied microeconomist and primarily uses the methodology of experimental economics to answer research questions. Anya has training and experience in both laboratory and field experiment approaches, and believes that the two are complementary. She also believes in the value of interdisciplinary research for advancing the science of economics. Anya's main research fields are in Experimental and Behavioral Economics, Public Economics, Applied Economics, and Health Economics.
Purdue University held its second annual “Day of Giving” last week, breaking the record for the biggest single-day fundraising campaign in higher education. Purdue raised nearly $14 million dollars from over 9,500 gifts in just 24 hours. That’s nearly $60,000 every hour. I’m proud to call Purdue my alma mater!
How did they do it? Purdue used a number of proven approaches to both increase donations and make giving fun. You can see their results at http://dayofgiving.purdue.edu
Directed Giving Opportunities: When you give on Purdue’s Day of Giving, you can easily direct your gift to any number of different recipients. Your gift can go to a college, the Purdue scholarship fund, student organizations, or athletics. According to a recent research paper by SPI friends Catherine Eckel, David Herberich and Jonathan Meer, allowing higher education donors to direct their gift significantly increases donation amounts. We saw this at play at Purdue this week as well.
Reducing Hassle Costs: The interface to give was straightforward, and donors had the ability to select one or multiple units to send their gift. In a recent paper my colleague David Reiley and I have been working on, reducing hassle costs is key for increasing the number of people who give (there, we reduce hassle costs by offering payroll deduction, but the idea is similar).
Leaderboard: The Leaderboard is also important. Not only could donors direct their gift, but each participating unit at Purdue was ranked on the website in real-time based on total donations and number of donors. Units were ranked based on overall donations and on participation, creating a sense of competition among donors. We know from research in the lab that competition between teams generates increased effort – in this case, the competition starts with the Leaderboard and the increased effort is greater giving.
Matching Gifts: The Leaderboard didn’t just come with a prestige factor – Purdue put money behind each ranking. Units with the highest overall donations split a total of $100,000 in bonus gifts, depending on the share of donations; while units with the highest number of donors split a total of $50,000 in bonus gifts. Moreover, certain units offered additional matches – the Purdue Scholarship Fund was matching donations $1 for $1. SPI research shows that matches both increase overall donations and the number of donors, regardless of the size of the match. Related research by Steffen Huck and Imran Rasul suggests that the power of matches comes from signaling the value of the gift, and that some matches may actually crowd out donations. This is why bonus gifts combined with a Leaderboard might work quite well – since the final level of match is based on number/total number of donations, crowd out should be minimized. Read our summary of matches here.
Social Media: Social media was used before and during the event. Prior to the Day of Giving, Purdue, and each organization who participates contacted their alumni base for maximal exposure through e-mail, Twitter, Facebook, and Instagram. For example, I learned about the Day of Giving both from Purdue directly and from the Krannert School of Management, where I received my degrees. Spreading the word is important, but what came next is even more meaningful. After making their gift, donors were encouraged to share the fact that they gave, with a request for others to give, on their Facebook wall or Twitter feed. As SPI friends Ragan Petrie, Marco Castillo and Clarence Wardell will tell you, “Two main reasons why people donate to charity are that they have been asked and asked by someone they care about.” Ragan, Marco and Clarence’s paper provides some interesting data on how to maximize the power of friends asking friends, and you can read about it here.
I’m delighted to see all of these strategies used in combination. And looking forward to what Purdue comes up with for 2016!
Left to Right: Orsola Garofalo (University of Copenhagen), Menusch Khadjavi (University of Kiel), Marina Schröder (University of Cologne), Anya Samek (SPI / UW-Madison), Roel van Veldhuizen (WZB Berlin), Boris van Leeuwen (University of Toulouse), Karina Gose (University of Magdeburg) and Kristina Bott (Norwegian School of Economics).
Last week, SPI friend and sub-award winner Uri Gneezy (University of California – San Diego) organized the 2nd annual Conference on Experiments in Policy. I had the opportunity to attend and learn about exciting new research conducted by fellow academics. I presented recent work with my SPI friend and co-author David Reiley (Pandora) on reducing hassle costs in charitable giving (more on that in a later post).
