RA Jobs (Exeter Students): Innovations in (EA) Fundraising ESRC Impact project

I’m hiring for two exciting positions helping to promote the impact of research into fundraising for effective charitable giving. This ESRC-funded project is in collaboration with the Centre for Effective Altruism. You must be a University of Exeter student (UG or PG). This is a Student Campus partner role, for seven hours per week (flexible) from now through April.

Research and Communications Assistant: Innovations in (Effective Altruism) Fundraising 

This calls for a good writer/researcher with an attention to detail, good communication skills, an outgoing and entrepreneurial spirit, and an interest in charitable giving,  behavioural economics, and research impact.

Technology and Data Research/Impact Assistant: Innovations in (Effective Altruism) Fundraising 

Seeking a student with IT skills, a good sense of web design, good communications skills, and an interest in charitable giving,  behavioural economics, and research impact. Data analysis/statistics a plus.

Also see: giveifyouwin.org
innovationsinfundraising.org (especially the ‘wiki’)
davidreinstein.wordpress.com/

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Times (UK): ‘Jam tomorrow is easier to give away’

A nice mention in the Times.

Generosity increases dramatically if people are asked to donate tomorrow’s bonus or inheritance cheque rather than money they already have, academics have found.

Once people have the cash in their hand, or know it is in their bank account, they are more reluctant to let go of it. The study by the University of Exeter business school could influence how charities approach fundraising.

It found that people donated between a half and a third more to charity if they were imminently expecting a bonus or windfall, compared with those who had already received the money.

Our work focuses on asking people to commit to donate ‘if they win a bonus’ versus asking people who have just won a bonus, and we find some evidence suggesting the former may work better. As usual, newspapers (over)state results more bluntly than academics, but it’s not too off. The discussion also mentions our earlier paper finding people are less generous with cash on their desk than with money in their account on a screen. The ‘tomorrow’ angle jibes with Anna Breman’s work.

The headline references Alice in Wonderland Queen who forever promises “jam to-morrow and jam yesterday – but never jam to-day”. However, we hope (and some of the experiments suggest) that these “give if you win” pledges will actually raise money; either they will be binding or people will fulfil their promises.

Progress on bonus giving and giveifyouwin.org

It seems our work is  starting to have some traction. We worked with the Behavioural  Insights team and City Philanthropy in 2012 and they put out this “Call for City firms to help Cabinet Office research into ‘windfall’ giving” (link fixed) highlighting our research.

In June, they followed up with a “1% Bonus Pledge Think Tank”. Hopefully more is to come. Suggestions welcome, of course.

(see also: giveifyouwin.org)

Should you hedge your bets on a Brexit?

What you can do right now to reduce your risk from Thursday’s vote

There is a great deal of uncertainty over the likelihood, and consequences, of the vote on 23 June. However, disagreement is mainly over the magnitude of what will happen in the long run, and not over the direction things will move right away.

Most economists believe that ‘markets are efficient’ at least in a certain sense that they reflect the consensus of expectations. This means that before uncertain outcomes (like the EU referendum) are resolved, the price of assets will be somewhere between the anticipated value after each outcome, here ‘Brexit’ or ‘Bremain’. This includes currencies, stocks and shares, and physical goods like housing.

Consider some of the things that may be most relevant to your long-term financial health (this list is far from comprehensive).

In the event of a ‘Leave’ vote, the consensus wisdom, (in order from more to less certain) is that:

  1. The British Pound will fall in value against the Euro
  2. Both the Euro and the Pound will fall in value against the dollar and other international currencies
  3. UK house prices will fall, (although this may take some time to be fully realised, as the housing market adjusts slowly)
  4. UK stocks and shares (FTSE) will fall in value overall (in international currency, and possibly in sterling terms)
  5. UK firms that depend on exporting from and importing to the EU will be harmed (at least in the medium run), seeing their share values fall and potentially having to lay off workers
  6. UK firms that face European competition in the domestic market will be able to raise prices and/or increase market share, and thus increase profits and see their share values ris

