The Influence of Signals on Donation Crowdfunding Campaign Success

The Influence of Signals on Donation Crowdfunding Campaign Success

International Journal of Environmental Research and Public Health Article The Influence of Signals on Donation Crowdfunding Campaign Success during COVID-19 Crisis Han-Chiang Ho , Candy Lim Chiu *, Somkiat Mansumitrchai, Zhengqing Yuan, Nan Zhao and Jiajie Zou College of Business and Public Management (CBPM), Wenzhou-Kean University, Wenzhou 325060, China; [email protected] (H.-C.H.); [email protected] (S.M.); [email protected] (Z.Y.); [email protected] (N.Z.); [email protected] (J.Z.) * Correspondence: [email protected] Abstract: In 2020, the coronavirus pandemic devasted public health agencies and the federal govern- ment across the world. Bridging the gap between underserved populations and the healthcare system, the donation-based crowdfunding campaign has opened a new way for suffering individuals and families to access broader social network platforms for financial and non-financial assistance. Despite the growing popularity of crowdfunding during the pandemic crisis, little research has explored the various signals that attract potential donors to donate. This study explores the effects of signaling theory on the success of a crowdfunding campaign for food relief launched in GoFundMe during which the United States was severely affected by the pandemic with a surged number of coronavirus infected cases from March 1st with 134 confirmed COVID-19 infected cases to July 29th with 4,295,308 infected cases according to World Health Organization. The following results show that the three different signal success measures are important to the success of crowdfunding campaigns: (1) signals originating from the campaign (Title, Description, Spelling Error, Location, and Picture); (2) signals Citation: Ho, H.-C.; Chiu, C.L.; originating from the fundraiser (Social Network, and Update); and (3) signals originating from the Mansumitrchai, S.; Yuan, Z.; Zhao, N.; social interaction of the fundraiser with the crowd (Comment, Follower, and Share). These findings Zou, J. The Influence of Signals on provide insight and bring additional knowledge contribution to the crowdfunding literature. Donation Crowdfunding Campaign Success during COVID-19 Crisis. Int. Keywords: crowdfunding; donation-based campaign; COVID-19; Coronavirus; food relief; signal- J. Environ. Res. Public Health 2021, 18, ing theory 7715. https://doi.org/10.3390/ ijerph18147715 Academic Editor: Paul B. Tchounwou 1. Introduction During a time of disaster or tragedy, victims and survivors who do not have adequate Received: 23 June 2021 resources to support themselves and their families often rely on their networks, as govern- Accepted: 16 July 2021 Published: 20 July 2021 ment and charitable support may be slow or even lacking. The crowdfunding platforms allowed anonymous internet users to provide help and donation to the fundraisers directly. Publisher’s Note: MDPI stays neutral Organizing financial assistance online through crowdfunding platforms (e.g., GoFundMe, with regard to jurisdictional claims in Kiva, YouCaring) has emerged as an alternative and effective method to seek support and published maps and institutional affil- has become a popular form of caregiving. The current largest social fundraising platform, iations. GoFundMe.com, raised over USD 9 billion by individuals since its inception in 2010 (see http://www.gofundme.com/, accessed on 3 March 2020). In the United States, donation- based crowdfunding (DbC) accounts for USD 293.5 million of financing [1]. Berliner and Kenworthy [2] stated the rise of medical or DbC in the United States for two reasons: the first is the fiscal crisis in American health care during the 2008 global financial crisis. In Copyright: © 2021 by the authors. Licensee MDPI, Basel, Switzerland. addition, the second, the growing social assistance systems of online social networks. This article is an open access article Based on Pew Research Center’s study [3], one out of five Americans has donated to a distributed under the terms and crowdfunding fundraising campaign. One of the most well-known and most extensive conditions of the Creative Commons DbC campaigns is the project to support the individuals affected by Hurricane Harvey in Attribution (CC BY) license (https:// the United States [4]. As stated by Conway [5], when National Football League (NFL) star creativecommons.org/licenses/by/ Justin J. Wyatt raised over USD 37 million from over 200,000 donors who donated to aid 4.0/). those affected by Hurricane Harvey in 2017. He accomplished this feat by organizing a Int. J. Environ. Res. Public Health 2021, 18, 7715. https://doi.org/10.3390/ijerph18147715 https://www.mdpi.com/journal/ijerph Int. J. Environ. Res. Public Health 2021, 18, 7715 2 of 25 Houston Flood Relief Fund crowdfunding page at the