REWARD VERSUS PHILANTHROPY MOTIVATION IN CROWDFUNDING BEHAVIOR

Crowdfunding is an online platform service that helps creators develop their projects by collecting small amounts of money from the public. This paper examines the relationship between funder motivations and actual funding behavior on crowdfunding platforms. We combine two types of datasets; namely, funder surveys and actual transaction data, to empirically probe the dynamics among reward motivation, philanthropy motivation, funding timing, and funding amount. We further examine how the dynamics are moderated by funders’ demographic characteristics. We find that reward motivation is associated with late funding, whereas philanthropic motivation is associated with early funding. When it comes to the funding amount, philanthropy motivation is positively associated with the amount of funding, especially in the earlier stages before reaching the goal amount. On the other hand, the effect of reward motivation on funding amount is, on average, positive, although very marginal. Overall, our results provide new insights for theories of contributions in crowd-driven markets

For love or money? The effect of deadline proximity on completion contributions in online crowdfunding

Purpose: The authors investigate whether the individual “completion contributions” that enable online crowdfunding campaigns to meet or exceed their targets tend to be larger in relative terms when made nearer to the funding deadline. As these contributions are likely to have a disproportionate impact upon campaign outcomes, the authors assess whether the investment patterns they observe are consistent with the theory of impact philanthropy. Design/methodology/approach: The authors use campaign-level data incorporating observations on campaigns from reward (both all-or-nothing, AoN and keep-it-all, KiA), donation and equity-based platforms. To the knowledge of the authors, the coverage of the data is unparalleled elsewhere in the crowdfunding literature. Using these data, the authors analyze whether completion contributions tend to vary contingent upon both the proximity of the deadline and form of crowdfunding. Findings: The authors find that completion contributions tend to vary significantly and positively with proximity to funding deadlines. The authors also find that this relationship tends to be more pronounced among AoN than for KiA campaigns, as well as for donation-based platforms compared with equity-based platforms. Altogether, the patterns of behavior observed are consistent with the theory of impact philanthropy. Originality/value: The authors help develop a better understanding of the behaviors of contributors to online crowdfunding campaigns and whether those behaviors are consistent with altruistic motivations. The findings also have considerable value in understanding the non-financial factors associated with the informal financing of business startups

Joining the Crowd:The Impact of Social Information in Crowdfunding Campaigns

Philanthropic crowdfunding is an online funding method with a growing popularity. In this study we quantify the effects of information about the donation behavior of previous donors, also known as social information. We report results from a large natural field experiment among visitors (n = 23,676) of a crowdfunding platform advertising campaigns for artists and nonprofit organizations in the field of arts and culture. Visitors who were exposed to a reminder about the average donation amount of previous donors were not more likely to donate than visitors who were not exposed to this information. Neither did visitors who decided to donate give higher amounts

Informal institutions and Internet-based equity crowdfunding

Equity-based crowdfunding is emerging as an increasingly important source of entrepreneurial financing. This paper examines the effects of informal institutions on entrepreneurs' ability and willingness to engage in efforts to raise equity crowdfunding. It also investigates how informal institutions are linked to investors' response to ECF. Also reviewed are the differences in the effects of informal institutions on equity crowdfunding vis-à-vis other forms of crowdfunding. The paper also delves into factors that are likely to lead to the development of favorable informal institutions from the standpoint of equity crowdfunding. It utilizes inductive theory-building approach

Success of Crowd-Based Online Technology in Fundraising: An Institutional Perspective

The use of crowd-based online technology for raising funds is gaining popularity and credibility. This paper seeks to provide a better understanding of the effects of formal and informal institutions on the success of a crowdfunding project. It also analyzes how the effects of different types of institutions are likely to vary across the four different types of crowdfunding projects: (1) crowdlending, (2) crowdequity, (3) reward-based crowdfunding and (4) donation-based crowdfunding. A practical implication of this work is that the ease with which entrepreneurs and other types of fundraisers can raise money via crowdfunding platforms to fund a project depends upon the nature of formal and informal institutions in the economy. A theory of crowdfunding is proposed that explains these developing relationships