Because ‘markets reflect expectations,’ if the Remain camp wins, the exact opposite of each of the above seems likely. I.e.:

  1. The British Pound will rise in value against the Euro
  2. Both the Euro and the Pound will rise in value against the dollar and other international currencies
  3. UK house prices will rise (note that this rise may happen quicker than the fall predicted above, as housing prices tend to be more ‘sticky’ downwards)
  4. UK stocks and shares (FTSE) will rise in value overall (in international currency, and possibly in sterling terms)
  5. UK firms that depend on EU exporting/importing will be helped (at least in the medium run), seeing their share values fall and potentially choosing to hire more workers
  6. UK firms that face European competition in the domestic market will anticipate lower profits (relative to the previous expectation), and their share values will fall.

How does this affect you?

This depends on your own situation, particularly your employment, your housing situation, your long-term retirement plans, and your current investment portfolio.

Are you a Brexit-loser (and a Bremain-winner)?

For example, if, as for many in the UK, your home is your largest asset, and you’re planning to ‘cash out’ and buy a cheaper house and use some of the difference towards your retirement, the Brexit may hurt you. The Brexit will be all the more harmful if you’re planning to retire outside of the UK, as Sterling is likely to be worth less. (This is particularly harmful if you are sending money to family members abroad?) Do you hold large share of your portfolio in UK stocks, particularly those involved in import and export to the EU? Does your job depend on this?

If this is the case then you are likely to be hurt, in net, from Brexit.

Are you a Brexit-winner (and a Bremain loser)?

Conversely, if you are consider becoming a first-time homebuyer the Brexit may help your finances, and Remain vote will hurt them. This may also be the case if you hold assets or income streams coming from outside the UK but you spend your money in Britain, or hold investments or a stake in a business that will benefit from less competition from continental Europe.

What can you do about it?

Recent articles suggest you should purchase holidays and cheese in advance. These are clever ideas, but laughably small-scale.

If markets are reasonably efficient, there is probably no way that you can act now to ‘always profit’ or even to ‘profit on average’. However, what you can do is to hedge your bets. When we make financial and life plans and decisions, most of us prefer to set things up so that we face the risk of only a small loss or gain, rather than a much larger loss or gain. You would rather have a large chance of being comfortably middle-class than an even chance of being either a millionaire or destitute.

You can help ensure that, whatever the outcome, your losses will be limited by ‘betting against yourself.’ (This will be, of course, at the cost of reducing your gains in the event the vote goes in your favour.)

If you are a Brexit-loser, you could do some combination of the following:

  • Place a bet that ‘leave’ will win (with a bookmaker that doesn’t take to large a commission and gives good odds)
  • Move your sterling into other currencies (buy dollars or Euros)
  • Move your investments into funds that invest in markets denominated in other currencies (be careful when shifting your investments that you do not incur a large penalty or commission)
  • Invest in firms that are likely to benefit from Brexit, and reduce your investments in those that are likely to suffer
  •  Reduce your ‘exposure’ to UK housing (this may be somewhat difficult to do unless you are on the verge of a house purchase or sale)

If you are a Brexit-winner, you could do some combination of the following (essentially, the opposite of the above, but the housing investment is easier to do):

  • Increase your ‘exposure’ to UK housing buy buying ‘residential property bond’ or a fund that invests in residential property or buy-to-let (but beware of large management fees)
  • Place a bet that ‘remain’ will win (with a bookmaker that doesn’t take to large a commission and gives good odds)
  •  Increase your ‘exposure’ to UK housing (this may be somewhat difficult to do unless you are on the verge of a house purchase or sale)
  • Move your other currency holdings into sterling
  • Move your investments out of funds that invest in markets denominated in other currencies (be careful when shifting your investments that you do not incur a large penalty or commission)
  • Reduce your investment in firms that are likely to benefit from Brexit, and increase your investments in those that are likely to suffer

Your choice of the above options should depend both on the cost of these (fees/commissions etc.) and on which of the above effects are most relevant to you. Although the above is conventional wisdom, there is far from a complete agreement about all of these, and you may want focus your hedging on the one that affects you most. If you are particularly concerned about UK housing prices rising (e.g., you are on the verge of being a first-time homebuyer), for example, you may want to buy a fund that invests in UK residential property.

