Which Stories Convince Donors? an Analysis of Donation-Based Crowdfunding Projects for Charities

Background and Purpose: Despite its recent rise in popularity, crowdfunding has not yet been widely utilized in the social work field. While traditional forms of fundraising often leave people without detailed information about how their donated money is used and may result in doubts about the integrity of charitable organizations, donation-based crowdfunding efforts disclose such facts before donors donate, enabling people to donate with confidence after reviewing all given information. Additionally, due to its low operating costs and ability to quickly reach wide audiences electronically, crowdfunding can become a potentially useful tool for charities’ fundraising. This study aims to provide understanding for successful charity fundraising through donation-based crowdfunding by investigating crowdfunding project pages. Based on an information processing theory, Heuristic-Systematic Model, the study specifically focuses on heuristic and systematic processing-related factors in each project page.

Methods: Data were collected from the contents of project pages at the most representative charity crowdfunding platform in South Korea, Naver Happybean, in order to explore how each factor affects successful funding. The subject of the study is all social work projects that started and finished between July 1st and December 31st, 2016, 639 projects of which are included in the final analysis. Variables were measured by content analysis. The independent variables are divided into heuristic processing-related, including ‘emotional impression of title’ (responsibility, guiltiness, urgency) and ‘visual information’, and systematic processing-related, including ‘message topic’ and ‘message quality’ (believability, ease of understanding, completeness). Since measuring ‘emotional impression of title’ and ‘message quality’ requires individual judgment, these were coded by four coders and secured with inter-coder reliability. Control variables include ‘project goal’, ‘funding duration’, ‘domestic issue’, and ‘beneficiary’. The dependent variable is ‘funding level’, measured by the ratio of funds raised to project goal. The research model was analyzed using a generalized linear model, with a significance threshold of .05.

Results: The study finds that a more guilt-inducing title, more visual information, and a message that is more believable and easier to understand are related with a higher probability of crowdfunding success. Also, when the message is about sponsoring medical treatment and providing cash, goods and service for basic needs (e.g. food, clothing, housing), the probability of crowdfunding success becomes higher. Additionally, when a project targets domestic issues and the beneficiaries are children or adolescents, the funding level significantly increases. Conversely, a higher funding goal and longer funding duration slightly decrease the odds of funding success.

Conclusions and Implications: The findings highlight that crowdfunding for social work purposes should pay attention not only to intuitive factors such as an guilt-inducing title and visual information, but also to factors like message quality including believability and comprehensibility. They also identify specific issues that are more likely to be successful in the crowdfunding, which can encourage charities regarding which issues to try crowdfunding with as a fundraising technique. Charities’ donation-based crowdfunding has not yet been studied extensively worldwide, but considering the successful example of the South Korean platform, its potential should not be overlooked.