The Unanticipated Dynamics of Promoting Crowdfunding Donation Campaigns on Social Media

Abstract

Crowdfunding is an online method of fundraising from a large audience. Digital Word of Mouth (DWOM) via social media has become a popular promotion platform for crowdfunding campaigns due to its negligible nominal cost. While one may expect that promoting these campaigns on social media may steadily increase donations, the exact dynamics of such promotions have not been studied for donation-based crowdfunding. We collect panel data on several unique donation campaigns from a major donation-based crowdfunding website (gofundme.com) and analyze them employing a variety of econometric techniques. We specifically provide empirical evidence that promoting crowdfunded charitable campaigns using social media follows three phases throughout a campaign's lifecycle. Our results indicate that the general pattern of behavior is the same for charitable campaigns as it is for reward-based campaigns. This suggests that the psychological motives outlined in the literature are important for both types of campaigns. Because the economic motives are not present, this finding would not be clearly anticipated. We show that the contributing role of social media in a campaign's success varies over time and that it is most helpful in the first ten days of initiating a campaign. We also provide preliminary evidence that promoting charitable campaigns on social media can lead to slacktivism, an unexpected consequence of using social media as a promotion tool resulting in less donations and more social media flurry. We also find that if a campaign does not reach at least 70 percent of its goal after twenty days since launch, it is not likely to be successful. Fundraisers and charitable marketers can use our findings in gauging the effectiveness of raising awareness about their campaigns in the online world. They could also streamline the timing of social media promotions to enhance their impact on collecting donations for charitable causes.

The contribution of crowdfunding for philanthropy: A systematic review and framework of donation and reward crowdfunding

“…The network impact is more present at the beginning and end of a campaign (Borst et al, 2018) since early contributions of “family and friends” are later replaced by loyal backers who care more about the content of the project than the creator (Skirnevskiy et al, 2017). This connects to the finding that social media is most effective at a campaign's beginning (Dehdashti et al, 2022), since with soliciting close ties, social media platforms play an essential role, with Facebook being the leading media platform from the start (Hekman & Brussee, 2013; Hong et al, 2015), and to this day (Van Teunenbroek & Hasanefendic, 2022). Researchers explain that Twitter focuses on objective information and quality signals, while Facebook focuses on supporting connections and social norms.…”

“…The network impact is more present at the beginning and end of a campaign (Borst et al, 2018) since early contributions of "family and friends" are later replaced by loyal backers who care more about the content of the project than the creator (Skirnevskiy et al, 2017). This connects to the finding that social media is most effective at a campaign's beginning (Dehdashti et al, 2022) creator is important (Cicchiello et al, 2022) and often happens within the platform via comments and updates.…”

Researching the crowd: Implications on philanthropic crowdfunding and donor characteristics during a pandemic

“…This highlights a key methodological contribution this study, considering that the majority of the existing research studied crowdfunding via data scraping (Nielsen & Binder, 2021; Polzin et al, 2018), often focusing on data from the Kickstarter platform (Kunz et al, 2016). In addition, earlier studies focused primarily on one platform at a time (e.g., André et al, 2017; Dehdashti et al, 2022; Gleasure & Feller, 2016; Greenberg & Mollick, 2015; Kim et al, 2022), even though the difference between crowdfunding platforms is substantial (Belleflamme et al, 2015). We make up for this by including a large sample of random individuals not connected to a platform.…”

The more the better? The negative effect of disseminators' donations in online donation

“…Second, our research also contributes to the literature concerning herding behavior. Previous research indicates that the herding effect is also observed in cases of charity, in which individuals tend to follow others' behavior (Dehdashti et al, 2022), especially those exhibited by their friends (Bekkers & Wiepking, 2011;Meer, 2011).…”