Message (In)Congruence: Tweeting While Competing for Donations

Nonprofit organizations rely on social media to build relationships with their stakeholders and solicit the resources they need to provide their programs and services. This online activity takes place in an increasingly competitive environment. We draw on the situational theory of publics, stakeholder theory, giving motivation, and gamification to examine this question: When organizations engage in competitive philanthropy, what framing is more effective at generating donations on an online platform? We confirm the relationship between tweeting and donation solicitation and shed light on some specific types of messaging associated with increased donations.This study was conducted while the authors were employed at the Paul H. O’Neill School of Public and Environmental Affairs at IUPUI. We are thankful for the collaboration with Brackets for Good. We are also thankful for support from our research assistants Emily Peterson and DeeAndria Hampton. This study was partly funded by grants from IUPUI's Sports Innovation Institute and Indiana University's Lilly Family School of Philanthropy

Financing Decisions and the Role of CSR in Donation-Based Crowdfunding - Evidence from Pakistan and Indonesia

Donation-based crowdfunding and corporate social responsibility (CSR) activities have potential symbiotic ramifications to raise funds, but campaigners are confronted with challenges and competition to accomplish their charitable target. For instance, CSR activities could warrant the possibility of using crowdfunding to raise money. On the other hand, a company\u27s CSR objectives can be achieved by using crowdfunding to micro-fund various social initiatives. Current research investigates the relationship between fundraisers in donation-based crowdfunding activities, which become potential CSR activities. Exclusively, the study analyzes the correlation among the value raised at the end of fundraising activity, the amounts targeted by the fundraiser, and CSR-Type activities on the project\u27s success in donation-based crowdfunding. Based on this, a research taxonomy has been established for a comparative analysis between Pakistan and Indonesia. Secondary data is collected from donation-based platforms and analyzed through Ordinary Least Square (OLS) regression and the models are validated using a robustness check. The outcomes show that a higher value raised (V) correlates more positively with project success in Pakistan (164) as compared with Indonesia (122). The Target fund (T) has a significant and negative association with the project\u27s success in the Pakistani market, however, the significant and negative effect on the project’s success in the Indonesian market. Lastly, CSR-related activities such as education, environment, community, and health have a positive relationship with project success in Pakistan, except for the product which has a negative, however significant relationship. In contrast, for Indonesia, CSR-type activities such as education, environment, community, product, and health have a positive and significant relationship with the project\u27s success. This study contributes to the donation-based crowdfunding literature to develop a vivid understanding of different CSR activities and their impact on the project\u27s success. The current study is one of the first to examine the significance of CSR activities and will enrich the body of knowledge regarding crowdfunding in diverse economies

Why do people patronize donation-based crowdfunding platforms? An activity perspective of critical success factors

As a special type of social information systems, crowdfunding platforms draw researchers’ attention in recent years for their increasing popularity. In supplement to big-data analyses on user-generated content, behavioral research using survey and interview observations provide insights on why people like or hesitate to use such platforms. Nevertheless, extant studies focus on user intention and equity/reward-based projects, leaving the knowledge body on why people actually engage in donation-based crowdfunding underdeveloped. Based on Activity Theory, this study explores the critical success factors of crowdfunding in terms of website acceptance, crowd familiarity, and donation reciprocity. It then develops a research model that adapts relevant constructs from e-commerce and charitable behavior literature to predict user trust and readiness leading to actual donation. To test the hypothesized relationships, a structural equation modeling analysis was conducted on 744 survey responses collected from crowdfunding platform users in multiple countries. Results provide supporting evidence to most hypotheses and reveal the influential factors of technological utilization and social collaboration in the crowdfunding activity

Fast Raising: Digital Fundraising as Interaction Rituals

Twice a year, GamesDoneQuick hosts events that showcase the Speed Running Community, a sub-set of the Video Game Community. Since its inception in 2014 through 2021 GDQ has raised $25.7 million that has been distributed to the Prevent Cancer Foundation and Médecins Sans Frontiers (Doctors without Borders). This collection of studies analyzes the Awesome Games Done Quick 2020 event utilizing the Interaction Ritual Theory framework of Randall Collins to understand how ritualistic social action of this community has been leveraged by event organizers to promote successful crowd funding efforts that benefits organizations outside of the community. Further it expands on research into New Social Movements and Participatory Culture to frame and explain the motivations behind this communal process. This study provides evidence to show that interaction ritual chains are present, but failed to accurately identify the specific characteristics of the sacred objects present to link them to the success of rituals. Additionally, it failed to find a link between perceived identity markers of ritual performers with the amount of donations received at the event studied. Lastly, it takes steps to categorize parts of the social action present in the form of donation incentives and describes how those specific incentive types perform in relation to one another