Enhancing Crowdfunding Success Through Strategic Crowd-Promotion: Roles of Organizers and Businesses

Abstract

The evolving landscape of nonprofit fundraising is increasingly characterized by the intersection of for-profit motives and altruistic objectives, raising critical questions about donor behavior and the sustainability of nonprofit missions. This article explores how profit-driven incentives in crowdfunding models can enhance fundraising effectiveness while maintaining the credibility and trust essential to nonprofit organizations. Through a two-study approach, the dynamics of donor preferences and motivations are investigated, particularly in the context of crowdfunding initiatives where a portion of donations may be allocated to promoters. The first study reveals that while many potential donors exhibit reluctance to compensate promoters, perceptions of significant impact on their own earnings can shift this behavior. The second study examines how individuals’ Social Value Orientation influences their willingness to split a donation, highlighting that inequity averse prosocial motivations play a crucial role in decision-making. We further contextualize these findings within a real-world platform that implemented a donation-splitting feature, revealing that it was significantly more acceptable for a business to distribute profits between an organizer and a crowdfunding project than for an individual donor to divide their contributions between a promoter and a charitable initiative. The article concludes by presenting an educational innovation aimed at equipping students with practical skills in social entrepreneurship, inspiring them to design scalable initiatives that balance financial returns with social goals. An exploratory study of this educational approach finds that organizing events where companies engage in socially impactful activities is more effective for crowdfunding than direct donation requests, fostering mutually beneficial opportunities.