The Social Network Effect

Abstract

Social networking applications such as Facebook, Twitter, and Crowdrise offer new ways for nonprofits to engage the community in fundraising efforts. This study employs data from Facebook Causes to examine the nature and determinants of charitable giving in social networking environments. Our findings suggest donations on these sites are not driven by the same factors as in “off-line” settings. Instead, a social network effect takes precedence over traditional economic explanations. Facebook donors do not seem to care about efficiency ratios, their donations are typically small, and fundraising success is related not to the organization’s financial capacity but to its “Web capacity.” Moreover, online donors are prone to contribute to certain categories of causes more than others, especially those related to health. Given the growth in social media-driven fundraising—and the increase in crowdfunding, slacktivism, impulse donating, and other new practices this entails—these findings carry notable theoretical and practical implications.

The impacts of fundraising periods and geographic distance on financing music production via crowdfunding in Brazil

“…Although they have not considered the distance of ties between donors and musicians, Mollick (2014) and Zheng et al (2014) identified a positive relationship between the number of social contacts identified on Facebook or other social networks (e.g., Weibo Page, a Chinese social network) with the amount donated and with the musical project's performance. These results are also supported by Saxton and Wang (2014), who found that nonprofit organizations with more Facebook fans receive more donations, and by Colombo et al (2015), who found that greater numbers of contacts on Linkedin were associated with both the number of supporters and the volume of capital raised in 669 projects on the Kickstarter platform.…”

“…Thus, it is expected that the investors who are not socially connected to the entrepreneurs tend to take longer amounts to donate than others. Nevertheless, donors with close ties to the musicians tend to donate larger amounts (Saxton and Wang 2014). Given the above reasons, we believe that the greater the exposure time of the project is, the greater the value of the donations will be.…”

“…Crowdfunding in the music industry cannot be seen only as an intermediary agent, as it is also the locus where social connections between fans and musicians occur (Zheng et al 2014;Colombo et al 2015). These fans do not just invest in the project of a singer or a band: They are meeting the request of people who are part of their social network (Saxton and Wang 2014) or are feeling motivated to act prosocially (Ariely et al 2009). For these reasons, we advocate that the mechanisms inherent in the social capital of musicians and the behavioral aspects of donors simultaneously affect the relationship between the geographic distance and the value of a pledge.…”

“…It is normally enabled through the internet by means of social media (Lehner 2013), and it allows entrepreneurs to reach geographically dispersed people around the globe who are willing to support the project (Saxton and Wang 2014). Crowdfunding has been described as the accumulation of small investments in individual projects by a large number of individuals who are supported by a platform (Royal and Windsor 2014).…”

Monitoring Twitter strategies to discover resonating topics: The case of the UNDP

“…A survey of Italians tweeting about elections found a connection between getting more information from Twitter and participating more in the elections, although no cause and effect relationship was established (Vaccari et al, 2015). Similarly, social media strategies can be successful at eliciting small donations, especially for health organizations Wang, 2014).…”