Flu vaccines are free to anyone with health insurance and readily available. Yet fewer than half of adult Americans get vaccinated. How can more people be encouraged to take a simple action that could spare them from illness and save millions in health-care costs?
To find out, the Robert Wood Johnson Foundation turned to Ideas42, a fast-growing nonprofit that uses the insights of behavioral scientists to attack problems in health, education, criminal justice, global development, and, most recently, charitable giving.
Drawing on research in economics, psychology, and neuroscience, Ideas42 works with foundations, charities, and governments to find ways to nudge people to develop good habits and make choices that benefit them and society.
“Showing people facts doesn’t change their behavior,” says Deborah Bae, a senior program officer at Robert Wood Johnson and an aficionado of behavioral science. “Our goal is to get more and more people to think about how to incorporate these nudges in medical facilities or schools or nursing homes.”
Predictable Irrationality
Founded in 2008 as a research project at Harvard University, Ideas42 has grown into an organization of about 80 people with offices in New York, Washington, and Boston that last year brought in about $12.5 million, nearly all from foundations.
It has tackled a dizzying array of topics. In the United States, Ideas42 has looked at financial inclusion, college enrollment and completion rates, fuel economy and car-buying, and redesigning cities so that children spend more time playing outside. Elsewhere it has worked to curb domestic violence in Uganda, enable family planning in Nepal, and increase savings rates in Indonesia.
The Bill & Melinda Gates Foundation, its biggest supporter, has enlisted Ideas42 to experiment with ways to increase the quantity and quality of charitable giving. Besides Gates and Robert Wood Johnson, major backers of Ideas42 include the MetLife Foundation, the William and Flora Hewlett Foundation, and the Laura and John Arnold Foundation.
“It’s been a very fast growth curve,” says Josh Wright, one of two executive directors at Ideas42. “Behavioral science has become hot and sexy, and people are interested in it.”
Behavioral science seeks to explain how and why people are predictably irrational. Why do we allow small hassles to get in the way of big rewards? How and why are we influenced by peers?
Why do default settings — that is, the setting on a form that requires no action — carry so much weight, even over important questions like whether to donate organs or contribute to a workplace savings plan?
Interest in behavioral science has been fueled by a series of best-selling books, including Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard Thaler and Cass Sunstein (who went on to work for the Obama White House) and Thinking, Fast and Slow by Daniel Kahneman, a psychologist who was awarded the Nobel Prize in economics in 2002. Mr. Kahneman and Mr. Thaler are advisers to Ideas42, and Mr. Sunstein is an academic affiliate, meaning he’s called on to help with occasional projects.
Raffles for Rent
Scholars at Harvard, Princeton, the Massachusetts Institute of Technology, the Brookings Institution, and the World Bank started Ideas42, the name of which comes from a story about asking the right questions in Douglas Adams’s comic science-fiction novel The Hitchhiker’s Guide to the Galaxy.
Today, Ideas42 is led by Mr. Wright and co-executive director Piyush Tantia. Mr. Wright is a former Treasury Department official; Mr. Tantia previously worked as a management consultant. Charities and governments, they say, benefit from behavioral science by incorporating small changes into their programs or messages to improve the chances of getting the behavior they want.
“If you design anything — whether it be a social program, a piece of technology, an email campaign — it’s going to influence people’s behavior,” Mr. Tantia says. “In our experience, most of the time, people don’t really think about that human interaction. They’re assuming that people will be rational.”
Consider, for example, the simple act of paying rent. The Cleveland Housing Network, which is the largest nonprofit developer of single-family affordable housing in the United States, became concerned because many tenants habitually paid rent on the 10th of the month, the end of a 10-day grace period after rent was due. Some then missed the deadline, paying $25 late fees, and others fell further behind, losing the chance to eventually buy their home. Some tenants fell prey to a much-studied behavioral tendency toward overconfidence: They failed to plan for adverse events and assumed the worst-case scenario of eviction would not happen to them.
