, Columnist
Navigating Charity's Fast and Slow Lanes
How can charitable organizations and philanthropies encourage donors to give more?
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Imagine that you're running a charity. Suppose you have evidence showing that your charity is highly effective -- that you are really making a difference in people's lives. In your fundraising campaign, should you emphasize how effective you are?
In a new study, Yale University economist Dean Karlan and Clemson University economist Daniel Wood offer a surprising answer. It turns out that large donors respond positively to statistical evidence of effectiveness -- but small donors respond negatively. There's a major lesson here for the charitable sector, and the lesson has implications for other activities and institutions, including political campaigns, health education and various businesses.