Prominent ‘Science of Philanthropy’ Researcher to Split Time Between IU’s Lilly School and U. of Chicago

John List’s laboratory of philanthropy at the University of Chicago, where he and other researchers used economic and behavioral theory to test fundraising techniques, got a second life Tuesday when it joined the Indiana University Lilly Family School of Philanthropy.

The shared arrangement comes 10 months after a $5 million grant from the John Templeton Foundation supporting the work expired, leaving its future in doubt.

For the past three years, Mr. List’s Science of Philanthropy Initiative advanced the field of behavioral economics in philanthropy with the help of the John Templeton Foundation money. He and his fellow researchers tested theories on why people give in real charitable campaigns. Do they give to show off to their peers? To get a mug or DVD or other gift from a charity? To avoid feeling guilty? To achieve something specific, like the eradication of a disease? Mr. List’s ultimate goal was to use science to improve fundraisers’ effectiveness and hence increase the overall amount that people donate to charity. The effort sponsored research from economists internationally and held three conferences in Chicago to introduce the results to other researchers and nonprofit fundraisers.

Under the new arrangement, Mr. List will still work at the University of Chicago, but now he will guide students at the Lilly School’s Indianapolis campus to devise and execute new research.

A big problem among behavioral economists is “they don’t know what practitioners need,” Mr. List said.

“Once you put them in the same room, scientists can supply what practitioners are demanding.”

Lilly School Dean Amir Pasic called the partnership “a thoughtful marriage of academics to practitioner issues,” in the study of fundraising. He predicted that the combination of Mr. List’s work in the field testing economic theory and Indiana’s expertise on the needs of nonprofit leaders will create a “powerhouse” network of fundraising and management experts.

Fundraising Breakthroughs

Neither Mr. List nor Mr. Pasic would provide details on how much money Indiana University will devote to the effort, but they did say it was less than the $5 million Templeton grant, which ran out in October 2015. Mr. Pasic said pending approval, Mr. List will be the Visiting Robert F. Hartsook Chair in Fundraising. The initiative will continue to support research and the institutions plan to take turns hosting the group’s conference, and Mr. List will participate in the Leadership Roundtable, a semi-annual event the Lilly School plans to hold in Miami in January.

Researchers have made some breakthroughs in the effort’s first three years, said Mr. List, co-author with Uri Gneezy of “The Why Axis: Hidden Motives and the Undiscovered Economics of Everyday Life.”

For instance, the initiative added to a body of work that suggests that donors give because it makes them feel good — what researchers called a “warm glow” — not to increase their prestige or make measurable progress on a social issue. For fundraisers, the importance of the warm glow, which is more prevalent among smaller donors, can be factored into how matching grants are constructed, Mr. List said. Adding larger matches in solicitations will have a limited effect, he said, because those donors don’t respond to the added incentive of a bigger matching gift.

It is less clear whether the application of science can get more people to give or simply prompt existing donors to reallocate their gifts to charities with more sophisticated pitches.

“The initial evidence is that adding science can increase the entire pie,” Mr. List said, adding there was more work to be done in this area.

No More Crossing One’s Fingers

Outside the halls of academia, fundraisers often go by their gut when designing a campaign, said Maria Kim, president of the Cara Program, an anti-poverty nonprofit in Chicago.

Ms. Kim, who sat on an advisory committee of List’s group in Chicago, said the research opened nonprofits up to new ways to solicit donations based on scientific data. For instance, she said, List and his academic peers had helped her fine-tune direct-mail messages. “We tend to send the same thing to everybody and cross our fingers,” she said. Based on the group’s work, fundraisers at the Cara Program try to tailor their direct-mail messages to each recipient.

The Science of Philanthropy Initiative helped give credence to economic theory in philanthropy and made it more appealing for fundraisers who didn’t want to “rattle any cages” to take part in experiments, according to Michael Price, an economics professor at Georgia State University.

Mr. Price, who served as a consultant to the initiative, said that until recently using research to inform fundraising decisions was a “hodgepodge” series of one-off efforts. Now, he is in talks with Georgia State to include courses in the science of giving in its nonprofit-management offerings.

The field has matured since he first considered using science to crack the riddle of fundraising, Mr. List said. In 1998, when he was a researcher at the University of Central Florida, the institution’s dean gave him $5,000 in and asked him to raise money. Mr. List used the money to study the field. His research yielded lots of anecdotes and tips for raising money, but none of it was backed by data.

“I had to fly by the seat of my pants,” he said.