Externalities in Charitable Crowdfunding

Abstract

This study examines how the existence of multiple charitable campaigns supporting similar causes on the same platform influence the donations received by each campaign. The existence of multiple campaigns supporting similar causes can have negative externalities as they compete for donors. However, the existence of additional campaigns can also result in positive externalities as potential donors benefit from a larger variety of projects to choose from. This study observes negative and positive externalities from the existence of multiple campaigns supporting similar causes. An increase in the number of campaigns leads to a decrease in the average donation received by each campaign, indicating that the additional campaigns do not necessarily expand the market. However, when some of the campaigns perform exceptionally well, other campaigns-including non-top performing campaigns-receive more donation, highlighting the market expansion effect of the presence of successful campaigns on a platform.

Investigating the determinants of medical crowdfunding performance: a signaling theory perspective

“…First, both funding goal and funding duration have a U-shaped relationship with crowdfunding performance, suggesting that donors rely on funding information signals to make funding-related decisions. Contrary to previous studies that identify a positive or negative linear relationship between funding goal/duration and crowdfunding performance in the general crowdfunding context (Bukhari et al, 2020;Lee and Park, 2019;Sulaeman and Lin, 2018), our empirical findings indicate a nonlinear relationship in the medical crowdfunding context.…”

“…Although previous studies identify the significant effects of funding goal and funding duration on crowdfunding performance, the findings are inconsistent. In the context of general crowdfunding, some studies have found that funding goal and funding duration have negative effects on the success of funding (Bukhari et al, 2020), whereas other studies have reported that funding goal (Sulaeman and Lin, 2018) and funding duration (Lee and Park, 2019) have positive effects on funding success. Our study provides a possible explanation for the mixed findings by proposing nonlinear effects of funding goal and duration on crowdfunding performance and providing empirical evidence that funding goal and duration have U-shaped relationships with medical crowdfunding performance.…”

Struggling, helping and adapting: Crowdfunding motivations and outcomes during the early US COVID‐19 pandemic

“…Particularly popular or successful campaigns are difficult to anonymise entirely due to media coverage and spread; in these cases, we only share details pertinent to the research. Previous research has found that campaigns with stronger writing and fewer grammatical errors receive more donations (Sulaeman & Lin, 2018). Consequently, in reporting direct quotes from campaign pages, we have retained, as much as possible, the syntax, punctuation and even grammatical and spelling errors of the original text.…”

The Influence of Signals on Donation Crowdfunding Campaign Success during COVID-19 Crisis

“…Drawing from a large dataset of Kickstarter projects, the existence of spelling errors can also decrease the chances of success by 13% [ 23 ]. Sulaeman and Lin [ 51 ] showed that fewer spelling errors on charitable fundraising campaigns lead to more donors contributing and a higher total amount of donations. According to GoFundMe [ 47 ], since most of the crowd uses online searches for keywords to find a cause to support, spelling is a critical element for Google’s algorithm screening process to precisely detect your campaign to give the most relevant answers to the people query.…”