Empowering Education with Crowdfunding: The Role of Crowdfunded Resources and Crowd Screening

Abstract

Crowdfunding has emerged as a market-based solution to give frontline complex public service employees the opportunity to acquire resources by advertising project proposals for donor patrons on crowdfunding platforms. However, whether crowdfunded resources can improve offline service outcomes, and if so, how and when, remains murky. Focusing on the context of public education crowdfunding and applying theories from crowdfunding and services marketing literature, the authors conceptualize that the combination of two factors—namely, teachers’ request for resources meant to satisfy unmet heterogeneous (i.e., diverse and evolving) intellectual needs of students and donors’ screening and approval (i.e., crowd screening) of promising projects—helps improve student academic achievement. Collating novel panel data from DonorsChoose and California Department of Education, the authors show that (1) crowdfunded resources positively affect student academic achievement, (2) student academic achievement improves with the increase in the heterogeneity of intellectual needs that crowdfunded resources likely satisfy, (3) crowd screening of project proposals plays a critical role in the offline effectiveness of crowdfunded resources, and (4) crowd screening effectiveness depends on the type of project.