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Dean Karlan
Professor at Northwestern University; founder of Innovations for Poverty Action; co-founder of stickK.com
Greater New York City Area
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Northwestern University Massachusetts Institute of Technology
Massachusetts Institute of Technology
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Giving on Tuesday Isn’t Enough
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Dean Karlan
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Donating more and donating more effectively ought not be a one-day post-bloat whim. The post-Thanksgiving frenzy is upon us. After Black Friday and Cyber Monday, Giving Tuesday offers a welcome break from the consumer rush, an opportunity to give back to those in need. If you plan to give on November 27th, use it as an opportunity to jump start your philanthropy. Launched in 2012, Giving Tuesday has now become a global movement. Front and center on their website, under 2017 Results, they claim “300 million + total dollars raised online” and “2.5 million gifts” on Giving Tuesday. But let’s not be fooled by these numbers. Reporting total giving on Giving Tuesday tells us little about the effects of this movement on overall giving for one simple but critical reason: Do those who donate on the Tuesday after Thanksgiving give less at the end of the year? The answer could be quite bad for Giving Tuesday. Or good. It could be that it motivates more awareness of giving, and that spurs even more giving at the end of the year. We do not know. What we do know is that merely knowing that a lot of people plop down a lot of money on that particular day, and did not 10 years ago, does not tell us much at all. We see the same problem in how many nonprofits talk about their work. Nonprofits often make similarly irrelevant claims of impact. For example, a job training program that claims 90% of their participants land a job afterwards, or a school program that claims test scores increased by 20% for their participants, compared to before the program. Neither of these statistics tell us what would have happened without the program (what academics call “the counterfactual”). Without this comparison, we learn little to nothing about a program’s effectiveness. Let’s enter the giving season with a better understanding of impact. Savvy donors should recognize the underlying problem with Giving Tuesday and nonprofit reporting – there is no way to get at impact (the change attributable to an intervention) without considering the counterfactual. To be clear, this is not a reason to forego Giving Tuesday. But don’t be satisfied with giving on a single day. Instead, think of November 27th as a place to start. And consider three additional goals for your giving: First, set a goal for your annual giving. Most people give less than they aspire to give. So ti tackle that, identify an amount or percent of income or assets that you aspire to contribute to charity each year. Build this goal into your annual budget. Second, commit to giving monthly. Or if most of your income comes in lumps, set a plan to give away a portion of those lumps. If monthly, set up recurring donations to your favorite charity or enroll in automatic payroll deductions through your workplace giving program. Regardless of the mechanism, make sure that your monthly donations add up to your target goal for annual giving. Third, give more effectively. For a portion of your giving, contribute only to organizations with demonstrated impact. Look for nonprofits that have an impact evaluation or leverage external research to back up their program model. Turn to external raters like GiveWell or ImpactMatters. Look for nonprofits that do more than tell a nice story or report before and after data on program participants. Ignore the overhead ratio, which reveals little to nothing about the effectiveness of a nonprofit. Let this Giving Tuesday be an opportunity to assess your giving goals – to start giving more and giving more effectively.
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Experience
Northwestern University
Professor of Economics and Finance
Company NameNorthwestern University
Dates EmployedJul 2017 – Present
Employment Duration1 yr 7 mos
LocationEvanston, Illinois
Innovations for Poverty Action
President and Founder
Company NameInnovations for Poverty Action
Dates EmployedOct 2002 – Present
Employment Duration16 yrs 4 mos
stickK.com, LLC
co-Founder
Company NamestickK.com, LLC
Dates Employed2007 – Present
Employment Duration12 yrs
Grameen Foundation
Member of Grameen Foundation Technology Center Advisory Board
Company NameGrameen Foundation
Dates EmployedJan 2013 – Present
Employment Duration6 yrs 1 mo
LocationSeattle, WA
Center for Global Development
Non-Resident Fellow
Company NameCenter for Global Development
Dates Employed2006 – Present
Employment Duration13 yrs
Yale University
Professor of Economics
Company NameYale University
Dates EmployedJul 2005 – Jun 2017
Employment Duration12 yrs
Princeton University
Assistant Professor
Company NamePrinceton University
Dates EmployedJul 2002 – Jun 2005
Employment Duration3 yrs
FINCA International
systems consultant
Company NameFINCA International
Dates EmployedSep 1992 – Jan 1995
Employment Duration2 yrs 5 mos
Bank of America (then Nationsbank)
investment banking analyst
Company NameBank of America (then Nationsbank)
Dates EmployedSep 1990 – Sep 1992
Employment Duration2 yrs 1 mo
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Education
Massachusetts Institute of Technology
Massachusetts Institute of Technology
Degree NamePh.D. Field Of StudyEconomics
Dates attended or expected graduation 1997 – 2002
The University of Chicago Booth School of Business
The University of Chicago Booth School of Business
Degree NameMBA Field Of StudyEconomics
Dates attended or expected graduation 1995 – 1997
University of Chicago
University of Chicago
Degree NameMPP Field Of StudyPublic Policy
Dates attended or expected graduation 1995 – 1997
University of Virginia
University of Virginia
Degree NameBA Field Of StudyForeign Affairs
Dates attended or expected graduation 1987 – 1990
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