The Science of Getting Money Out of Rich People

After I finished my courses for my masters at the University of Chicago, I lingered at the university for another year finishing my thesis and hanging out with my boyfriend. To pay the rent, I got a job at the university art museum. I really loved working in the fabulous space surrounded by paintings and sculptures. One memorable afternoon, a curiator took me down to the storage space and showed me a Frank Lloyd Wright dining room set from the Robie House. The only part of the job that turned me off was the sucking up to rich people to get their paintings.

The problem with philanthropy in this country is that too much of it involves plaques and honors for rich people who have the luxury of giving away their old stuff and then giving them a tax rebate for their generosity.

I very much liked this Sunday's Times issue on philanthropy, because they kept the sucking up to a minimum. I particularly liked this article on the social science of giving.

They discuss the research of John List, an economist at the University of Chicago. Unlike the other economists at the U of C, List doesn't have an Ivy League pedigree, and this may have made him a better researcher.

Even setting aside his time as a coach, athlete and truck driver, List’s background is highly unusual for an economist at the pinnacle of the field. In the Chicago economics department — currently home to four Nobel winners — most faculty members attended one of just a handful of top-notch graduate economics programs. List has broken the mold, and his background helps explain why he has been so open to getting his hands dirty in the real world.

Instead of relying on existing datasets, List conducted his own field experiments about how to get more money out of donors. (Three cheers for innovative research.) He found that matching funds did result in more donations, but higher matching numbers made no difference. Also, they found that donation challenges brought in even more money than matching funds.

I loved this article for its snarky comment about Ivy League schools and its discussion of innovative social science. I also liked learning about how philanthropy can done scientifically, instead of the old fashioned butt-kissing method.

Comments

[Janice]

In the Chicago economics department — currently home to four Nobel winners — most faculty members attended one of just a handful of top-notch graduate economics programs.

I'm always bemused by these situations where a closed circle of scholarship becomes almost calcified: same schools, same programs, same datasets, same conclusions. Yippee for the people who bring what literally are fresh perspectives to the old scene!

[bj]

Great article Laura. I definitely feel a warm glow when I give. In fact, I've started to think of it as spending.

I like the field experiment, but I got to wonder -- how did he get List and Karlan get it buy the Human Experimentation Committees? The second experiment uses deception to get people to part with their money.

In the second experiment, the same solicitation letter is sent out, but stating that the requester has different amounts of money to reaching the goal. The most giving occurs when folks are closest to their goal.

www.donorschoose.com is a great place to try to play these games on yourself. I for one, am certainly way more likely to give money if I can put the funding over the top.