The Science of Philanthropy in Crowdfunding. René Bekkers Philanthropic Studies VU University Amsterdam

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Marshall Moody
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1 The Science of Philanthropy in Crowdfunding René Bekkers Philanthropic Studies VU University Amsterdam

2 Philanthropic Studies x

3 Number of publications per year on philanthropy in various disciplines (empirical studies on determinants of giving, ) May 27,

4 Why do people give? People give more (often) when 1. There is a clear need need 2. They are being asked solicitation 3. Costs are lower, and benefits are higher costs/benefits 4. They care about the recipients altruism 5. They receive social benefits reputation 6. They receive psychological benefits self-rewards 7. The cause matches their values values 8. Donations are perceived to be efficient efficacy Source: 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): Available at

5 Why do people give? HERE IS THE CROWD People give more (often) when 1. There is a clear need need 2. They are being asked solicitation 3. Costs are lower, and benefits are higher costs/benefits 4. They care about the recipients altruism 5. They receive social benefits reputation 6. They receive psychological benefits self-rewards 7. The cause matches their values values 8. Donations are perceived to be efficient efficacy AND HERE

6 Giving in the Netherlands 2011 Amounts donated in million Households 498 Corporations Bequests Lotteries Foundations 1378 Crowdfunding Source: Schuyt, T., Gouwenberg, B.M. & Bekkers, R. (2013). Geven in Nederland Amsterdam: Reed Business.

7 What works in crowdfunding? Raising funds online for specific projects shares important commonalities with offline fundraising. What makes people give online is similar to what makes them give offline. Philanthropic crowdfunding also benefits from offline work to create the buzz.

8 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.

9 Who s watching? % donating 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% base donated 0 donated 5 donated 10 9

10 The power of suggestion

11 Ten Trends in Philanthropy Events Bequests Less loyalty Local causes Mega-donors Crowding-out Declining confidence Corporate volunteering Transparancy and Impact DIY Philanthropy with crowdfunding

12 Giving to Voor de Kunst projects We analyzed donations to projects advertised on Voor de Kunst (Jan-June 13) per day. We selected 5 successful and 5 unsuccessful projects. 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

13 Cases Failed projects Success rate Succesful projects Success rate Een wereld vol 5% Bongomatik 100% licht It s not easy to be a 15% Ctr+N 102% borderliner Arthur en de strijd 22% Wladiwostok 103% om Camelot Het liep voorbij 80% Corso Zundert 108% Sean Bergin 81% De Tostifabriek 125%

14 Number of donations per day

15 Amount donated per day

16 Amount donated by tie strength SELF STRONG WEAK LATENT

17 Tie strength per day 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% LATENT WEAK STRONG SELF

18 Tie strength per day 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% WEAK STRONG 3 day moving average

19 Amount donated per day by social media use Facebook Project updates Twitter

20 Social media activity FB updates Tweets

21 Tweets and donations Tweets #donations

22 Deviations from the average 3,0 2,5 2,0 1,5 1,0 Tweets #donations amount 0,5 0,

23 Deviations from the average 3,0 2,5 2,0 1,5 1,0 0,5 0, Tweets amount

24 Open questions Timing Contents Reach Directed

25 Contact Geven in Nederland, Filantropische studies, Faculteit Sociale Wetenschappen, Vrije Universiteit Amsterdam: René Bekkers, Blog: renebekkers.wordpress.com

Geven in Nederland 2007

Geven in Nederland 2007 Geven in Nederland 2007. Giften, legaten, sponsoring en vrijwilligerswerk. Prof. Dr. Th.N.M. Schuyt, drs. B.M. Gouwenberg, dr. R.H.F.P. Bekkers, dr. M.M. Meijer, drs. P. Wiepking