YouCaring crowdfunding website with a target goal of USD 200,000. Even after the deadline, donations continued to flow, reaching a total of USD 41.6 million [6]. The phenomenal success of crowdfunding emerges in the context relative to the funding of goods, resources, services, or to address social problems primarily related to monetary resources’ contribution through collective efforts in the digital setting [7]. As stated by Johnson and Puplampu [8], the Internet as a form of technology is a part of an ecological techno-subsystem where individuals interact with both non-human (i.e., crowdfunding website) and human (i.e., donors) sources of information which allows continuous reciprocal interaction. Concerning DbC, campaigns (e.g., arising from accidents, crises, disabilities, memorials, and illnesses) are initiated by family, relatives, or friends on the recipient’s behalf to support a humanitarian cause [2]. The reward of DbC for donors is more of an emotional or self-actualization nature such as feeling good, a sense of satisfaction, alleviation from guilt, pro-social, warm glow, or public acknowledgment about helping others in need in times of difficulty [9,10]. It is complicated for potential donors to evaluate the DbC campaigns’ quality over non-charitable campaigns because it is a voluntary act where donors do not expect any monetary or tangible return benefits or pay-off [11]. With the recent impact of the COVID-19 far beyond those infected by the virus, DbC platforms have become a powerful tool or alternative source for various personal and public-related causes to raise funds and donate funds due to their extensive reach. Based on the study of Rajwa et al. [12] of 1579 COVID-19 campaigns on GoFundMe.com from the 3rd of March to the 20th of March 2020, the total fundraising amount was almost USD 1.5 billion, and more fundraisers are actively organizing campaigns with the spread of the virus. They also mentioned that 88% of those campaigns focus on losing a job, unable to cope with living expenses and food relief. For this reason, crowdfunding is a crucial survival strategy for needy individuals to market their basic needs during a natural disaster. However, potential donors can view thousands of COVID-19 campaigns on different DbC platforms, which entails information overload. For potential donors to effectively sort through thousands of DbC campaigns, fundraisers need to avoid information overload, complicating the assessment of potential donors to discern the truly in need fundraisers, so sometimes they rely more on given signals. Earlier studies on crowdfunding focused on signaling theories because crowdfunding projects are characterized by high information asymmetry [13–16]. Given different donation campaigns characterized by unobservable attributes, which observable signals lead to donations in specific campaigns and not others? Some are very successful, while others are not. As Kunz et al. [17] stated, crowdfunding campaigns use a trial-and-error approach to analyze the factors influencing the project’s success and failure. Therefore, there is a need for an in-depth analysis of these factors for the success of donation-based campaigns. In addition, there is little research on the signaling strategies of DbC campaigns during a natural disaster. Most previous studies about DbC campaigns are done before the COVID- 19 pandemic [9,10,18–21]. Therefore, motivated by this knowledge gap, this study explores the DbC campaign signals and attributes that donors evaluate from massive information provided by the fundraisers, which induce them to commit financial donations. To successfully raise funds via a DbC platform, fundraisers will need to find ways to signal their cause to the mass public and capture the attention of potential donors. This knowledge gap is filled in this research by linking signaling theory and DbC during the pandemic crisis. This study provides supporting evidence of the relative importance of different types of antecedents of success in the DbC context. Thus, this study not only focuses on the effects of the drivers per se but also on the effects of specific characteristics, such as the number of words per title, the number of words of the campaign’s description, and the location where relief will be donated. Knowing which drivers influence the design of an effective campaign and donors’ participation is crucial for relief efforts to be successful. Especially in the wake of the global Int. J. Environ. Res. Public Health 2021, 18, 7715 3 of 25 pandemic crisis, understanding self-marketing or self-promotion for survival requires DbC fundraisers to learn the different success factors to attract mass public support. To achieve this purpose, this article is organized as follows: first, it provides a compre- hensive overview of the theoretical framework

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