Where Most Needed

There's more than one way for a foundation to promote social change.  An article by Craig Lambert in the March-April issue of Harvard Magazine surveys the currently hot academic field of behavioral economics. 

The field is generating some useful results for nonprofits in areas like public health and microfinance, because it explores systematic patterns human behavior, even though they differ from classical models of "rational" behavior.  Because they are systematic, they offer hope for discovery of methods for increasing and encouraging healthy and prudent behavior, for instance savings in economically disadvantaged communities. 

In addition to the examples in the article, here's a report of a recent study that showed how some people prefer to get bad experiences over quickly, because of the pain of anticipation.  Speeding up unpleasant experiences is the opposite of what one would expect of the classical rational decision maker. 

An interesting aspect of this is that behavioral economics languished in an academic wilderness for many years.  During that time, the Russell Sage Foundation (EIN 13-1635303 Form 990) supported  behavioral economics with over 100 grants and started a summer institute for scholars in the field.  This shows that a foundation may be able to have a greater impact outside the popular model of funding existing organizations.  It may be that basic research will pay off even in charitable fields, and that real innovation may come from universities, rather than start-up charities.