Charitable donors give more readily when they feel certain that the dollars they give are having an impact on the cause they care about. Professor Dean Karlan says he’s found a way to give them this assurance.
Karlan, a professor of economics at Yale, visited Yale SOM to discuss the motivation behind ImpactMatters, a newly launched organization that offers nonprofits a certifiable way to demonstrate impact.
“There’s a massive void of information for donors who want to know which organizations’ claims are evidence-based,” Karlan told students on February 17 as part of the Colloquium on the Behavioral Science of Philanthropy. “We want to offer them some proof of impact.”
Likening the process to an accounting audit, Karlan said that an impact audit analyzes an organization’s internal operations as well as the evidence base behind its programs. ImpactMatters also guides nonprofits in the development of tools to produce evidence of impact.
Since opening late last year, ImpactMatters has certified four organizations, and, Karlan said, demand is growing. “We want to create a market so that donations are driven by effectiveness, not accounting data,” he said. “But in order to do that, we need to first certify what impact is.”
Karlan told students that ImpactMatters, based in New Haven, is looking for interns and new hires, who will have the opportunity to help evidence-based nonprofits attract contributions.
“There’ll never be a world where everyone gives,” he said. “But our goal is to move the needle, to help donors who do care about impact find charities to support, and to bring in skeptical altruists who maybe are sitting on the sidelines because they lack confidence in finding good charities.”
About the Event
Professor Karlan is a Professor of Economics in the Department of Economics at Yale, and recently launched ImpactMatters, a new nonprofit that aims to change how other nonprofits and their funders use and produce evidence to achieve their missions.
ImpactMatters conducts impact audits, short-term engagements to (1) guide nonprofits in strengthening their use and production of appropriate evidence of impact and (2) certify to donors that an organization is appropriately evidence-based. Professor Karlan will talk about the history and motivation for a new nonprofit certifier, and discuss some of the key design challenges for a certification scheme that works for nonprofits and donors alike.
Professor of Economics, Yale University
Dean Karlan is Professor of Economics at Yale University and President and Founder of ImpactMatters and Innovations for Poverty Action. He received his Ph.D in Economics 2002 from the Massachusetts Institute of Technology, and prior to that...
Dean Karlan is Professor of Economics at Yale University and President and Founder of ImpactMatters and Innovations for Poverty Action. He received his Ph.D in Economics 2002 from the Massachusetts Institute of Technology, and prior to that completed an MBA and MPP from the University of Chicago. He is a recipient of the National Science Foundation CAREER Award, the Presidential Early Career Award for Scientists and Engineers (PECASE), and the Alfred P. Sloan Research Fellowship. Dean is also on the Executive Committee of the Board of Directors of the M.I.T. Abdul Latif Jameel Poverty Action Lab. His research focuses on microeconomic issues of public policies and poverty. Much of his work uses behavioral economics insights and approaches to examine economic and policy issues relevant to developing countries, with particular attention to policies to increase income and financial wellbeing for those in extreme poverty. In the United States, he works on charitable giving, financial services for the under and unbanked, and behavioral health.