Crowdfunding for social ventures

Abstract

Purpose Social ventures have been reported to have a hard time obtaining funding. A growing number of social ventures have used crowdfunding as a viable alternative fundraising tool. This paper aims to investigate among social ventures, what makes some more successful than others in crowdfunding. Design/methodology/approach Theoretically, this study builds upon three streams of literature: nonprofit fundraising literature, crowdfunding literature and social entrepreneurship literature. Empirically, it obtains data with a novel Web-crawling approach from the Indiegogo crowdfunding platform and analyzes them with a variety of statistical modeling. Findings This study finds that social ventures that have greater internal resources including team size and venture age, stronger partnerships with other entities and more frequent communications with backers via social media and updates have a higher tendency to successfully raise funds from the crowd than those social ventures that do not. Originality/value This study seeks to understand social ventures’ crowdfunding performance and identify the specific factors that have led some social ventures to be more successful than other social ventures. It builds a novel data set and uses different statistical models to explore the intersection of social entrepreneurship and digital crowdfunding. In addition, this study provides actionable strategies for social ventures to improve their crowdfunding performance while providing practical implications for increasing people’s knowledge of and participation in social entrepreneurship through education and public policy. Overall, this study contributes to both social entrepreneurship and crowdfunding literature while offering practical implications.