EVIDENCE-BASED RESEARCH ON CHARITABLE GIVING

1. What is the Science of Philanthropy Initiative? The Science of Philanthropy Initiative (SPI) is a research and outreach project that utilizes rigorous quantitative methods and partnerships with the philanthropic community to explore the motivations behind charitable giving.

Funded by a generous grant from the John Templeton Foundation, the overarching goal of SPI is to develop a deeper understanding of the types of social preferences that shape philanthropic giving and to apply this knowledge to both practitioners and policymakers interested in philanthropy and the private provision of public goods.

In addition to new research contributions to the field, SPI is invested in partnering with the philanthropic community. We strive to serve as a link between the academic and the philanthropic communities. All research conducted at SPI is done in collaboration with on-the-ground practitioners.

Our research is applicable and relatable for our partners and others interested in the charitable-giving market.

2. What type of research do you do? We use economic theory to generate predictions about people’s behavior and we test our hypotheses using randomized control trials, such as field and laboratory experiments.

3. What is a field experiment? A field experiment, like a medical trial, applies the scientific method to experimentally examine the effect of an intervention in the real world. Economic experiments randomize subjects into treatment and control groups and compare outcomes between these groups. Randomization is what guarantees that if we observe a difference between a treatment and a control group, that difference must be caused by the treatment.

Randomization also allows you to control for several potential explanatory factors such as age, gender, income level, previous giving history (hot and cold donors), location, donors’ preferences etc. This enables you not only to understand what works, but also why. Reaching out to donors has a cost: field experiments allow you to discover the most efficient way to allocate your resources.

4. We already use surveys and focus groups to inform our decisions, why would we want to run an experiment? Surveys and focus groups are an excellent way to learn about people’s intentions.

However, what people say they would do is sometimes very different from what they actually do.

This is because people are affected by the context in which they make a decision, by the amount of attention they put in that decision, and by their emotions. Surveys may not capture these factors because people often do not know ex-ante what they will pay attention to, or they do not consciously realize that context cues or emotions affect their decisions.

Experiments allow us to observe how different interventions (e.g. different solicitation methods) affect donors’ actual decisions in the environment in which these decisions usually take place.

5. We have a lot of data and information about our donors. Can’t we use econometric and statistical analysis to understand what works and what doesn’t? You surely can (and should)! Analyzing existing data is indeed an important component of our research. Natural occurring data, however, have a major drawback: while they tell us a lot about correlation between factors, they often fall short on establishing a causal relationship.

Consider the following example: an organization chooses to add a small gift to their solicitation, and after one year observes that average donations have increased. This is good news, but why is this happening? The improvement may surely be due to the gift itself, but without proper randomized tests one cannot establish causation. It is possible that a third unobserved factor is driving this effect (e.g. better general economic conditions). If this were the case, the increase would have happened also without the gift, thus spending resources on gifts was inefficient. It is also possible that the gift is affecting different donors differently, but the lack of proper randomization hides this effect. For instance new donors may be attracted by the gift, but existing donors may consider it a waste, and reduce their giving. The average effect is positive, but the organization is losing donors, and this may backfire in the long run.

6. How much do you charge for your work? We are not a consulting company, so we don’t charge you for the time of our scholars and research professionals. We are interested in generating original research and publishing it in top academic journals. This is the only currency that is valuable to us!

7. Great! But how much does it cost to run a field experiment? The costs of field experiments vary, depending on the type and scale. For example, if you choose to run a door-to-door solicitation experiment, some expenses for the volunteers should be taken into account. A mail solicitation experiment typically involves the cost of printed materials and postal services. Other experiments may involve gifts or rewards for the donor. Online experiments typically manipulate the online solicitation method, or the information available on the website, and randomizes online visitors based on IP addresses. In this case some programming costs may be expected. The good news is that experiments are aimed at discovering what is the best way to increase giving and are real solicitations: this means that the experiment itself will raise money, which may offset the cost of running it.

8. Will the name of our organization be on the academic paper? We understand some organizations may want to remain anonymous, so whether the name of your organization will or will not appear in the academic paper is your choice.

9. I am the president/founder of a small organization: can I be a coauthor on the academic paper? We are happy to include you as a coauthor, if you wish to.

10. Will you acquire personal identifiable information from our donors? Like medical experiments, economic experiments need to be approved by an Institutional Review Board (or Ethical Review Board). The IRB process is aimed at guaranteeing the safety of participants. In the case of economic experiments, safety typically means privacy. To receive IRB approval, two general conditions need to hold:

1. the experiment does not involve deception of any kind;
2. no personally identifiable information is retained.

For this reason, we are not interested in retaining any personal sensitive information about participants, nor we will ever deceive your donors.

We abide by what academics call data de-identification: while we retain individual level data that is useful for research purposes (e.g. age, gender, income, level of education etc.), we try to design our experiments so that no personal identifiable information is collected (e.g. names, addresses, phone numbers, social security numbers). If the nature of the experiment requires acquiring some sensitive information, we will ensure that the data is de-identified before any dataset is built.

11. Will experiments "poison" my pool of donors? Firms and organizations are rightly concerned that some "bad" treatments may drive some donors away. This is possible, but experiments are set up precisely to avoid applying a "bad" intervention to all donors. Only a subset of your donors will be exposed to new treatments, and once we find the most effective way to solve your problem, you will be able to use the solution with your entire pool. As the proverb goes, "it is better to be safe than sorry".

12. We ran only a part of the planned experiments, but one solution already looks very promising/very bad. Can we stop the experiments? Your organization is obviously in control of its own decisions. However, keep in mind that our time is limited: when we choose to partner with you, we are foregoing the opportunity to run experiments with other organizations. We do not make money out of experiments – our payoff is publishing in top academic journals. Incomplete studies handicap our ability to produce top-notch research. On our end, your commitment to follow through with the agreed research plan plays a major role in our deciding to partner with you. Please refer to the getting started section for more details.

13. What is the timeline of an experiment? Economic experiments are set up to take place organically within your business activity. So for instance, if you typically send out mail solicitations in March, and you want to test the effect of a new solicitation method, the experiment will be conducted in March. Experiments require organization and planning, so it is important that you contact us well in advance. Please refer to our getting started section for more details.

14. We are a small startup and we are interested in partnering with SPI, can we contact you? Of course! We have worked with startups in the past and we are certainly interested in starting a conversation with you. Just keep in mind that we are not a substitute for a traditional consulting company. Our mission is to provide generalizable scientific insights on charitable giving and private provision of public goods. Please refer to our getting started section for more details on how to set up a partnership.

15. We are a for-profit company and we are interested in running economic experiments: can we contact SPI or you work only with non-profit? Of course! Our team of scholars and research professionals conducts research with for-profit firms operating in industries as diverse as energy, transportation, education, health, retail, and finance. Thanks to our research, our for-profit partners have been able to successfully implement mechanisms that promote charitable giving, and at the same time substantially increase firm’s public visibility and revenues.