METLIFE FOUNDATION PARTNERS WITH DUKE UNIVERSITY TO IDENTIFY NEW WAYS TO HELP LOW-TO-MIDDLE-INCOME AMERICANS BETTER MANAGE THEIR FINANCES
MetLife Foundation to provide $7.9 million, three-year grant
NEW YORK, Dec. 7, 2015 – MetLife Foundation and Duke University today announced that, with support from MetLife Foundation, Duke University is launching the CommonCents Lab, an initiative that will apply behavioral economics to identify new ways to help millions of Americans improve their saving and spending habits.
The Lab will be managed by Duke’s Center for Advanced Hindsight, which is headed by Dan Ariely, the James B. Duke Professor of Psychology and Behavioral Economics at the university. It will partner directly with banks, credit unions, community colleges, employers and other nonprofit organizations to design, build and test solutions intended to help people make smarter choices with their finances. It will focus on developing steps to help people build emergency, retirement and college savings, and make informed big purchase decisions and end-of-life financial arrangements.
The CommonCents team and its research partners will identify behavior-related challenges and design solutions, as well as implement randomized controlled trials to test those solutions in the real world.
The gap between what people want and what they do is described by social scientists as the “intention-action” gap, said Ariely. “We are supposed to think about all the things we want to spend on now versus later, but the reality is that we live in the moment and we make myopic decisions without thinking much about the big picture or the long term,” he added. “The problem is that thinking about money the right way is really, really hard. So we don’t think about money the right way, and sometimes we just don’t think about our spending at all.”
Dennis White, president and CEO, MetLife Foundation, said, “Most people know that saving for emergencies, college and their retirement is a great –– and they want to save. But, knowing what is helpful and taking action to achieve it are two different things.” White added, “We’re excited to provide funding and partner with the CommonCents Lab to help them identify new solutions that will get people to act.”
The Latino Community Credit Union and the Duke Credit Union, Durham, North Carolina, have already committed to serve as research partners for the Lab next year. The Lab is also seeking three additional research partners. Applications for potential research partners will be accepted until Jan. 15, 2016.
MetLife Foundation funding will go toward developing two locations for the Lab; one in Durham, North Carolina, and another in San Francisco, California. The San Francisco lab will be focused on taking behavioral insights into product development. It will partner with financial technology startups on building solutions to key financial challenges. Startup partners currently include Digit and RetiremapHQ in California and Qapital in New York.
“In a study of 1000 low to middle income Americans we found people have a strong desire for financial security, but the feeling that they are not secure now. More notable, these same people could list on average 4 ways they could improve their financial situation. So why is it that despite deeply wanting financial security and knowing how to achieve it, 36% had less than $500 in savings and 63% were in some form of debt? This is an example of the intention action gap. Bridging this gap, as it relates to the financial well-being of Americans, will be our focus for the next three years. We will specifically help bridge the gap on the main areas where people have told us they need the most help – emergency savings, retirement savings, big purchases and end of life and do this holistically for the family unit,” said Kristen Berman, director of the CommonCents Lab technology team.
About Center for Advanced Hindsight and Dan Ariely
The Duke Center for Advanced Hindsight, led by Dan Ariely, is a leading academic institution committed to studying, designing, testing and implementing behavioral interventions that help people be happier, healthier and wealthier. Through its work, insights and variety of projects, the center aims to change the small details in the environment that will lead to big behavior change. For more on CAH, go to www.centerforadvancedhindsight.com and follow on Twitter at @commoncentslab
About MetLife Foundation
MetLife Foundation was created in 1976 to continue MetLife’s long tradition of corporate contributions and community involvement. Since its founding through the end of 2014, MetLife Foundation has provided more than $670 million in grants and $70 million in program-related investments to organizations addressing issues that have a positive impact in their communities. Today, the Foundation is dedicated to advancing financial inclusion, committing $200 million to help build a secure future for individuals and communities around the world. To learn more about MetLife Foundation, visit www.metlife.org.
We are lucky enough to have a very experienced and expert Advisory Council
Scott Cook: Scott is a co-founder of Intuit, a director since March 1983 and currently Chairman of the Executive Committee. Cook is a director of eBay and Procter & Gamble.
Anat Binur: Anat is an Investment Partner at Innovation Endeavors, where she connects and works with early stage entrepreneurs that think big and are driven by a passion to have an impact on the world.
Rachel Schneider: Rachel is a Senior Vice President at CFSI. Under her leadership, CFSI produces independent, data-driven consumer and industry research and advice.
Ida Rademacher: Ida is Executive Director of the Initiative on Financial Security (IFS) at the Aspen Institute. focused on increasing financial well being for Americans.
Thomas Brown: Thomas is a partner in the Antitrust and Competition and the Global Banking and Payment Systems practices, focuses legal issues affecting the financial services industry.
John Lynch: John is the Ted Andersen Professor of Free Enterprise at the Leeds School of Business, University of Colorado Boulder, and the Director of the Center for Research on Consumer Financial Decision Making.
Cathie Mahon: Cathie oversees all of the CDCU Federation’s programmatic and investment activities. She is committed to promoting financial inclusion and identifying and connecting credit unions to unserved and untapped markets.
Parker Thomas: Parker has spent his career working on, for, and with startups as a software developer, business developer, and investor. He was a Former Partner at 500 Startups. Biz dev at @Pivotal Labs and UC Berkeley alum.