Celebrating Chile's inaugural Giving Tuesday with Dean Karlan

Professor Dean Karlan (fourth from right) at a breakfast talk on smart philanthropy in Santiago, Chile. Photo: Alejandra Badilla for J-PAL

Featuring research by Magdalena Aninat, Isidora Fuenzalida, and Dean Karlan.

Philanthropy in Chile is at a pivotal moment. A recent study by the Philanthropy and Social Investments Center at the Adolfo Ibáñez University suggests that philanthropists are transitioning away from actions that are purely charitable to actions that are more strategic.

The study sheds light on how philanthropists in Chile select their beneficiaries, showing that donors value organizational impact over philosophy or reputation. Nevertheless, as for donors everywhere, it’s difficult to find rigorous, relevant, and accurate information about the impacts of their investments.

In November, J-PAL affiliate and Finance sector co-chair Dean Karlan (Northwestern University) visited J-PAL’s Latin America & the Caribbean (LAC) office in Santiago, Chile for a series of events to promote smarter, evidence-based philanthropic decisions.

On November 28, Dean presented at two events celebrating Chile’s inaugural Giving Tuesday. First, he spoke with representatives of Chilean family foundations about smart philanthropy at a breakfast organized by Ameris Capital, a firm that manages the Chilean Social Investment Fund (FIS), a private fund that invests in institutions and social enterprises that combine financial results with socio-environmental impacts. Later, Dean presented to NGOs and social entrepreneurs on the importance of evaluating program impact.

At both events, Dean discussed how a lack of rigorous evidence makes it difficult for donors to channel their donations to high-impact programs and for nonprofit organizations to remain focused on impact.

“Where poor information on the impacts of nonprofits leads to a misallocation of resources, donors give less—and they give to nonprofits with low impact,” Dean explained.

He suggested that NGOs and social enterprises could help solve this market failure by rigorously evaluating and publicizing impact, and donors should support generation of new evidence and uptake of evidence in funding decisions.

Dean Karlan speaks with representatives of NGOs and social entrepreneurs on philanthropic impact in Santiago, Chile in November 2017.

During his visit, Dean participated in several other activities and meetings, including a seminar on financial inclusion jointly organized by J-PAL LAC, the Pontifical Catholic University of Chile, and the Chilean Association of Banks.

The audience included high-level representatives of nearly all major banks and financial institutions in Chile. The event led to follow-up meetings with organizations interested in developing new evaluations on micro-entrepreneurship and micro-insurance programs in Chile, including Technoserve, Fondo Esparanza, and Banigualdad.

What are next steps?

In recognition of the importance of evidence to direct philanthropy, we at J-PAL LAC are strengthening our partnerships with foundations, individuals, and other donors seeking impact-driven investments to reduce poverty. For example, J-PAL often undertakes reviews of philanthropic strategies of major foundations, helping leaders and program officers understand how to tailor their strategic planning and grant portfolios for greater impact.

If you’re an NGO or grantmaker seeking to become more familiar with the evidence base in your sector, start by reviewing J-PAL’s policy lessons and the library of summaries of results from randomized evaluations. You can sort these evaluations by sector, country, outcome of interest, and more. Then, check out J-PAL’s framework for applying evidence across contexts.

Learn more about J-PAL’s work in Latin America & the Caribbean.

Posted by Ana Carolina Mendoza, Analista Senior de Políticas Públicas, J-PAL LAC