the science of philanthropy in crowdfunding
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The Science of Philanthropy in Crowdfunding. René Bekkers Philanthropic Studies VU University Amsterdam. IF Science for Society. - PowerPoint PPT PresentationTRANSCRIPT
IF Science for Society 1
The Science of Philanthropy
in Crowdfunding
René BekkersPhilanthropic Studies
VU University Amsterdam
2 October 2014
IF Science for Society 2
IF Science for Society
• IF heeft het laagdrempelig delen van kennis hoog in het vaandel staan. Hoe kunnen we de kennis die wordt verzameld aan Nederlandse universiteiten inzetten bij goededoelenorganisaties? In een serie lezingen gezamenlijk georganiseerd door de VU, RSM en het IF vertalen de onderzoekers - in samenwerking met ervaren professionals - hun resultaten naar de dagelijkse praktijk.
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IF Science for Society
PAO Philanthropic Studies
• Module 1: Introductie in de filantropiewetenschap
• Module 2: Geschiedenis en filosofie van de filantropie
• Module 3: Management en marketing van Maatschappelijke Organisaties
• Module 4: Financiering en Beleggen• Module 5: Evalueren• Module 6: Juridische aspecten
…een prachtprogramma sinds 20012 October 2014 3
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Philanthropic Studies
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Tota
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ctivity in th
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Number of publications per year on philanthropy in various disciplines (empirical studies on determinants of giving, 1899-2005)
72 October 2014
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Why do people give?
People give more (often) when1. There is a clear need need2. They are being asked solicitation3. Costs are lower, and benefits are higher
costs/benefits4. They care about the recipients altruism5. They receive social benefits reputation6. They receive psychological benefits self-rewards7. The cause matches their values values8. Donations are perceived to be efficient efficacySource: Bekkers, R. & Wiepking, P. (2011). ‘A Literature Review of Empirical Studies
of Philanthropy: Eight Mechanisms that Drive Charitable Giving’. Nonprofit and Voluntary Sector Quarterly, 40(5): 924-973. Available at www.understandingphilanthropy.com
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Ten Trends in Philanthropy
EventsBequests
Less loyaltyLocal causesMega-donorsCrowding-out
Declining confidenceCorporate volunteering
Transparancy and ImpactDIY Philanthropy with crowdfunding
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961
?
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Giving in the Netherlands 2011
1829
1378
539
498
294
5
Households
Corporations
Bequests
Lotteries
Foundations
Crowdfunding
Amounts donated in € million
Source: Schuyt, T., Gouwenberg, B.M. & Bekkers, R. (2013). Geven in Nederland 2013. Amsterdam: Reed Business.
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What can you do?
• To increase the success of online fundraising campaigns?
• 5 tips at voordekunst.wordpress.com: (1) sell creatively; (2) be concrete; (3) be personal; (4) tell a story; (5) invest in relationships
• Pitfall: fundraising without a specific project for a specific audience
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Charity vs crowdfunding
• Charitable causes address practically infinite needs, like poverty, illnesses, biodiversity, human rights.
• Crowdfunding is about raising money for a specific, finite project or product.
• Charitable causes can use crowdfunding as a fundraising strategy, but should first consider carefully what project can be done with the crowd.
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….en tijd.
Veel tijd.
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Online vs offline giving
• Raising funds online for specific projects shares important commonalities with offline fundraising.
• The mechanisms that make people give online are similar to those that make them give offline.
• Philanthropic crowdfunding also benefits from offline work to get the buzz going.
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Why do people give?
People give more (often) when1. They know there is a clear need need2. They are being asked solicitation3. Costs are lower, and benefits are higher
costs/benefits4. They care about the recipients altruism5. They receive social benefits reputation6. They receive psychological benefits self-rewards7. The cause matches their values values8. Donations are perceived to be efficient efficacy
NOT ENOUGH
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Why do people give?
People give more (often) when1. There is a clear need need2. They are being asked solicitation3. Costs are lower, and benefits are higher
costs/benefits4. They care about the recipients altruism5. They receive social benefits reputation6. They receive psychological benefits self-rewards7. The cause matches their values values8. Donations are perceived to be efficient efficacy
YOU NEED TO GET TO THE CROWD
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Make the Ask
• Creating a crowdfunding project webpage is not enough to raise awareness or funds.
• If you don’t ask, you don’t get.• Tools that you can use: face-to-face
requests, local newspapers, events, tweets, Facebook pages, TV appearances
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Unique opportunities
• Online fundraising provides excellent opportunities to use mechanisms that are more difficult to use in offline contexts.
• Online platforms enable testing ‘nudges’ and ‘tweaks’ that use these mechanisms.
