Effects of the Price of Charitable Giving: Evidence from an Online Crowdfunding Platform

Meer, Jonathan

doi:10.3386/w19082

Cited by 11 publications

(12 citation statements)

References 11 publications

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“…It seems evident that the decades-long emphasis on overhead costs as a metric of quality has had an impact on donor behavior: academic research suggests that donors tend to be quite sensitive to administrative costs [2], even when these costs have no relationship to the quality of the charity [3]. This latter finding is based on data from an online giving platform.…”

Section: Do Donors Care About Overhead Costs?mentioning

confidence: 89%

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Are overhead costs a good guide for charitable giving?

Meer¹

2017

izawol

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The overhead cost ratio is the most commonly used metric to rank charities. However, for most charities, it is a crude measure that does not adequately evaluate their effectiveness. Despite the fact that broader measures of impact are far more meaningful, donors exhibit strong distaste for high administrative costs. Excess focus on these costs can lead charities to underinvest in crucial operating infrastructure, especially skilled workers, thereby diminishing their ability to deliver services. Policymakers should avoid these simplified measures, striving instead to utilize better impact metrics, despite their enhanced complexity and costs. ConsDonors' focus on overhead costs can lead to counterproductive outcomes for charities, such as underinvestment in staff and administrative support, which hamper their effectiveness. Measuring the quality or effectiveness of a charity can be difficult, and overhead cost ratios are often a poor metric for judging a charity. Imposing legal regulations to limit overhead costs can create large burdens for charities. Charities can find it difficult to compete for skilled labor due to donors' and regulators' desire to minimize overhead costs. Are overhead costs a good guide for charitable giving?Donors rely on overhead costs to evaluate charities, but that reliance creates disincentives for charities to hire skilled workers

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Section: Do Donors Care About Overhead Costs?mentioning

confidence: 89%

“…Previous work of the author contains a larger number of background references for the material presented here and has been used intensively in all major parts of this article [3], [6].…”

Section: Acknowledgmentsmentioning

confidence: 99%

Are overhead costs a good guide for charitable giving?

Meer¹

2017

izawol

Self Cite

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“…In addition, these connected campaigns may be similar to the focal campaign and may compete for the limited resources the donors have. As a result, the likelihood of the success for each campaign would be lowered due to the fact that increased competition reduces crowdfunding campaign success [41,42]. As a result, we expect that more strong ties in the donor-based campaign networks would negatively influence campaign success.…”

Section: Social Network On Fundlymentioning

confidence: 99%

Effects of Donor- and Supporter-Based Campaign Networks on Crowdfunding Campaign Success

Wang¹,

Osatuyi²,

Hou³

2017

Proceedings of the 50th Hawaii International Conference on System Sciences (2017)

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“…Earlier studies on Internet-based entrepreneurial finance have mainly focused on donation-based crowdfunding (Bøg, Harmgart, Huck, and Jeffers, 2012;Burtch, Ghose, and Wattal, 2013;Meer, 2014;Koning and Model, 2013;Saxton and Wang, 2013;Smith, Windmeijer, and Wright, 2012), reward-based crowdfunding (Agrawal, Catalini and Goldfarb, 2013;Belleflamme, Lambert, and Schwienbacher, 2014;Colombo, Franzoni, and Rossi-Lamastra, 2015;Kuppuswamy and Bayus, 2014;Marom and Sade, 2013;Mollick, 2013;Mollick, 2014;Younkin and Kashkooli, 2013;Zvilichkovsky, Inbar, and Barzilay, 2013), and crowdlending (Burtch, Ghose, and Wattal, 2014;Herzenstein, Dholakia, and Andrews, 2011a;Herzenstein, Sonenshein, and Dholakia, 2011b;Hildebrand, Puri, and Rocholl, 2014;Lin and Viswanathan, 2013;Lin, Prabhala, andViswanathan, 2012, Ly andMason, 2012a;Ly and Mason, 2012b;Pope and Sydnor, 2011;Ravina, 2012;Zhang and Liu, 2012).…”

Section: Introductionmentioning

confidence: 99%

Pricing the Value of Cash Flow Rights in Crowdinvesting: An Analysis of Innovestment Backers

Hornuf

Neuenkirch

2015

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. other European crowdinvesting portals, Innovestment is running a multiunit sealed bid second price auction where backers can specify the price they are willing to pay for an investment ticket with the portal and startup specifying a lower threshold. We exploit this unique auction mechanism to analyze backers' willingness to pay for cash flow rights in a startup company. We find that campaign characteristics, investor sophistication, progress in funding, herding, and stock market volatility influence backers' willingness to pay in an economically meaningful fashion, whereas we do not find any evidence for a local bias or sniping at the end of an auction. Our findings indicate that portal design and self-regulation might well trump government rules in the pursuit to protect investors. Terms of use: Documents in

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Effects of the Price of Charitable Giving: Evidence from an Online Crowdfunding Platform

Cited by 11 publications

References 11 publications

Are overhead costs a good guide for charitable giving?

Are overhead costs a good guide for charitable giving?

Effects of Donor- and Supporter-Based Campaign Networks on Crowdfunding Campaign Success

Pricing the Value of Cash Flow Rights in Crowdinvesting: An Analysis of Innovestment Backers

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