Prosocial Goal Pursuit in Crowdfunding: Evidence from Kickstarter

Abstract

In reward-based crowdfunding, creators of entrepreneurial projects solicit capital from potential consumers to reach a funding goal and offer future products/services in return. The authors examine consumers’ contribution patterns using a novel data set of 28,591 projects collected at 30-minute resolution from Kickstarter. Extending prior research that assumes that economic considerations (e.g., project quality, campaign success likelihood) drive backers’ decisions, the authors provide the cleanest field evidence so far that consumers also have prosocial motives to help creators reach their funding goals. They find that projects collect funding faster right before (vs. right after) meeting their funding goals because consumers not only are more likely to fund projects but also contribute greater amounts of money prior to goal attainment. This effect is amplified when the nature of a project tends to evoke consumers’ prosocial motivation and when a project’s creator is a single person. These results suggest that consumers’ prosocial motives not only play a role in reward-based crowdfunding but also can outweigh the opposing effects of economic factors including rational herding and certainty about campaign success.

Making the World a Better Place: How Crowdfunding Increases Consumer Demand for Social-Good Products

“…The current research also builds on previous literature that considers psychological motivations underlying crowdfunding (Kuppuswamy and Bayus 2017; Zvilichovsky, Danzinger, and Steinhart 2018) highlighting that prosocial motivations need not necessarily exist prior to the decision to crowdfund to have impact but in fact may emerge as a function of the transaction itself. Thus while literature demonstrates that crowdfunding participants are motivated by their potential impact to make a product happen (i.e., helping bring projects into the world that otherwise would not exist; Dai and Zhang 2019; Kuppuswamy and Bayus 2017; Zvilichovsky, Danzinger, and Steinhart 2018), we suggest that our construal-level account enhances our understanding about which product a consumer might more strongly want to help develop.…”

“…Our theorizing is consistent with literature demonstrating that an interdependent (vs. independent) self-construal leads to greater cooperation (Utz 2004), engagement in corporate social responsibility initiatives (Simpson, Robertson, and White 2019), and willingness to support prosocial causes (Vaidyanathan, Aggarwal, and Kozlowski 2013). Moreover, research on lending-based crowdfunding on Kiva suggests that lenders are influenced by prosocial elements such as narratives framed as an opportunity to help others (Allison et al 2015; Dai and Zhang 2019). More specific to reward-based crowdfunding, Kickstarter projects with a sustainability orientation (Calic and Mosakowski 2016) or use of prosocial words (Pietraszkiewicz, Soppe, and Formanowicz 2017) demonstrate a higher funding likelihood.…”

“…That is, we propose that the type of transaction (crowdfunding vs. purchase) can lead consumers to prefer qualitatively different types of products. This makes a contribution to existing work in the crowdfunding domain that largely examines behaviors within crowdfunding (e.g., Dai and Zhang 2019; Kuppuswamy and Bayus 2017; Zvilichovsky, Danziger, and Steinhart 2018). Critically, the current findings cannot be attributed to self-selection such that certain segments of consumers are more strongly drawn to crowdfunding platforms.…”

The Journal of Marketing Research Today: Spanning the Domains of Marketing Scholarship

“…In their article, Gershon, Cryder, and John (2020) use a combination of field experiments and lab experiments to show that consumers are significantly more likely to recommend a product or service to someone else if that person also receives an incentive for taking action. Dai and Zhang (2019) use data from Kickstarter to show that, beyond economic considerations, consumers are motivated to contribute to crowdfunding campaigns by a desire to help others achieve their funding goals. From the marketer’s perspective, evidence suggests that both the structure and framing of prosocial requests matter.…”

Research on the Effects of Information Description on Crowdfunding Success within a Sustainable Economy—The Perspective of Information Communication

“…First, the creators-related factors are important influencers for crowdfunding success, including creators' experience and expertise [12][13][14], group size and composition [14][15][16], social capital [13,[17][18][19][20], and human capital [2,21]. Second, the projects' internal characteristics and related outcomes, such as the goal [16,22], duration [16,22,23], category [24][25][26][27], rewards [16,22,23,28], have also been verified as antecedents that may affect the crowdfunding success. Finally, how the information of the projects is presented, namely the project's information description, has further been noted as an impactor that must be considered.…”