• My advice?• Do try this at home!2 October 2014
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A/B + = TLA + RCT
• TLA: TEST, LEARN, ADAPT.• RCT: Randomized Control Trial.• Design interventions based on
mechanisms that make people give.• Randomly assign interventions in a
A/B test.
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Why do people give?
People give more (often) when1. There is a clear need need2. They are being asked solicitation3. Costs are lower, benefits are higher costs/benefits4. They care about the recipients altruism5. They receive social benefits reputation6. They receive psychological benefits self-rewards7. The cause matches their values values8. Donations are perceived to be efficient efficacy
INCENTIVES
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Crafting incentive schemes
• Rewards get higher along the donor pyramid.
• Receiving a reward should be optional rather than the default.
• This saves you money and gives the donor the joy of getting something through an active choice.
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Why do people give?
People give more (often) when1. There is a clear need need2. They are being asked solicitation3. Costs are lower, and benefits are higher
costs/benefits4. They care about the recipients altruism5. They receive social benefits reputation6. They receive psychological benefits self-rewards7. The cause matches their values values8. Donations are perceived to be efficient efficacyAND HERE
HERE IS THE CROWD
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Social influence
• Knowing that others are giving…Creates a feeling of belonging.Creates a social norm: it is good to give.Creates trustworthiness: others trust
this.
• Letting others know you are giving…Gives you / maintains a reputation.Creates an obligation – sparks
reciprocity.
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Who’s watching?
base0%
10%20%30%40%50%60%70%80%90%
100%
7460 61
19
24 18
717 18
donated 0 donated 5
% d
on
ati
ng
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The power of suggestion
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Framing price reductions as matches
no re
duct
ion
(full
price)
33%
reba
te (p
rice=
0.67
)
50%
mat
ch (p
rice=
0.67
)
50%
reba
te (p
rice=
0.50
)
100%
mat
ch (p
rice=
0.50
)0
20
40
60
donates proportion of reward donated
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Matching more does not help
no reduction (full price)
100% match (price=0.50)
200% match 300% match0
0.51
1.52
2.53
3.54
4.55
Response
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Matching more does not help
no reduction (full price)
100% match (price=0.50)
200% match 300% match0
20
40
60
80
100
120
Amount donated per letter sent out Amount received per donation
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Seed money: target $3,000
10% 33% 67%0
200
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1400
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2000
No refund Refund
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Match or seed money: target $5,000
0% 50% match 50% seed $2,500 target0
200
400
600
800
1000
1200
1400
1600
1800
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Conditional matching
http://advanced-hindsight.com/2014/08/28/the-power-of-matching-donations/
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Conditional matching
Control match at 50% match at 75% match at 100%0
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60
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Statistical victims
• “The death of a single Russion soldier is a tragedy. A million deaths is a statistic.” (Stalin)
• George Loewenstein: the story of one person raises more than the awareness about a thousand victims.
• Hope for a better world, one person at a time.• Use pictures: with watching eyes.• Use videos: footage says more than a 1,000
words.
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Similarity
• Galak, Small & Stephen (JMR, 2011):• KIVA lenders favor individual
borrowers over groups or consortia of borrowers (identifiable victim effect).
• Lenders prefer to give to those who are more like themselves in terms of gender, occupation, and first name initial.
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Giving to ‘Voor de Kunst’ projects
• Irma Borst selected 5 successful and 5 unsuccessful projects on ‘Voor de Kunst’ (Jan-June 13).
• We analyzed donations to projects per day.• Social media activity: (#tweets and
#facebook updates)• Individual donations are aggregated per day.• Initiators were interviewed to identify the
type of relationship with each donor.• PRELIMINARY RESULTS…
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Cases Failed projects
Success rate Succesful projects
Success rate
Een wereld vol licht
5% Bongomatik 100%
It’s not easy to be a borderliner
15% Ctr+N 102%
Arthur en de strijd om Camelot
22% Wladiwostok 103%
Het liep voorbij 80% Corso Zundert 108%
Sean Bergin 81% De Tostifabriek 125%
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Number of donations per day
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 490
5
10
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20
25
30
35
40
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Amount donated per day
1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 490
50
100
150
200
250
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Amount donated by tie strength
LATENT WEAK STRONG54
56
58
60
62
64
66
68
62
59
67
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Amount donated per day by online media use
None Project updates
Facebook Twitter0
10
20
30
40
50
60
70
31
48
5861
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Contact
• ‘Geven in Nederland’, Filantropische studies, Faculteit Sociale Wetenschappen, Vrije Universiteit Amsterdam: www.geveninnederland.nl
• René Bekkers, [email protected]• Blog: renebekkers.wordpress.com• Twitter: @renebekkers
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