Will you follow this advice? Will you feel good about it?

Economists have evidence that people do not always seem to make financial decisions in their best interest, at least not in the conventional sense. We are impatient. We are particularly sensitive to ‘losses relative to a reference point’, rather than just considering the overall outcomes. We tend to regret actions more than inaction and we regret the losses that occur because we didn’t follow the status quo. Suppose you could invest in something guaranteed to pay a 20% return in one year if a fair die rolled 1-5, and only incur a 5% loss if the die rolled a six. By most measures,this would be a great investment. If you invested £100,000 in this and were unlucky enough to have lost (£5000) you might regret having made this decision, even though it was a good choice in advance.

If you will be mentally kicking yourself for any losses relative to having ‘done nothing’ you may not want to take the above advice, for psychological reasons. On the other hand, if you can be mentally at peace with hedging your bets, and any mental distress in the case where you ‘lose from the bet and win from the referendum’ (or vice versa) will be outweighed by the benefits of ‘winning from the bet when you lose from the vote’, then you may want to hedge your bet on Brexit.

 

ESSExLab innovations and new capacities; partnering with experimenters

Within the next 1-2 months ESSExLab (University of Essex, directed by Simone Dietrich and managed by Patrick Lown) will be building several new capacities:

  1. Recruitment: Conducting a large mail/postal recruitment drive (about 5000 letters/emails)  to attract non-student experimental participants in the Colchester area, focusing on lower-income residents.
  2. Omnibus: Paying those who sign up (plus thousands of student subjects) to complete an online ‘Omnibus survey’ including demographic questions, standard measures of economic, psychological, and political preferences, attitudes, and beliefs, as well as a charitable giving component.
  3. Linking: Developing tools (via HRoot) to connect the Omnibus response data to participants’ later experimental data while maintaining participant anonymity and the integrity and independence of each experiment.
  4. Followup Experiment: Two weeks after the Omnibus, we plan to run a follow-up (likely web-based) experiment on the respondents. We are also keen to run ‘normal’ lab experiments (particularly on the nonstudents who completed the survey) to begin building a rich panel data set.  

We are considering the potential to partner with researchers interested in contributing to and collaborating on the followup experiment(s), recognising our capacity is of course limited. The benefits to you as a partner could include:

  • the ability to link your results to the rich omnibus survey data,
  • some co-funding (for the joint experiments),
  • access to a nonstudent subject pool.

Please email me your thoughts if you might be interested or have suggestions for the above, and we can chat.

– David Reinstein (Former ESSExLab Director and collaborator on this project); daaronr at gmail.com

Seeking partners for charitable-giving trials and innovations

As academics we hope that our research has the potential to go beyond the ivory tower and have an impact on the world, and in turn, we want to learn from real-world practitioners. This has always been important to me, and I have recently been awarded ESRC funding to to pursue and promote this.

In particular, I am seeking to implement fundraising innovations – such as ‘give if you win’  and ‘opt-out social recognition’  – in a variety of contexts, while rigorously testing their efficacy and impact. I am keen to facilitate controlled field experiments as well as less formal trials and pilots. In general I want to exchange knowledge with non-academic professionals, to discuss and learn more about specific fundraising tools, innovations, and impact.

I am looking to partner with:

  • Charities and nonprofit organisations
  • Fundraisers and Professional Fundraising Organisations
  • Payroll Giving organisations
  • Companies and employers interested in CSR and employee giving

For more information, including some specific ideas, links to accesible tools and resources, and a ‘FAQ’ thing, see Charitable Giving: Applying and testing research insights

Article in TheConversation

Should governments enable price discrimination by income? Firms and lower-income consumers would likely benefit.

This article was written jointly with Owen Southam, with contributions from Rasif Alakbarov and Harry Masters.

After some back-and-forth with the editors I think we converged on a piece that is readable to the layperson, without mis-stating the economics.