Aurelia

Aurelia Kassatly

Senior Manager Private Clients
Charities Aid Foundation

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E: plannedgiving@cafonline.org

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THE NOBEL PRIZE AND ITS IMPLICATIONS FOR PHILANTHROPY

There is no quick fix or one-size-fits-all way to tackle socio-economic problems or alleviate global poverty.

Without trying and testing out solutions, rather than making assumptions, it’s hard to know whether interventions are successful or not.

This year’s Nobel Prize for Economics is evidence of that, shining a light on this new experimental approach and how this is changing the way that governments and charities are scaling up interventions to alleviate global poverty.

The three winners, particularly the husband-wife team of Esther Duflo and Abhijit Banerjee, made a name for themselves evaluating interventions designed to improve the lives of the millions of people living on less than a dollar a day.

Since the couple established the Abdul Latif Jameel Poverty Action Lab (J-PAL) in 2003, the organisation has carried out over 900 randomised trials across 83 countries.

This is great news for philanthropy for many reasons.

The first reason, and arguably most important, is that a pragmatic and evidence-based approach such as this puts beneficiaries at the centre of any programme or intervention designed to help them.

The second is that it enables us to question long-held economic beliefs and worldviews.

People often come to philanthropy with preconceived ideas about what is needed to lift people out of poverty or difficult situations.

It is rare that these preconceived ideas play out in practice. Research such as this enables us to do better for the people who need it most.

The third is that all studies and trials completed by J-PAL are publicly available on their website, whether a positive impact was detected or not.

J-PAL also share a wealth of resources and run trainings on the type of trials they run and how to do them well.

Such transparency is unusual in the charitable sector and helps organisations working in similar areas avoid duplication and improve their own programmes.

The fourth is the commitment to working with governments. While charities do valuable work, the only way to ensure that the benefits of a programme reach all beneficiaries in need, is to ensure that programme is rolled out nation or region-wide.

Although many of the programmes that Duflo, Banerjee, and their colleagues at J-PAL evaluate are run by non-profits, they work with policymakers and government agencies worldwide to help them understand and apply J-PAL research and scale-up successful interventions.

Using evidence to guide donation decisions and inform grant making strategies is gaining ground. In the UK, the government’s network of What Works connects leading non profits, academic centres, and governments to trial, test and, if the evidence supports it, scale-up programmes to improve health, education, and wellbeing across the country.

In the US, GiveWell evaluates existing research to identify the most cost-effective and impactful donation opportunities in the field of global development.

Both of these organisations, and others like them, do valuable work that stands to improve the way philanthropic capital is allocated.

Let’s hope this Nobel victory encourages this trend to grow further.

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