BATH, United Kingdom — There are countless entrepreneurs crowdfunding online, tapping into a global fundraiser to help their latest projects. Although some campaigns have the best of intentions or a noble cause, not every one is a hit with donors. So why does one person’s crowdfund project gather millions and another person’s get nothing? One study says it’s all in the presentation, and promising to save the planet is actually a turn off.
A researcher from the University of Bath believes crowdfunding campaigns that talk too much about their social or environmental benefits do worse than ones which only discuss the project’s goals. The study examines more than 8,000 crowdfunding projects online. Results show that the more a cause pushes its positive social aspects, the worse the fundraising effort goes.
“A ‘too much of a good thing’ effect can be at work in crowdfunding platforms that do not specifically target a pro-social audience,” Dr. Daniela DeFazio says in a university statement. “A moderate emphasis on pro-social framing is beneficial but too much emphasis can backfire.”
Key to crowdfunding success: It’s not what you say, but how you say it
The report in the Journal of Business Ethics looks at 8,631 technology and design projects seeking funds on Kickstarter. They are then split up into groups based on how much “pro-social framing” can be found in their titles and descriptions.
Compared to crowdfunding campaigns that don’t promise any social benefits, researchers say Kickstarters with large amounts of social messaging are 3.4 percent less likely to succeed. Projects with “very large levels” of social promises are nearly six percent less likely to get funding.
It seems a light touch is the best approach when it comes to asking for financial help. DeFazio and her team say projects that only have a small amount of pro-social framing are the most successful. Those Kickstarters are 2.3 percent more likely to succeed compared to campaigns with no promises.
“Evidence suggests that even the most socially conscious individuals continue to be driven by their self-interest,” says DeFazio. The researcher adds that although people love to hear how the cause they’re supporting will affect their community or the planet, they’d rather know how the product works.
There’s a time and place for everything
DeFazio and her co-authors from the Polytechnic University of Milan say there are crowdfunding websites that cater to more socially conscious entrepreneurs. The study says crowdfunding platforms like Kiva will likely provide better results for causes that focus on saving the planet.
The authors note there is one time when adding a social or environmental message seems to help a start-up. The results find campaigns with lots of competition need a way to stand out from the crowd. When many people are raising money for similar start-ups, promoting how yours will benefit society might tip the scales in your favor. DeFazio says more research needs to be done to find out how successful that tactic really is.
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