I am often asked about the opportunity of crowdfunding to fund scientific projects. Is it of any use? Isn’t it insignificant, meaning that the amounts assembled are too small. In my opinion crowdfunding should not be overlooked and is has its opportunities. Is it a savior? No it is not, but what is? Well, not a lot is known about crowdfunding for science. Therefore, I will focus on rational thinking to build a case for or against crowdfunding. Below we will consider the general motives to give and argue if these fit with what crowdfunding has to give.
Online is the new door-to-door
Crowdfunding takes place online: the funds are raised on a crowdfunding platform. A crowdfunding platform is a site that hosts crowdfunding projects. There are many crowdfunding platforms, some specialized especially in funding science projects like Experiment. The online context could be an advantage, since a lot of people these days spend at least an hour on the net. The mechanisms that motivate people to make a donation in an online context are similar to those that make them offline.
Why do people give?
A recent study identified six mechanisms that drive giving (Konrath & Handy, 2018), I have summarized their findings and the meaning of each motive in the table below:
|People give more (often) when (Konrath & Handy, 2018)|
|1||Increased impact of donations||Trust|
|2||They care about the recipient||Altruism|
|3||Can use it to make friends or family happy||Social|
|4||They perceive (psychological) benefits||Tax benefits|
|5||Improve reputation, conform to norms||Egoism|
|6||When they cannot financially afford it||Constraints*|
The first three mechanisms can be considered as other-oriented. This means that individuals who are mainly motivated by (one) of the first three motives donate mostly because they care about others. The other three motives are more self-oriented. This means that individuals motivated by the last three are mainly motivated by increasing private benefits, instead of public benefits.
If we consider these mechanism how do they apply to crowdfunding? We will discuss them one by one, starting with trust. The study found that donors are more likely to make a donation if they feel like they can trust the organization behind it. In general, the positive towards philanthropic organizations is not too positive. However, crowdfunding is for everyone; you do not have to be connected to a formal company/organization in order to raise funds through crowdfunding. A positive image of the fundraiser is an important aspect of trust.
Crowdfunding has a transparent nature, a fundraiser has to be specific about what they want to achieve with the money. This way a donor has more information about what is being done with the information. This way a donor check if there money was wasted. This is an important point, since donors state that if they have the feeling that much of the money donated to charities is wasted, they won’t make a donation. The transparent nature of crowdfunding could facilitate giving by providing a higher level of trust.
Someone motivated by altruism donated because they feel compassion towards the people in need. The people in need can be the fundraiser (as this is an individual in need of money), but also the individuals for whom the money is assembled. Other reasons why altruistic individuals give is because they are of the opinion that people should be willing to help others who are less fortunate. These individuals give because they are concerned about those less fortunate than themselves, and not for a material reward.
It could be that crowdfunding is less appealing to those who give from a purely altruistic motive, since crowdfunding is connected with material rewards. If you make a donation to a crowdfunding project you can choose to collect a reward. However, it is exactly that: you can choose to pick a reward, you can also reject the reward and still give. Thus, crowdfunding can be just as altruistic as other funding mechanism, but, it can give individuals the impression that it is not.
The social construct refers to individuals making a donation because others are doing it too. In other words, giving can set a norm and some individuals prefer to follow this norm and give as well. If you follow a social norm and adjust your behavior according to this norm, we call this conforming. Another social aspect is that giving is good for one’s reputation: givers are often held in high regard (Bekkes & Wiepking, 2011).
Crowdfunding can actually be more social than other funding forms. The social information (donation amount of others, which rewards they picked, the number of donors) on a crowdfunding platform make it easier for donors to follow the norm. For instance, most platforms show the average donation amount of previous donors. Based on my own research I can tell you that donors donate higher amounts if the average donation amount is visible ARTICLE: Follow the crowd (van Teunenbroek & Bekkers).
Some donors donate because giving can provide them with a tax credit. This way, giving to charities can enable individuals to reduce their income taxes. This is a purely self-oriented motive: increase the private benefits.
Giving to a crowdfunding project does not provide a higher tax credit than other types of giving. It is unlikely that donors who care about tax benefits are more attracted to crowdfunding than other mechanism based solely on the tax benefit mechanism.
Another aspect is that giving is good for one’s reputation: givers are often held in high regard (Bekkes & Wiepking, 2011). Another aspect connected with the egoism mechanism is that a donor donated because it makes him/her feel needed.
Crowdfunding makes it pretty easy for an individual to share their donation (amounts) and therefore receive recognition. Also, you can choose to show your donation amount with your name on the platform, again reputation.
In terms of the feeling needed, crowdfunding can make you feel pretty powerful. The specific nature of crowdfunding shows a donor exactly what he/she achieved by making a donation. Instead of donating to a general cause (scientific research), a donor now donates to a specific project (fund a field trip to collect field data).
Some individuals are simply not financially able to make a donation. If a donation provides too much of a financial strain on them, they are likely to pass. The minimum donation amount at a crowdfunding platform is often above ten euros. This could result in a higher constraint for some individuals if you compare it to the 50 cent donation at a door-to-door collection.
We are motivated to support crowdfunding projects
If we consider the motives to give, as described above, I think that crowdfunding is pretty attractive. It provides a donor with the needed trust through it’s transparent nature. Also, it gives clear social norms which make it easier to decide on for instance a donation amount. For the more egocentric motives it provides the opportunity to easily share one’s donation (amount) and receive recognition. It is just as altruistic as other forms. On the other hand, it might set a higher threshold, since the minimum donation is often 10 euros. It does not provide a higher tax credit. In sum, crowdfunding provides excellent opportunities to use the giving mechanism that are less present in an offline context: trust, social and egocentric.
Based on the motives we would expect crowdfunding to work. So far so good, but will it work for science? If we think about the same motives that make crowdfunding attractive is there any reason to assume this is different for scientific crowdfunding projects? Can a scientific project breed trust? I think it can, if a scientist has to apply for funding they have to write an extensive rapport about what they will do with the money. This is no different with crowdfunding, just in simpler words and more practical. Can a scientific project motive social givers? Yes it can, with crowdfunding you start within your own network. Share the project with people you know and others who are interested in financially supporting these type of projects. Most scientist have an elaborate network and so they should, since we should communicate our findings to our colleagues and the general public. Can a scientific project satisfy the more egocentric giver? Sure it can, as with any project you can develop rewards and allow donors to share their donation (amounts) online and they will feel very needed as we scientist need a lot of funding and help. You could even say that a scientific project is altruistic, since science should be developed to better the world (through lots of small projects).
But it is so small and insignificant. So?
Well yes crowdfunding is but a small part of the whole picture. I do not expect crowdfunding to make up for the whole research budget, For instance, at the platform Experiment the average of a project is $9,695 ($8,056,951 donated by 831 backers). But that is about the amount for a PhD student to pay for the conferences and research costs. So it is not insignificant, it is just small. However, who does not honor the penny, is not worthy of the dollar.