New York University
Robert F. Wagner School of Public Service
295 Lafayette Street, 2nd Floor
New York, NY 10012
NBER Program Affiliations:
NBER Affiliation: Faculty Research Fellow
Institutional Affiliation: New York University
Information about this author at RePEc
NBER Working Papers and Publications
|December 2019||Balance Sheet Insolvency and Contribution Revenue in Public Charities|
with Thomas L. Spreen, Travis St.Clair: w26546
Using Form 990 data reported by public charities, we document significant bunching of nonprofits at near-zero net assets, the threshold for insolvency. Bunching occurs despite the fact that creditors cannot force insolvent nonprofits into involuntary bankruptcy. We show that the extent of bunching is greater among organizations that rely more heavily on contribution revenue, and that by inflating their net assets, bunching organizations are able to increase their contribution revenue relative to firms that report negative net assets. Charitable donors appear to use the net assets threshold as heuristic for a charity's financial health; nonprofit managers, in turn, respond to the preferences of their donors.
|July 2019||Does Knowing Your FICO Score Change Financial Behavior? Evidence from a Field Experiment with Student Loan Borrowers|
with Rourke O'Brien, Abigail B. Sussman: w26048
One in five consumer credit accounts incur late fees each quarter. Evidence on the efficacy of regulations to improve behavior through enhanced disclosure of financial product attributes is mixed. We test a novel form of disclosure that provides borrowers with a personalized measure of their creditworthiness. In a field experiment with over 400,000 student loan borrowers, treatment group members received communications about the availability of their FICO Score. The intervention significantly reduced late payments and increased borrowers’ FICO Scores. Survey data show treatment group members were less likely to overestimate their FICO Scores, suggesting the intervention may correct for overoptimism.