SPI was also pleased to award 7 travel awards to young researchers to attend the conference, including awards to Roel van Veldhuizen (WZB Berlin), Marina Schroder (University of Cologne), Boris van Leeuwen (University of Toulouse), Menusch Khadjavi (University of Kiel), Karina Gose (University of Magdeburg), Orsola Garofalo (University of Copenhagen) and Kristina Bott (Norwegian School of Economics).
The young researchers also presented their papers. Boris van Leeuwen (University of Toulouse) presented a study on how competition for status can affect contributions to public goods. The study was conducted in the laboratory. Participants decided on how much they wanted to contribute to a public good themselves and which contributions of others they wanted to use. The main take-away of Boris’ work is that when status is associated with the use of public good investments, people will compete to be the one who provides the public good.
For practitioners or policy-makers, Boris’ work means that emphasizing status can increase public good contributions. One possible way to do this is by making the number of users more salient, for instance by providing access statistics on online platforms. However, when status rents and/or groups are very large, competition may be costly to the group. In this case, competition can become so intense, that people overinvest in the public good. A good example would be more people than optimal working on a crowd-sourced website like Wikipedia. As far as I see it, a big problem that online communities struggle with is how to increase contributions by members – and so far, I don’t see too much ‘over-competition’ happening in the real world. In summary then, online communities should think about doing more to encourage competition in providing public goods.
Menusch Khadjavi (University of Kiel) presented his study on the adverse effects of transparency in public policy, a collaboration with co-authors Andreas Lange and Andreas Nicklisch from the University of Hamburg, Germany. Menusch’s idea was to conduct a laboratory environment mimicking a real-world setting to understand what kinds of policies deter embezzlement by beurocrats – where the money embezzled comes from voluntary contributions by citizens.
Menusch’ and co-authors’ study points out possible disadvantages of transparency in public policy when bureaucrats cannot be sanctioned (sufficiently). They argue that this may be the case in democratic and especially authoritarian states, e.g. due to inflexible government employment. Having a bad reputation as a bureaucrat may be accepted more easily if embezzlement is profitable and inevitably detected due to transparency, i.e. when hiding embezzlement is not possible.
Menusch concluded that for policy-makers, this means that there is a need to advocate good governance in which both transparency and accountability are introduced side-by-side, as transparency alone is not a sufficient instrument for fighting corruption - in fact, their study finds that transparency alone may undermine good governance.
It was great for SPI to fund these great researchers and participate in the 2nd Annual Conference on Experiments in Policy. If these talks sound intriguing, then be sure to put September 11-12th 2015 on your calendar, and come to the University of Chicago for SPI’s 3rd annual conference to learn more about the work our researchers are doing.
One of the strongest results from the field and the research is the impact and the power of "the ask". While many, many people give because they are altruistic and generous, we see a great impact of social pressure and social norms on giving behavior. With a greater number of people than ever online, asking friends, and being asked by friends, is becoming easier. Enter Giving Tuesday – a movement to create a national day of giving, using social media as its stage.
Giving Tuesday was a great success last year. According to their website, charitable giving rose by 53% on Giving Tuesday in 2012 relative to the year prior. And I have no doubt that Giving Tuesday will be a success in years to come. The movement harnesses key behavioral principles that economists and psychologists have documented in past years. First, social norms are extremely important. If I see my friends give, then I am more likely to give. Social pressure plays a role too – if my friend asks me to give, I would feel guilty to say no. Second, we know that givers feel a 'warm glow' or satisfaction from the gift itself. What better way to harness that 'warm glow' than through giving a donation on Giving Tuesday?
However, Giving Tuesday raises one big open question: what will be its effect on long-term gifts? As we see it, two things could happen. On one hand, we could argue that donors will shift their giving throughout the year to giving on only one day – thereby negating any positive effect of the holiday. On the other hand, we could predict an increase in the size of the 'charitable pie' – more asks should generate greater revenue. It will take more data to know for sure, but personally, I’m leaning towards an expansion of the pie. We’ve seen in our research the importance that the ask plays, and we’ve seen giving campaigns fail when non-profits do not ask enough. We’ve also seen great impact that social media campaigns have had in other facets of the market – for example, in the elections.
The Science of Philanthropy Initiative has a mission of answering many big questions, though the biggest question of them all may be: what happens when charities compete? We are using field experimentation to learn the answers.
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