The housing network wanted to induce tenants to pay on the first of the month, which would give them a 10-day buffer to deal with other bills or setbacks, according to Pahniti “Tom” Tosuksri, a research and evaluation specialist for the organization. In a pilot project with Ideas42 and the Center for Economic Development, funded by the Citi Foundation, the agency conducted a small randomized, controlled trial testing several nudges. For example, they learned that more tenants paid on time if they got reminders that offered them an entry into a monthly raffle for $100 and a grand-prize raffle of a month’s free rent, so long as they paid by the first of the month. This reduced late payments and became standard practice at the agency, Mr. Tosuksri says.
Giving by All
The Robert Wood Johnson Foundation hasn’t cracked the problem of flu vaccinations — not yet, anyway — but it has asked Ideas42 to work with several communities that identified their own pressing health problems. Our Lady of Bellefonte Hospital in Russell, Ky., wants to reduce the consumption of sugar-sweetened beverages in its community. The Baltimore public-health department and Johns Hopkins University want to improve the quality of prenatal care among the poor. Catholic Charities of Fort Worth is looking for ways to induce people to refill their prescriptions and take their medicine.
“Behavior is related to a lot of health issues,” says Matt Trujillo, who oversees Robert Wood Johnson’s behavioral-science projects, “but behavior is complex.”
The Gates Foundation has made about $8.5 million in grants to Ideas42 since 2013 as part of its programs to improve financial services for poor people around the world and increase college enrollment and graduation rates. Gates also commissioned Ideas42 to help with Giving by All, an effort to influence charitable giving by the masses that complements the work Warren Buffett and Bill and Melinda Gates do to encourage the world’s billionaires to commit at least half their wealth to charity.
Victoria Vrana, a senior program officer at Gates, says the foundation wants to see whether donors can be persuaded to give more money and be more effective in their giving. “There have been all kinds of innovations in fundraising over the years, yet the overall level of giving has not really changed,” she says.
The foundation is working with a dozen grantees on Giving by All, among them Indiana University’s Lilly Family School of Philanthropy and influential crowdfunding sites Global Giving and DonorsChoose.org. In its work on the Gates project, Ideas42 has examined studies of the behavioral science of philanthropy and is teaming with three digital platforms that enable giving — PayPal, Benevity, and Bright Funds — to test new products and tweak existing ones that can affect donations.
Mr. Tantia notes that people in surveys say that nonprofit performance is important to them, but few know how to assess it.
“The entire charitable-giving industry is set up in such a way that it encourages emotional or impulsive giving,” he says. “If we want to change that, we have to try completely new approaches.” He adds that it’s not clear yet whether people truly want to be thoughtful or are comfortable with the status quo: “We don’t know because we haven’t given them alternatives.”
Benevity and Bright Funds both help businesses run giving programs for employees and could enlist companies to recommend effective charities to their employees. “It’s an opportunity to experiment with a lot of the recommendation-type nudging that occurs in the e-commerce world,” says Bryan de Lottinville, Benevity’s chief executive.
Putting Nudges to Work
One goal of Ideas42 is to teach a broad range of nonprofits about behavioral science. To that end, JPMorgan Chase is funding an 18-month program in which 11 charities that focus on poverty-related issues work with Ideas42, and with one another, to solve concrete problems. Participants include the Center for Economic Progress, Neighborhood Housing Services of Chicago, the International Rescue Committee, and LIFT-Los Angeles.
In the meantime, Ideas42 and its clients are always looking for ways to put nudges to work. To encourage its staff to disconnect from work, Ideas42 not only closed its office for a week during the December holidays but tracked daily email volume. (It fell to less than 15 percent of normal over the Christmas and New Year’s weekends but rose in between.)
Deborah Bae, of Robert Wood Johnson, serves dinner to her family on salad plates, which are said to reduce consumption and waste. But, she says, “we’re getting seconds and eating dessert later ... so, not sure that it’s entirely working.” Which only goes to show that change is hard, no matter what tools you use.
Correction: An earlier version of this article misidentified ideas42’s partner on a Cleveland affordable-housing project as the Center for Economic Opportunity. The project was done with the Center for Economic Development.
